To put it short, for a buy-side modeling, you have to know a little about everything. For sell-side, you have to know a lot about a particular industry or dozen firms.

Sell-side:

As a sell-side analysts your main goal is either for rating (Buy, Hold, Sell) or generating a price target. Here is the charateristics for sell-side modeling:

1. Coverage: 15 to 20 stocks
2. Focus: mainly on sub-industry, care less on sector alloction
3. Process: multi-years forecast of financial statements (DCF)
4. Standardised Measure: Does the company beats the benchmark?
5. agnostic about portfolio construction and risk management
6. Profitability: Sell research

Buy-side:

Main goal for buy-side modeling is to help portfolio manager decide buying the stock or not.

1. Coverage: Hundreds of stocks
2. Focus: Broad-market focus and macro policies
3. Process: Valuation mostly based on multiples
4. Customised Measure: Based on investment styles
5. Sector Allocation is critical, and looking at correlation to other assets
6. Profitability: Ability to generate superior return

Wrapping Up with Key Insights

Sell-side model is for analysis plus marketing and sales. It is about story-telling on your model. Performance on rating is not critical as you are not a stock picker. Even when there is not much going on for the company that you cover, you should still develop talking points. You will generate or follow consensus. The model created should be in-depth.

Buy-side model is for analysis plus asset management. It is about truth-telling. You are a stock picker. Performance on recommendation is everything. Lightly covers a lot, and deep dive on a few investable ideas. The goal is to generate return.