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At the end of the third quarter, where are analysts most optimistic and pessimistic in terms of their ratings on stocks in the S&P 500? Overall, there are 11,028 ratings on stocks in the S&P 500. Of these 11,028 ratings, 49.5% are Buy ratings, 45.4% are Hold, and 5.1% are Sell.

At the sector level, analysts are most optimistic on the Information Technology (58), Energy (57), and Health Care (56) sectors, as these three sectors have highest percentages of Buy ratings

At the sector level, analysts are most optimistic on the Information Technology (58%), Energy (57%), and Health Care (56%) sectors, as these three sectors have highest percentages of Buy ratings. On the other hand, analysts are most pessimistic about the Telecom Services (7%), as this sector has the highest percentage of Sell ratings.

At the company level, these stocks in the S&P 500 secured the highest percentages of Buy ratings and the highest percentages of Sell ratings.

Highest % of Buy Ratings in S&P 500: Top 10 (Source: FactSet)

Company

Buy

Hold

Sell

Total

Align Technology, Inc.

100%

0%

0%

100%

UnitedHealth Group Incorporated

95%

0%

5%

100%

Delta Air Lines, Inc.

95%

5%

0%

100%

Broadcom Limited

94%

6%

0%

100%

Comcast Corporation Class A

94%

6%

0%

100%

Envision Healthcare Corp.

94%

6%

0%

100%

American Tower Corporation

92%

8%

0%

100%

Harris Corporation

91%

9%

0%

100%

Pioneer Natural Resources Co.

90%

10%

0%

100%

Facebook, Inc. Class A

89%

7%

4%

100%

 

Highest % of Sell Ratings in S&P 500: Top 10 (Source: FactSet)

Company

Buy

Hold

Sell

Total

Consolidated Edison, Inc.

0%

50%

50%

100%

News Corporation Class B

0%

50%

50%

100%

Torchmark Corporation

0%

56%

44%

100%

Helmerich & Payne, Inc.

17%

47%

37%

100%

Western Union Company

17%

50%

33%

100%

VeriSign, Inc.

0%

67%

33%

100%

Campbell Soup Company

17%

56%

28%

100%

Apache Corporation

24%

48%

28%

100%

IDEXX Laboratories, Inc.

55%

18%

27%

100%

Franklin Resources, Inc.

7%

67%

27%

100%

 

Sector-Level Growth Expected

At the sector level, the Health Care (55%) and Information Technology (54%) sectors had the highest percentages of Buy ratings back on September 30, 2016. Over the past 12 months (since September 30, 2016), the Health Care sector has recorded the fifth highest price return of all 11 sectors at 12.8%, while the Information Technology sector has recorded the second highest price return of all 11 sectors at 26.1%. The S&P 500 recorded a price return of 15.8% during this same period.

At the company level, S&P 500 companies with the smallest percentage of Buy ratings underperformed the rest of the index in terms of price returns over the past year

At the company level, S&P 500 companies with the smallest percentage of Buy ratings underperformed the rest of the index in terms of price returns over the past year. The S&P 500 can be divided into five quintiles based on the percentage of Buy ratings on September 30, 2016 to analyze price performance. The quintile with the highest percentage of Buy ratings on September 30, 2016 (Quintile 1) saw the second highest average price increase (+16.9%) and the highest median price increase (+20.1%) of the five quintiles during this period. The quintile with the lowest percentage of Buy ratings on September 30, 2016 (Quintile 5) saw the lowest average price increase (+5.3%) and the lowest median price increase (+5.7%) of the five quintiles during this period. Price returns for companies that were acquired after September 30, 2016 (i.e. do not have a current trading price) were excluded from the price analysis.

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Senior Earnings Analyst
John’s weekly research report, Earnings Insight provides analysis and commentary on trends in corporate earnings data for the S&P 500, including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, Financial Times, The New York Times, MarketWatch, and Yahoo! Finance.

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