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To: Lizzie Tudor who wrote (82214)	10/28/1999 12:36:00 PM
From: Bob Kim	Respond to of 164684

Can you explain what is meant by a 2-1 rating? The first number "2" is the near-term rating which is supposed to convey some expectation for price appreciation over the next 12 months. 2=Accumulate => expected upside of 10-20% The second number "1" is the long-term rating which is supposed to convey some expectation for price appreciation beyond a 12 month period. 1=Buy => expected upside of 20% or greater. A standard price target at ML is 12 months. Whenever you see 12-18 months, 18 months, 18-24 months or 2 years, then some kind of hedging is going on. A near-term Buy-rated stock can have any 12 month price target with at least 20% implied upside potential. A price target is usually mandated (except apparently for Blodget) for Buy-rated stocks. Some of Blodget's: When YHOO was rated 2-1, it had a 12-18 month price target of $225. Now with a 1-1, it has a 12 month price target of $225. When UBID was rated 2-1, it had a 12-18 month price target of $90 Now with a 1-1, it has a 12-18 month price target of $50 When TFSM was rated 2-1, it had a 12-18 month price target of $75 Now with a 1-1, it has a 12 month price target of $40 The thing to look for is a willingness on the part of the analyst to upgrade a stock if it declines versus lowering the price target. HWP, NCR, and XRX suffered repeated price target reductions in the last few months.