# Sell rating > An analyst recommendation that a stock is expected to underperform or decline, the rarest of the standard ratings on Wall Street. Source: https://www.quantisnow.com/glossary/sell-rating Topic: Glossary / Analyst ratings Also known as: sell recommendation, strong sell, rated sell Last updated: 2026-10-27 A Sell rating is an analyst recommendation indicating that a stock is expected to deliver below-average or negative returns over the rating horizon. It is the bottom tier of the standard Buy/Hold/Sell scale and is equivalent to [Underweight](https://www.quantisnow.com/glossary/underweight) or Underperform at firms that use those labels. ## How it works Every firm defines its Sell rating in its research disclosures, usually as expected total return below a threshold or below a benchmark. FINRA Rule 2241 requires research reports to show the distribution of the firm's ratings, and those tables consistently show Sell as a small minority of ratings across the industry. Sell ratings are scarce for structural reasons: companies can limit access for analysts who publish negative views, investment banking relationships create pressure (despite rules separating research from banking), and many institutional clients already own the stock. ## Why it matters for traders Because they are rare, Sell ratings tend to carry weight: - **New Sell calls**, especially initiations or double downgrades from Buy, can trigger sharp drops. - **The lone bear.** A single Sell among many Buys gets media attention and often frames the bear case for the stock. - **Upgrades off Sell** can mark capitulation and spark relief rallies. A Sell rating from a broker differs from a [short-seller report](https://www.quantisnow.com/glossary/short-seller-report): the analyst does not normally hold a short position and writes under research regulations. ## Example A hypothetical consumer brand, Pinecrest Foods (PCFD), trades at $60. An analyst initiates at Sell with a $45 target, arguing that margins will compress as promotions rise. The call implies 25% downside ($15 / $60). PCFD falls 3% on the day as the note is quoted widely. ## FAQ ### Why are sell ratings so rare? Analysts face business and access pressures, and many prefer to signal caution with a Hold rather than an outright Sell. ### Is Underperform the same as Sell? At most firms, yes. Underperform is the bottom tier on the Outperform/Market Perform/Underperform scale. ## Related terms - [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. - [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. - [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 downgrade](https://www.quantisnow.com/glossary/analyst-downgrade.md): A sell-side analyst's move to a less favorable rating on a stock, such as from Buy to Hold, usually published with a lower price target and rationale. - [Short seller report](https://www.quantisnow.com/glossary/short-seller-report.md): A public research report from an investor who is short a stock, alleging problems such as fraud, accounting issues or overvaluation. - [Sell-side analyst](https://www.quantisnow.com/glossary/sell-side-analyst.md): A research analyst at a brokerage or investment bank who publishes ratings, price targets and earnings estimates on stocks for the firm's clients. ## On Quantisnow - [Live feed: Analyst Ratings](https://www.quantisnow.com/news/analyst-ratings) - [Analyst downgrades](https://www.quantisnow.com/categories/analyst-downgrades) - [Analyst upgrades and downgrades](https://www.quantisnow.com/guides/analyst-upgrades-and-downgrades)