Is MakeMyTrip (MMYT) a Buy as Wall Street Analysts Look Optimistic?

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on MakeMyTrip (MMYT), and highlights the potential misalignment of interests between brokerage firms and retail investors [1][4][9]. Group 1: Brokerage Recommendations for MakeMyTrip - MakeMyTrip has an average brokerage recommendation (ABR) of 1.36, indicating a consensus between Strong Buy and Buy, with 71.4% of recommendations being Strong Buy and 14.3% being Buy [2][4]. - The article emphasizes that while the ABR suggests a buying opportunity, it may not be prudent to rely solely on this metric for investment decisions due to the limited success of brokerage recommendations in predicting stock price increases [4][9]. Group 2: Limitations of Brokerage Recommendations - Brokerage analysts often exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of favorable recommendations compared to negative ones [5][9]. - The article suggests that the interests of brokerage firms may not align with those of retail investors, which can result in misleading insights regarding future stock price movements [6][9]. Group 3: Zacks Rank as an Alternative Indicator - The Zacks Rank, which is based on earnings estimate revisions, is presented as a more reliable indicator of near-term stock performance compared to ABR [7][10]. - The Zacks Rank is updated more frequently and reflects changes in earnings estimates, providing timely insights into potential price movements [11]. Group 4: Current Earnings Estimates for MakeMyTrip - The Zacks Consensus Estimate for MakeMyTrip has declined by 1.5% over the past month to $1.59, indicating growing pessimism among analysts regarding the company's earnings prospects [12]. - This decline in earnings estimates has contributed to a Zacks Rank of 4 (Sell) for MakeMyTrip, suggesting caution despite the favorable ABR [13].