Equity Research Report Template (Reg AC, MAR Art. 20)

Equity Research Report: [Company name] ([Ticker])

An initiation-of-coverage style equity research report on one listed company: key data and recommendation, investment summary, business description, industry and competitive positioning, financial analysis, forecasts, valuation and target price, catalysts, risks, ESG considerations, the required disclosures and analyst certification, and appendices. The disclosure section maps to US Regulation AC (17 CFR 242.500 to 242.505), FINRA Rule 2241 (cited by number only), EU Market Abuse Regulation (EU) No 596/2014 Article 20 and Commission Delegated Regulation (EU) 2016/958. The worked example covers "Halvard Tools", a fictional listed toolmaker; every figure is invented. Replace every [bracketed] value and every row marked Example. This is a document format, not financial, investment, tax, legal or accounting advice, and not a recommendation on any real security. Obtain the standard or law for the normative text.

Document control

Approvals

Revision history

Contents

1. Key data and recommendation
2. 1. Investment summary
3. 2. Business description
4. 3. Industry overview and competitive positioning
5. 4. Financial analysis
6. 5. Forecasts and key assumptions
7. 6. Valuation and target price
8. 7. Catalysts
9. 8. Investment risks
10. 9. ESG considerations
11. 10. Disclosures and analyst certification
12. 11. Student competition mode
13. 12. Appendices
14. 13. Glossary and references
15. Standard and licence note

Key data and recommendation

Rating definitions (Example; use your firm's approved definitions): Buy, expected 12-month total return above 10%; Hold, between -5% and 10%; Sell, below -5%. Total return equals price change to target plus expected dividends. The rating horizon is 12 months unless stated.

1. Investment summary

Recommendation (Example): we initiate coverage of Halvard Tools with a Hold rating and a 12-month target price of EUR 44.70, derived from a 50/50 blend of discounted cash flow and peer EV / NTM EBITDA, rolled forward 12 months (section 6). The expected total return of 8.7% is positive but below our 10% Buy threshold.

Thesis (Example):

1. Margin recovery is real but largely priced. Price increases and the closure of two plants should lift the EBITDA margin from the 15.0% trough of FY2026 to 17.5% by 2029E. At 10.9x NTM EBITDA the shares trade only modestly below the peer median of 11.5x, so most of the recovery is already in the price.
2. Sound balance sheet. Net debt of EUR 600m including leases (1.3x EBITDA), with the 5.25% senior notes not due until 2031, leaves room for restructuring cash costs and a progressive dividend.
3. Valuation is balanced. Our DCF (EUR 39.30) sits below the share price and peer multiples (EUR 44.81) above it; the blend supports a target close to the current price.

What would change our view: evidence that margins exceed 17% in 2027E (toward our bull case of EUR 60.40) would argue for an upgrade; a delay to the plant closures, a battery cell price shock or further retail destocking (toward our bear case of EUR 29.60) would argue for a downgrade.

2. Business description

Describe the history only where it explains the current position, for example a recent acquisition or restructuring.

3. Industry overview and competitive positioning

3.1 Market and drivers

3.2 Competitive positioning

Use a recognised framework (for example five forces or a value chain view) by name if it helps, but write the analysis in your own words and tie each conclusion to a forecast or valuation input.

4. Financial analysis

4.1 Return on equity decomposition

Equity is equity attributable to owners of the parent (EUR 1,800.0m; there are no material non-controlling interests). Use year-end or average balances consistently; the example uses year-end balances.

4.2 Key ratios

4.3 Cash conversion

FY2026 free cash flow to the firm (Example): EBIT EUR 345.0m less tax at 25% (EUR 86.3m) plus D&A EUR 105.0m less capital expenditure EUR 120.0m less the increase in net working capital EUR 21.0m equals EUR 222.8m, which is 49.5% of EBITDA. Comment on the trend and on any timing effects such as inventory build ahead of a product launch.

Tie the historical analysis to the forecast in three explicit links. First, explain the margin path: in the example the EBITDA margin fell by one point over two years because dealer destocking cut volumes while the fixed cost of nine plants stayed, which is why the forecast recovery depends on volume and on the two closures rather than on price alone. Second, check that reinvestment matches growth: capital expenditure above depreciation and working capital at a stable share of revenue are consistent with 4% to 5% growth; a forecast that grows faster with the same reinvestment needs a reason. Third, reconcile reported and normalised figures and show the adjustments once, so the reader can see that the 15.0% FY2026 margin excludes EUR 20m of closure and litigation costs that are cash costs all the same.

5. Forecasts and key assumptions

The full model, with income statement, balance sheet and cash flow, is in appendix 12.1.

6. Valuation and target price

6.1 Methods

Cost of equity (Example):

6.2 From fair value to target price

Worked example (Example): 42.06 x 1.085 - 0.95 = EUR 44.68, rounded to EUR 44.70. We confirmed that peer multiples and the risk-free rate did not change materially between the valuation date (2026-12-31) and the reference price date (2027-02-18).

