When a stock garners new analyst coverage, it signifies a critical juncture for the company and offers valuable insights for investors. This coverage, typically initiated by financial professionals working for investment banks or research firms, provides in-depth evaluations of a company’s performance, market potential and strategic direction. Analysts also issue recommendations—such as buy, hold, or sell—alongside price targets that help shape market perceptions.

Two stocks recently receiving fresh analyst coverage are Tutor Perini Corporation (TPC Quick QuoteTPC - Free Report) and Radius Recycling, Inc. (RDUS Quick QuoteRDUS - Free Report) . Such developments often draw heightened investor attention and carry implications for future performance.

Why New Analyst Coverage Holds Weight

Analysts typically possess specialized knowledge and expertise in particular industries or sectors. Through thorough research and analysis, they offer investors critical insights into a company's financial health, growth potential, competitive standing, and industry trends — insights that are often difficult for individual investors to acquire independently.

Coverage initiation on a stock by analyst(s) usually portrays higher investor inclination. Investors, on their part, often assume that there is something special in a stock to attract analysts to cover it. In other words, they believe that the company coming under the microscope definitely holds some value.

Do analysts create value for companies by initiating coverage? Of course, they do because they play an important intermediary role with their extensive access to relevant data. Many investors have immense faith in analysts’ research as they fear that a lack of information might trigger inefficiencies.

Obviously, stocks are not randomly chosen to cover. A new coverage on a stock usually reflects a reassuring future envisioned by the analyst(s). At times, increased investor focus on a stock motivates analysts to take a closer look at it. After all, who doesn’t like to produce something that is already in demand? Hence, we often find that analysts’ ratings on newly added stocks are more favorable than their ratings on continuously covered stocks.

Needless to say, the average change in broker recommendation is preferable to a single recommendation change. Again, if an analyst issues a new recommendation on a company that has very little or no existing coverage, investors start paying more attention to it. Also, any further information attracts portfolio managers to build a position in the stock.

Stock Price Movements and Market Impact

New analyst coverage often leads to immediate stock price volatility. A positive rating can attract bullish sentiment and drive share prices higher, while neutral or negative ratings may trigger sell-offs. When multiple analysts initiate favorable coverage, the resulting investor confidence can lead to sustained upward momentum in valuation. Conversely, if coverage highlights overlook risks, investor enthusiasm may be dampened and long-term performance can be hindered.

Screening Criteria

The Number of Broker Ratings is greater than the Number of Broker Ratings four weeks ago (this will shortlist stocks that have recent new coverage).

Average Broker Rating less than Average Broker Rating four weeks ago (“less than” means “better than” four weeks ago).

Increased analyst coverage and improving average rating are the primary criteria of this strategy, but one should also consider other relevant parameters to make it foolproof.

Here are the other screening parameters:

Price greater than or equal to $5 (as a stock below $5 will not likely create significant interest for most investors).

Average Daily Volume greater than or equal to 100,000 shares (if the volume isn’t enough, it will not attract individual investors).

Here are two out of the four stocks that passed the screen:

Tutor Perini: Headquartered in Sylmar, CA, this construction company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

TPC shares have gained 21.5% over the past six months compared with the industry’s 24.9% rise. Earnings per share (EPS) estimates for TPC have moved north to $2.00 (from $1.65) for 2025 in the past 60 days, depicting analysts’ optimism over the company’s prospects. Estimated figures indicate 253.9% growth for 2025 from a year ago.

Radius Recycling: This Portland, OR-based company specializes in recycling ferrous and nonferrous metals and producing finished steel products for a global market. The company currently carries a Zacks Rank #3.

RDUS shares have gained 16.4% over the past six months, outperforming the industry’s 2.4% rise. The bottom-line estimated figure for RDUS indicates an improvement of 61.9% for 2025 from a year ago. It has a VGM Score of A.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance