Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter? Let's take a look at what these Wall Street heavyweights have to say about Li Auto Inc. Sponsored ADR (NASDAQ: LI) before we discuss the reliability of brokerage recommendations and how to use them to your advantage. Li Auto currently has an average brokerage recommendation of 1.29, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 12 brokerage firms. An ABR of 1.29 approximates between Strong Buy and Buy. Of the 12 recommendations that derive the current ABR, nine are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 75% and 16.7% of all recommendations. Brokerage Recommendation Trends for LI While the ABR calls for buying Li Auto, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential. Do you wonder why? As a result of ...