The roll-forward runs from the valuation date, so the target is a value at 2027-12-31, about 10.5 months after first dissemination on 2027-02-19. State that horizon end date with the target. Where the dissemination date is more than one month after the valuation date and your policy measures the 12 months from dissemination, roll forward over the longer period instead: 42.06 x 1.085^(14/12) - 0.95 = EUR 45.31 (Example). Pick one convention in the research policy and apply it to every report, because mixing them makes target prices across the coverage list incomparable.

6.3 Sensitivity and scenarios

Scenario values (Example): bull (594.2 x 13 - 480.1) / 120 = EUR 60.37, rounded to EUR 60.40; bear (370.5 x 11 - 520.0) / 120 = EUR 29.63, rounded to EUR 29.60. Net debt of EUR 480.1m at the end of 2027E comes from appendix 12.1; the bear case adds EUR 40m for lower cash flow and restructuring costs without savings. Probability-weighted value: 0.25 x 60.40 + 0.50 x 44.70 + 0.25 x 29.60 = EUR 44.85. State whether the rating follows the base case or the weighted value; here it follows the base case target (total return 8.7%), and the weighted value ((44.85 + 0.95) / 42.00 - 1 = 9.0%) also falls in the Hold band. Build the bull and bear cases from explicit drivers, as here, and never as the base case with a different multiple only. A colleague's Stock Pitch (finance/stock-pitch) on the same company may reach a different call, for example a base value of EUR 52 at 12x FY2028E EBITDA and an expected dividend of EUR 1.10 against our DPS 2027E of EUR 0.95; record such differences and their causes (multiple, margin path, dividend assumption, horizon) rather than hiding them.

7. Catalysts

A catalyst is useful only if the report says what outcome would confirm or contradict the thesis and how the value would move. For each event, record before publication the result you expect and the result that would make you revisit the rating, so the next update can be judged against a stated test rather than rewritten after the fact.

8. Investment risks

Quantify the effect on value wherever you can, as in the table, and link each risk to the scenario that captures it. Review points for the supervisory analyst: every risk that the bear case relies on appears here; the probability words match the firm's scale; no risk is listed that the forecast already assumes away; and the monitor column names a signal that the team will actually see before the market does. A common error is a long generic list that buries the two risks that drive the rating.

9. ESG considerations

State the sustainability reporting regime that applies to the company and the date of the latest data.

10. Disclosures and analyst certification

10.1 Analyst certification (United States)

Regulation AC (17 CFR 242.501) requires a broker-dealer that provides a research report to a US person in the United States to include a clear and prominent certification by the research analyst. Write it in your firm's approved wording, covering:

FINRA Rule 2241 (Research Analysts and Research Reports) applies to FINRA member firms that publish equity research and requires additional disclosures; FINRA Rule 2242 covers debt research. Both are cited by number only; follow your firm's procedures for the required items.

10.2 EU Market Abuse Regulation

MAR Article 20(1) requires persons who produce or disseminate investment recommendations to take reasonable care that the information is objectively presented and to disclose interests or conflicts. Delegated Regulation (EU) 2016/958 sets the technical arrangements. Checklist:

Research payments in the EU: Directive (EU) 2024/2811 (part of the Listing Act package) amended the MiFID II rules on paying for research (Article 24(9a) of Directive 2014/65/EU), with transposition due in June 2026; check the national transposing law. In the UK, the onshored MAR and the FCA Handbook (COBS 12) apply; they are cited by reference only.

10.3 Interests and conflicts

10.4 Recommendation history and distribution

10.5 General disclaimer

Write your firm's approved disclaimer: the nature of the report, that it is not personal advice, the risk of loss, past performance not being a guide, currency risk where relevant, distribution restrictions by jurisdiction and recipient type, and copyright.

11. Student competition mode

12. Appendices

12.1 Financial model summary

Net debt (Example): 600.0 - 247.9 + 96.0 + 32.0 = 480.1 at the end of 2027E. Capital expenditure includes right-of-use asset additions, so lease liabilities stay at about EUR 150m. The bank loans of EUR 100m are repaid from cash in 2028E, which is why net interest falls. The model computes each line before rounding, so a total may differ from the sum of its rounded parts by 0.1.

12.2 Valuation inputs

12.3 Peer multiples

13. Glossary and references

13.1 Glossary

13.2 References

Standard and licence note

Based on US Regulation AC (17 CFR 242.500 to 242.505, a US public domain text), Regulation (EU) No 596/2014 Article 20, Commission Delegated Regulation (EU) 2016/958 and Directive (EU) 2024/2811 as published on EUR-Lex, reused with acknowledgement. Requirements are summarised in original wording and cited by article; no legal text is reproduced. FINRA rules and the UK FCA Handbook are cited by number only. Student competition and professional ethics references are names only and imply no affiliation with or endorsement by any organisation. Halvard Tools, its peers and all figures are fictional; nothing here is a view on any real security. Check the consolidated texts, your regulator's rules and your firm's procedures before use. This is a document format, not financial, investment, tax, legal or accounting advice. Template licence: MIT.