Underweight

As a reference to stock evaluation, the term "underweight" is one of three "shorthand" descriptive words routinely used in a tiered system of rating the performance of a stock relative to the performance of other stocks within the same investment sector. The descriptive is a characterization of a stock's attractiveness to investors. An underweight stock is one, in the estimation of the given analyst that will perform poorly and therefore has a lesser value than other stocks in the sector.

Obviously then, a stock said to be "overweight" has been judged more attractive and is therefore a better performer in relation to similar stocks. Finally, an analyst may employ the phrase "equal weight" to suggest that the stock under consideration is no better or no worse than others in the sector. Therefore, the phrase "equal weight" is an indication that the analyst's opinion of the investment is neutral or average at best.

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