Ratings

What a rating means

An AKKUR rating expresses the gap between a security's current market price and AKKUR's estimate of its intrinsic fair value. It is a measure of mispricing, not a forecast of future returns. AKKUR makes no claim that a market price will reach fair value within any particular period, or at all.

The mispricing is measured as the discount or premium of the market price to fair value: (fair value − price) ÷ price. Expected dividends are already reflected in fair value and are not added separately.

Where a report contains a price target with a stated difference to the market price, it is an investment recommendation whether or not a BUY, HOLD, or SELL label is shown.

Speculative overlay

For companies where AKKUR's fair value estimate carries materially elevated uncertainty, a “Speculative” overlay widens the rating thresholds from ±15% to ±25%, so a larger margin of safety is required before the estimated mispricing is treated as meaningful. The flag is shown in the rating, for example “BUY (Speculative)”, and is applied when two or more of the following apply: high cyclicality; high operating leverage; material financial leverage or event risk; or a limited information set, such as pre-initiation coverage or a business in transition.

Top Pick

AKKUR may designate up to two BUY-rated securities as “Top Pick” at any time. The designation marks AKKUR's highest-conviction ideas and is a signal layered onto a BUY rating; it does not change the threshold that defines BUY. It is removed when the rating falls below BUY, when a more compelling opportunity displaces it, or when the original thesis materially changes.

Reviews and status

Ratings are reviewed at least annually and on an ad-hoc basis in response to material events, such as earnings that affect the thesis, profit warnings, acquisitions, or significant changes in market conditions. Where a material event has occurred but the updated analysis is not yet complete, a rating may be placed “Under Review” until a revised assessment is published.

Valuation methodology

Every fair value estimate is built from at least two independent methods. The methods, their relative weights, the key assumptions, and the data sources used are stated in each report.

The methodologies AKKUR may draw on include discounted cash flow analysis (free cash flow to firm, free cash flow to equity, or dividend discount), relative valuation based on peer multiples, sum-of-the-parts analysis for companies with distinct business segments or material non-operating holdings, and asset-based approaches where these provide a meaningful reference point. The choice of methods and their relative weights reflects the company's business model, the quality and availability of comparable data, and AKKUR's judgment as to which approaches best capture the drivers of intrinsic value. Material non-core assets and obligations are identified and valued separately, with the basis disclosed in each report.

Where a method involves discounting future cash flows, the discount rate is constructed from observable market inputs appropriate to the company and the currency in which it reports. For companies whose cash flows are materially inflation-linked, the discount rate may be constructed on a real (inflation-adjusted) basis. Where a terminal value is calculated, AKKUR's standard practice is to triangulate the result using multiple complementary approaches rather than rely on a single calculation. Each report also states the cost of capital and the return implied by the current market price under AKKUR's base-case estimates.

The choice of methods, parameters, and data sources may evolve as business models change, methodological best practices develop, or new information becomes available. Material changes in the methodology applied to a given company between reports are noted in the next published report on that company.