Wall Street analysts are bullish on Rigetti Computing, but should investors follow their lead?

New York: Wall Street analysts often guide investors on whether to buy, sell, or hold stocks. Their recommendations can sway stock prices, but how reliable are they?
Let’s dive into what these analysts think about Rigetti Computing, Inc. (RGTI). Currently, the average brokerage recommendation for RGTI is 1.17, which is pretty close to a Strong Buy. This score comes from six brokerage firms, with five saying Strong Buy and one saying Buy.
While this sounds promising, it’s wise not to base your investment solely on these ratings. Research shows that brokerage recommendations don’t always lead to the best stock picks.
Why is that? Analysts often have a bias because of their firms’ interests. They tend to give more Strong Buy ratings than Strong Sell ones, which can mislead retail investors.
To make better decisions, consider using tools like Zacks Rank, which rates stocks based on earnings estimate revisions. This method has a solid track record for predicting stock performance.
It’s important to note that while both ABR and Zacks Rank use a 1-5 scale, they measure different things. ABR is based on broker recommendations, while Zacks Rank focuses on earnings estimates.
Looking at Rigetti’s earnings estimates, the Zacks Consensus Estimate for this year is -$0.34, which hasn’t changed recently. This stability might mean the stock will perform similarly to the market soon.
With a Zacks Rank of #3 (Hold), it might be smart to be cautious despite the positive ABR for Rigetti Computing.