1. Clear view of the company
Before writing the report, have a clear view of the company in terms of—Investment rationale, risk assessment, key growth drivers, cost drivers and revenue drivers .
Clearly write the company’s name at the top of the report and mention your recommendation—buy,sell, hold. You can also use the words—outperform, underperform, neutral or accumulate based on your valuation.
You need to mention target price based on your valuation along with recommendation.
4. Investment rationale
Write clearly your investment rationale. Why do you think the share price will go up/down?
Include a price chart of the stock that will show last 52-weeks’ share price movement.
Mention the analysis of the company’s business model and how will it perform in next 2-3 years.
7. Key ratio analysis
Include important ratio analysis of the company and 52-week high-low share price on a stock exchange. Include market capitalization, Enterprise Value(EV), Earnings Before Interest Tax and Depreciation (EBITDA), EV/EBITDA, and dividend yield (%)
8. Product profile and segments
Analyze the company’s product profile, its various segments and brands. Include current sales and forecasted revenue figures, cost, market size , company’s market share, competition, the company’s performance in domestic and other markets.
9. Economy-Industry-Company (E-I-C) Analysis
Cover company’s fundamental analysis with supportive data.
10. Intrinsic and relative valuation
Perform DCF analysis and relative valuation. Relative valuation should be done with the company’s peers on the basis of Price-Earnings ratio (P/E), Price to Book ratio (P/B), Price to Sales (P/S), Return on Equity (ROE) and Return on Capital Employed (ROCE).
11. Reasoning for recommendation
Write a proper reasoning for your recommendation. For example—Why to buy the stock or why not to buy the stock. So, your reasoning has to be strong.
Write what can unlock/increase/reduce the value of the company.
13. Legal matters
If the company is battling any case, write what could be its effects on the stock price.
14. Common industry points
While writing industry reports, write the points which are common for all players in the industry, for example: regulatory limitation, excise duty, oil prices, etc.
15. Covering all the areas in equity research report
Your report should include precise information about—product, financials, management, market, future plans of the company, growth estimates, and the risk factors of the company.