Relay Therapeutics (RLAY) Upgraded to Buy: What Does It Mean for the Stock?

Core Viewpoint - Relay Therapeutics, Inc. (RLAY) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4][5]. Recent Performance and Outlook - For the fiscal year ending December 2025, Relay Therapeutics is expected to earn -$1.73 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 6.6% over the past three months [8]. - The upgrade to Zacks Rank 2 places Relay Therapeutics in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of generating significant returns, particularly for Zacks Rank 1 stocks [7][9].