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Question 2

What’s initiating coverage?

Answer 2

An initial report for external distribution - meant to be very thorough

Question 3

What are subsequent reports?

Answer 3

Less thorough reports on the company that focus on specific topics or update previously issued reports.

Question 4

What are key items in an initial research report?

Answer 4

• Front matter (e.g., issuer name, buy/hold/sell recommendation, target buy/sell prices, and legal disclosures)
• Rationales for the recommendation
• Company description (e.g., business model, strategy)
• Industry overview and competitive positioning (e.g., industry size, growth rate and main drivers, profitability, competitive analysis)
• Financial analysis and model (e.g., past and pro forma financial statements; analysis and projection of revenue, cost, and cash flow drivers and sources and uses of capital)
• Valuation (e.g., value vs. target price, using either or both of relative and present value methodologies)
• Environmental, social, and governance factors
• Key upside and downside risks and their valuation impact