Consensus Ratings Explained

Learn how Benzinga calculates consensus ratings from individual analyst recommendations

Overview

Consensus ratings provide a consolidated view of analyst sentiment on a stock by aggregating individual analyst ratings into a single, easy-to-understand metric. This guide explains how we calculate consensus ratings to help you make informed investment decisions.

How Consensus Ratings Are Calculated

Step 1: Collecting Analyst Ratings

We gather all available analyst ratings for a given stock. Each rating includes:

• Analyst Name and Firm Name
• Rating (e.g., Strong Buy, Buy, Hold, Sell, Strong Sell)
• Price Target - The analyst’s projected stock price
• Date Updated - When the rating was issued

Step 2: Filtering for Unique Analysts

To ensure accuracy and avoid double-counting, we only include the most recent rating from each unique analyst-firm combination.

Example: If Morgan Stanley’s analyst John Doe has rated a stock multiple times, only their latest rating is included in the calculation.

Ratings without a valid price target are excluded from the analysis.

Step 3: Categorizing Ratings

Analyst ratings are categorized into five standard categories:

Category	Numeric Value
Strong Sell	1
Sell	2
Hold	3
Buy	4
Strong Buy	5

Step 4: Aggregating Ratings

We count how many analysts fall into each category.

Example Aggregate:

• Strong Buy: 8 analysts
• Buy: 12 analysts
• Hold: 5 analysts
• Sell: 2 analysts
• Strong Sell: 1 analyst

Total: 28 unique analysts

Step 5: Calculating the Consensus Rating Value

The consensus rating value is calculated as a weighted average:

Consensus Value = (Strong Buy × 5 + Buy × 4 + Hold × 3 + Sell × 2 + Strong Sell × 1) / Total Analysts

Using the example above:

Consensus Value = (8×5 + 12×4 + 5×3 + 2×2 + 1×1) / 28
Consensus Value = (40 + 48 + 15 + 4 + 1) / 28
Consensus Value = 108 / 28
Consensus Value = 3.86

Step 6: Determining the Consensus Rating

The consensus value is rounded to the nearest whole number and mapped to a rating:

Consensus Value	Standard Rating	Simplified Rating
1	Strong Sell	Sell
2	Sell	Sell
3	Hold	Hold
4	Buy	Buy
5	Strong Buy	Buy

In our example: 3.86 rounds to 4, which translates to a “Buy” consensus rating.

---

Display Options

Standard vs. Simplified Ratings

We offer two display formats:

Standard (5-category):

• Strong Sell, Sell, Hold, Buy, Strong Buy

Simplified (3-category):

• Sell (combines Strong Sell + Sell)
• Hold
• Buy (combines Buy + Strong Buy)

Count vs. Percentage Display

Count Display: Shows the actual number of analysts in each category.

Percentage Display: Shows the proportion of analysts in each category, rounded to whole percentages that sum to exactly 100%.

Example:

• Buy: 71% (20 analysts)
• Hold: 18% (5 analysts)
• Sell: 11% (3 analysts)

---

Price Target Calculations

Consensus Price Target

The average of all analyst price targets:

Consensus PT = Sum of all Price Targets / Number of Analysts

Low and High Price Targets

• Low Price Target: The lowest price target among all analysts
• High Price Target: The highest price target among all analysts

These provide a range showing the spectrum of analyst expectations.

---

Understanding the Metrics

Total Analyst Count vs. Unique Analyst Count

• Total Analyst Count: All ratings collected (may include multiple ratings from the same analyst)
• Unique Analyst Count: The number of distinct analyst-firm combinations (used for calculations)

The unique count ensures each analyst’s voice is counted only once, providing a more accurate consensus.

---

Important Considerations

Rating Freshness

Consensus ratings reflect the most recent analyst opinions. The Updated At timestamp indicates when the consensus was last calculated.

Coverage Depth

Consensus ratings are more reliable when based on a larger number of unique analysts. Stocks with limited analyst coverage (fewer than 3-5 analysts) may have less stable consensus ratings.

Rating Distribution

Pay attention to the distribution of ratings, not just the consensus. A stock with 50% Buy and 50% Sell ratings will have a “Hold” consensus, but this masks significant disagreement among analysts.

---

Example Calculation Walkthrough

Let’s walk through a complete example for XYZ Corporation:

Raw Data (10 analysts)

Analyst	Firm	Rating	Price Target
Analyst A	Goldman Sachs	Buy	$150
Analyst B	JP Morgan	Strong Buy	$165
Analyst C	Morgan Stanley	Buy	$155
Analyst D	Bank of America	Hold	$140
Analyst E	Citigroup	Strong Buy	$170
Analyst F	Wells Fargo	Buy	$152
Analyst G	Deutsche Bank	Hold	$145
Analyst H	Barclays	Sell	$130
Analyst I	UBS	Buy	$158
Analyst J	Credit Suisse	Strong Buy	$168

Step-by-Step Calculation

1. Filter for unique analysts: All 10 ratings are unique (10 analysts used)

2. Aggregate counts:

• Strong Buy: 3
• Buy: 4
• Hold: 2
• Sell: 1
• Strong Sell: 0

3. Calculate consensus value:

(3×5 + 4×4 + 2×3 + 1×2 + 0×1) / 10 = (15 + 16 + 6 + 2 + 0) / 10 = 3.9

4. Determine consensus: 3.9 rounds to 4 = “Buy”

5. Price targets:

• Consensus PT: (150+165+155+140+170+152+145+130+158+168) / 10 = $153.30
• Low PT: $130
• High PT: $170

6. Percentage breakdown:

• Buy: 70% (Strong Buy 30% + Buy 40%)
• Hold: 20%
• Sell: 10%

Final Consensus Rating Output

{
  "consensusRating": "BUY",
  "consensusRatingValue": 3.9,
  "consensusPriceTarget": 153.30,
  "priceTargetLow": 130,
  "priceTargetHigh": 170,
  "totalAnalysts": 10,
  "uniqueAnalysts": 10,
  "lastUpdated": "2026-01-16T10:30:00Z"
}

---

Frequently Asked Questions

Why might the total and unique analyst counts differ?

If an analyst from the same firm updates their rating multiple times, the total count includes all instances, but only the most recent is used in calculations (reflected in the unique count).

How often are consensus ratings updated?

Consensus ratings are recalculated whenever new analyst ratings are published or existing ratings are updated.

What happens if there are no analyst ratings?

Without analyst coverage, a consensus rating cannot be calculated. The stock will show no consensus data.

Can the consensus rating change without new analyst ratings?

No. The consensus only changes when analysts issue new ratings or update existing ones.

---

Related Endpoints

Consensus Ratings API

Get consensus rating data for stocks

Analyst Ratings API

Get individual analyst ratings