The analyst whose words move markets.
Equity research analysts study publicly listed companies and publish detailed investment reports ('buy,' 'hold,' or 'sell') that institutional investors (hedge funds, asset managers) use to make trading decisions. You become the world's leading expert on a group of 15-25 companies in a specific sector.
Year 1
£55K-£95K
Base: £45K-£65K
Bonus: £10K-£30K
Year 3
£85K-£135K
Base: £65K-£90K
Bonus: £20K-£45K
Senior
£160K-£300K
Base: £100K-£170K
Bonus: £60K-£130K
London figures, carried across as a starting point. Correct these in the admin editor as needed.
Weekly Hours
55-70 hrs/week
Lifestyle
Writing-heavy · Intellectual · Market-driven
Sell-Side vs Buy-Side Research
Sell-side research is what most people mean by 'equity research', working at a bank and publishing for clients. Buy-side research means working at a fund using research internally to drive investment decisions. Buy-side pays more eventually but is harder to get into directly. The typical career path moves from sell-side to buy-side after 2-3 years.
Sell-Side Research
Work at investment banks (Goldman Sachs, Morgan Stanley, Barclays). Publish reports that are sold to institutional clients. Revenue comes from commission payments and IB relationships. Your report influences where clients direct trading business. Pay is good but has been compressed by MiFID II (EU regulation forcing transparency on research costs).
Buy-Side Research
Work at asset managers or hedge funds. Research is for internal use only, to make better investment decisions. Less writing, more analytical depth. Direct impact on portfolio returns. Better long-term pay trajectory. Typical path: 2-3 years sell-side → move buy-side.
Independent Research
Unaffiliated research boutiques (Bernstein, Redburn, Exane) or your own Substack. Growing post-MiFID II as institutional clients pay directly for research. More editorial freedom.
Route In
Spring week → summer internship (research or banking) → graduate Associate; CFA accelerated
Technical Topics Tested
Sample Interview Questions
Walk me through your investment thesis on [the stock in your pitch].
The stock pitch is the central interview for research roles. You MUST bring a prepared pitch. Structure: 1) One-line thesis. 2) Business and competitive moat. 3) The variant perception (what does consensus miss? 4) Key financials and relative valuation vs peers. 5) Catalysts for re-rating. 6) Bear case and why it's manageable. 7) Price target and upside/downside. Practice defending under attack) 'Why hasn't the market seen this?' is a classic pushback. Have a real answer.
When would you use EV/EBITDA vs P/E?
EV/EBITDA: capital structure-neutral (good for M&A, comparing levered and unlevered companies), ignores capex (supplement with EV/EBIT or EV/FCF). P/E: simpler, widely used by public markets participants, but distorted by leverage and non-cash charges. Use EV/EBITDA for M&A, capital-intensive industries, cross-border comparisons. Use P/E for financial companies, low-capex businesses, and communicating with retail-facing clients. Advanced: for high-growth companies, use EV/Revenue or EV/GP.
How does inventory accounting (FIFO vs LIFO) affect financial statements?
In an inflationary environment: FIFO (oldest costs first) → lower COGS → higher gross profit → higher taxes → lower operating cash flow but higher reported earnings. LIFO (newest costs first, US GAAP only) → higher COGS → lower gross profit → lower taxes → higher operating cash flow but lower reported earnings. Balance sheet: FIFO has higher inventory (more accurately reflects current value). Key interview insight: from a cash perspective, LIFO is better in inflation (lower taxes). Note: LIFO is not allowed under IFRS (UK companies use FIFO).
Equity research has a classic structured recruiting process. Most entry-level roles are 'Research Associate' positions at investment banks, you support a senior analyst covering a sector.
Key Resources
Search these online to find them:
How to Actually Get Better
Research Associate (0-3 yrs)
Model support, company monitoring, report editing.
Junior / Associate Analyst (3-5 yrs)
Begin taking responsibility for coverage, writing more reports.
Senior Analyst, Named (5-10 yrs)
Own your coverage universe. Your name on the reports. Institutional Investor rankings.
Head of Research / MD (10+ yrs)
Manage research team, client relationships, strategy.
Sector Deep Expertise
Pick one sector and become the definitive expert. Read every company's annual report, investor day presentation, and earnings call transcript. Know your companies better than management knows their own competitors.
DCF & Comparable Company Modelling
Build 3-statement models and full DCF valuations from scratch. Know every assumption and sensitivity. Be able to defend your price target against an aggressive hedge fund PM in a 30-minute call.
Investment Writing
Research reports are your product. Learn to write clearly, with conviction, in plain English. The Economist style guide is a useful benchmark. Practice summarising your thesis in one sentence.
Bloomberg Terminal Mastery
BICS sector screening, earnings estimates, bond data, relative value analysis. Get Bloomberg Market Concepts (BMC) cert first, then practice the advanced functions daily.
CFA Qualification
The CFA is nearly mandatory for senior research roles. Start Level 1 on your first year on the job. Three exams, ~4 years. Covers equity valuation, fixed income, derivatives, ethics, directly applicable to research.
AI poses the most significant threat to equity research of any finance role. Basic report-writing, earnings summaries, and model maintenance are already being automated. Headcount on sell-side research desks is shrinking.
Morgan Stanley, Goldman, and JPMorgan are all deploying AI tools to generate first-draft research reports and earnings summaries. MiFID II already compressed research economics, AI accelerates this. The surviving research analysts will be those with proprietary data access, unique relationships with company management, and the ability to make high-conviction calls that AI cannot replicate. Pivot toward buy-side is strongly advisable.
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