In an economic landscape clouded by uncertainty, new analyst coverage plays a pivotal role in helping investors make informed decisions. With the Federal Reserve (Fed) holding interest rates steady and reaffirming plans for two potential cuts later in 2025, markets remain on edge. The Fed’s revised 2025 outlook—GDP growth slowing to 1.4% and inflation accelerating to 3%—underscores mounting stagflation concerns, driven in part by the economic fallout of President Trump’s evolving tariff regime.

In such a volatile environment, new analyst coverages provide more than just stock recommendations, they offer a lens into how companies might perform under shifting macro conditions. Initiation of coverage often brings updated models, fresh valuation frameworks, and unique insights into how tariffs, rising input costs, or weakening consumer sentiment could impact earnings. 

Four stocks recently gaining analyst attention are Sezzle Inc. (SEZL Quick QuoteSEZL - Free Report) , Great Lakes Dredge & Dock Corporation (GLDD Quick QuoteGLDD - Free Report) , OppFi Inc. (OPFI Quick QuoteOPFI - Free Report) and HNI Corporation (HNI Quick QuoteHNI - Free Report) , likely drawing increased investor interest.

Why Analyst Coverage Commands Attention

When analysts at leading firms initiate coverage on a stock, they bring with them a network of institutional clients and comprehensive financial analysis. They are often experts in specific industries or sectors, leveraging their specialized knowledge to conduct in-depth research and analysis. Analysts provide investors with crucial insights into a company’s financial performance, growth prospects, competitive position, and industry dynamics—information that can be challenging for individual investors to obtain on their own.

Do analysts add value to companies by initiating coverage? Absolutely. Their role as intermediaries grants them access to a wealth of relevant data, which they refine into actionable insights. Many investors rely heavily on analysts’ research, recognizing that a lack of information could lead to market inefficiencies.

Stocks selected for coverage are not chosen arbitrarily. New coverage generally reflects the analyst’s confidence in the company’s prospects. Sometimes, heightened investor interest in a particular stock prompts analysts to focus on it, aligning their efforts with market demand. Consequently, ratings for newly covered stocks often tend to be more favorable compared to those of stocks that are already under continuous coverage.

Furthermore, a shift in the average broker recommendation holds more significance than an isolated recommendation change. When an analyst issues a recommendation for a company with minimal or no existing coverage, it often captures investors' attention. This, in turn, can attract portfolio managers to take positions in the stock as additional information surfaces.

How Analyst Coverage Impacts Stock Performance

Analyst coverage can significantly impact stock performance by triggering various market reactions. The announcement of new coverage can cause immediate fluctuations in stock prices. Positive ratings can attract bullish investors, while neutral or negative ratings may spark sell-offs. Meanwhile, consistent, positive coverage from multiple analysts can contribute to sustained investor confidence, potentially leading to higher valuations. Conversely, if the coverage reveals previously unrecognized risks, it can hinder long-term performance.

Overall, new analyst coverage can act as a spotlight, illuminating stocks that might otherwise go unnoticed. Whether you’re discovering a hidden gem or gaining a fresh perspective on a well-known company, these reports can be a powerful addition to your investment toolkit.

Are there newly covered stocks on your radar? Now might be the perfect time to dig deeper and uncover your next winning investment.

So, it’s a good strategy to bet on stocks that have seen increased analyst coverage over the last few weeks.

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 four out of six stocks that passed the screen:

Sezzle: This Minneapolis, MN-based company is a technology-enabled payments provider, primarily serving clients across the United States and Canada. Sezzle currently carries a Zacks Rank #1 (Strong Buy). 

Sezzle shares have gained 263.8% in the past three months, outperforming the industry’s 1.5% decline. The 2025 earnings per share (EPS) estimate has increased to $3.26 from $3.24 over the past seven days, depicting analysts’ optimism over the company’s prospects. The estimated figure for 2025 indicates 77.2% year-over-year growth. 

Great Lakes Dredge & Dock: Based in Houston, TX, this company provides dredging services in the United States. The company currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Great Lakes Dredge & Dock shares have gained 29.7% in the past three months, outperforming the industry’s 21.4% growth. The 2025 EPS estimate has increased to 96 cents from 69 cents over the past 60 days. The estimated figure for 2025 indicates 14.3% year-over-year growth. Again, Great Lakes Dredge & Dock carries an impressive VGM Score of A.

OppFi: Headquartered in Chicago, IL, this tech-driven digital finance platform offers a range of financial products and services to banks across the United States. OppFi currently sports a Zacks Rank #1.

OppFi shares have gained 28.8% in the past three months, outperforming the industry’s 1.5% decline. The 2025 EPS estimate has increased to $1.23 from $1.07 over the past 60 days. The estimated figure for 2025 indicates 29.5% year-over-year growth. Again, OppFi carries an impressive VGM Score of A.

HNI: Headquartered in Muscatine, IA, this company manufactures, sells, and markets workplace furnishings and residential building products, primarily across the United States and Canada. HNI currently carries a Zacks Rank #2 (Buy).

HNI shares have gained 8.2% in the past three months, outperforming the industry’s 0.7% decline. The 2025 EPS estimate has increased to $3.50 from $3.26 over the past 60 days. The estimated figure for 2025 indicates 14.4% year-over-year growth. Again, HNI carries an impressive VGM Score of B.

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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