# Outperform rating

> An analyst rating meaning a stock is expected to deliver better returns than its sector, the market or the analyst's coverage universe; similar to Buy.

Source: https://www.quantisnow.com/glossary/outperform
Topic: Glossary / Analyst ratings
Also known as: outperform, rated outperform, upgraded to outperform
Last updated: 2026-10-27

An Outperform rating is an analyst recommendation that a stock is expected to beat a benchmark, such as its sector, the broad market or the analyst's coverage universe, over the rating horizon. It is the top tier on the Outperform/Market Perform (or Sector Perform)/Underperform scale used by many brokerages.

## How it works

Like [Overweight](https://www.quantisnow.com/glossary/overweight), Outperform is a relative call. Each firm's disclosures define the benchmark and, often, a return threshold. Some firms add tiers on either side, such as "Strong Outperform" or "Market Outperform", so the exact meaning depends on the firm's scale.

The market generally treats Outperform as equivalent to a [Buy rating](https://www.quantisnow.com/glossary/buy-rating). Its opposite is Underperform, which corresponds to Sell or [Underweight](https://www.quantisnow.com/glossary/underweight).

## Why it matters for traders

What matters is the change and the context:

- **Upgrade to Outperform** from Market Perform is a positive call and can move the stock, particularly for smaller companies with thin coverage.
- **Initiation at Outperform** is common and usually less market-moving.
- **[Price target](https://www.quantisnow.com/glossary/price-target).** The implied upside shows how strong the conviction is.
- **Relative framing.** In a sector sell-off, an Outperform stock may still fall, just less than peers.

## Example

An analyst upgrades a hypothetical railroad, Ironline Transport (IRLT), from Market Perform to Outperform and raises the target from $150 to $175. With IRLT at $152, the new target implies about 15% upside ($23 / $152). The note expects volume recovery to help IRLT beat the transport group.

## FAQ

### Is Outperform a Buy?

In practice, yes. It is the top tier of a relative rating scale and is treated as the equivalent of Buy.

### What is Market Perform?

Market Perform is the neutral middle tier on the same scale, comparable to Hold.

## Related terms

- [Overweight rating](https://www.quantisnow.com/glossary/overweight.md): An analyst rating meaning a stock is expected to beat its sector or benchmark, so investors should hold more of it than its index weight; similar to Buy.
- [Buy rating](https://www.quantisnow.com/glossary/buy-rating.md): An analyst recommendation that a stock is expected to outperform or deliver meaningful positive returns over the rating horizon, usually 12 months.
- [Hold rating](https://www.quantisnow.com/glossary/hold-rating.md): A neutral analyst recommendation that a stock is expected to perform roughly in line with the market or its sector, without a clear reason to buy or sell.
- [Underweight rating](https://www.quantisnow.com/glossary/underweight.md): An analyst rating meaning a stock is expected to lag its sector or benchmark, so investors should hold less of it than its index weight; similar to Sell.
- [Analyst upgrade](https://www.quantisnow.com/glossary/analyst-upgrade.md): A sell-side analyst's move to a more favorable rating on a stock, such as from Hold to Buy, usually published with a new price target and thesis.
- [Price target](https://www.quantisnow.com/glossary/price-target.md): An analyst's estimate of where a stock will trade at a future point, usually 12 months out, used with a rating to show expected upside or downside.

## On Quantisnow

- [Live feed: Analyst Ratings](https://www.quantisnow.com/news/analyst-ratings)
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- [Latest analyst upgrades](https://www.quantisnow.com/top/analyst-upgrades)