Sector & Industry Analysis
Learn to classify companies into sectors, understand what drives each sector's profits, and apply sector-specific metrics so you can compare companies with the right peers and write a structured sector overview.
Self-study course Self-study course: written lessons, videos and downloadable materials for independent learning. There is no supervision, assessment, individual feedback or tutoring. Self-check quizzes are evaluated automatically in your browser — we do not see your results.
All 12 lessons free
Before you start
- Reading an income statement, balance sheet and cash flow statement
- Basic ratios and valuation multiples such as margins, ROE and P/E
- Comfort with percentages and simple present-value calculations
What you will be able to do
- Classify companies with GICS and calculate a portfolio's sector and active weights
- Measure a company's sensitivity to the business cycle with the degree of operating leverage
- Calculate sector-specific metrics such as net revenue retention, net interest margin, combined ratio and dividend break-even prices
- Value a drug pipeline candidate with a probability-weighted calculation
- Apply Porter's five forces and value-chain analysis to an industry
- Compare companies within a sector and summarise the findings in a structured sector report
Lessons in this course
Why Sectors Matter: GICS Classification and Sector Indices
Understand how companies are sorted into sectors with GICS and ICB, how sector indices are built, and how to measure the sector exposure of a portfolio.
Cyclical versus Defensive Sectors and the Business Cycle
Learn what makes a sector cyclical or defensive and measure how strongly a company's profit reacts to revenue changes using operating leverage.
Technology and Software: Business Models and Key Metrics
Understand the main technology business models and calculate the software metrics analysts use: ARR, net revenue retention, the Rule of 40 and CAC payback.
Banks and Insurers: How Financial Companies Make Money
Read a bank through net interest margin, cost/income ratio, cost of risk and CET1, and an insurer through the combined ratio and investment income.
Energy and Utilities: Regulation, Commodity Exposure and Dividends
Measure an energy producer's sensitivity to oil prices and its dividend break-even, and analyse a regulated utility through its asset base, allowed return and funding needs.
Healthcare and Pharmaceuticals: Pipelines, Patents and Regulation
Understand drug development phases, patent protection and loss of exclusivity, and value a pipeline candidate with a probability-weighted calculation.
Consumer staples and consumer discretionary: brands, margins and demand
Learn how demand, pricing power and input costs drive results in consumer companies, and how to split sales growth into price, volume and mix.
Industrials and materials: orders, capacity and cycles
Read order intake, backlog, book-to-bill and capacity utilisation, and see how operating leverage and cost curves shape profits through the cycle.
Real estate and telecommunications as sectors
Analyse listed property and telecom companies with sector-specific metrics such as implied yield, NAV discount, ARPU, churn and capex intensity.
Industry analysis frameworks: Porter's five forces and value chains
Score an industry's attractiveness with the five forces and find where profits concentrate along its value chain.
Comparing companies within a sector
Build a clean peer group, make figures comparable, and use peer multiples together with growth, margins and debt to judge relative value.
Building a sector overview report
Combine market size, structure, drivers, cycle position, peers and risks into a concise, repeatable sector report with indicators to monitor.
Market History: Bubbles, Crashes & Lessons
To see how sectors and whole markets behaved in past booms and busts, continue with the course "Market History: Bubbles, Crashes & Lessons".
View course outline