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Where Are Analysts Most Optimistic on Ratings for S&P 500 Companies for 2021?

Earnings

By John Butters  |  December 21, 2020

With the end of the year approaching, where are analysts most optimistic and pessimistic in terms of their ratings on stocks in the S&P 500? How have their views changed since the start of the COVID-19 pandemic?

Overall, there are 10,361 ratings on stocks in the S&P 500. Of these 10,361 ratings, 53.6% are Buy ratings, 39.6% are Hold ratings, and 6.8% are Sell ratings.

At the sector level, analysts are most optimistic on the Energy (62%), Health Care (60%), and Information Technology (59%) sectors, as these three sectors have highest percentages of Buy ratings. On the other hand, analysts are most pessimistic about the Real Estate (46%), Consumer Staples (47%), and Financials (48%) sectors, as these three sectors have the lowest percentages of Buy ratings. The Real Estate (46%) and Financials (46%) sectors also have the highest percentages of Hold ratings, while the Consumer Staples (10%) sector also have the highest percentage of Sell ratings.

S&P 500 Percentage of Buy Hold and Sell Ratings

At the company level, the 10 stocks in the S&P 500 with the highest percentages of Buy ratings and the highest percentages of Sell ratings are listed in the tables below.

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

Company

Buy

Hold

Sell

Phillips 66

100%

0%

0%

Assurant, Inc.

100%

0%

0%

Jacobs Engineering Group Inc.

94%

6%

0%

Amazon.com, Inc.

94%

6%

0%

Keysight Technologies Inc

92%

8%

0%

ConocoPhillips

92%

8%

0%

Teleflex Incorporated

92%

0%

8%

Microsoft Corporation

91%

9%

0%

L3Harris Technologies Inc

91%

9%

0%

Valero Energy Corporation

91%

5%

5%

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

Company

Buy

Hold

Sell

American Airlines Group, Inc.

14%

32%

55%

Lumen Technologies, Inc.

19%

38%

44%

Brown-Forman Corporation Class B

6%

53%

41%

Mettler-Toledo International Inc.

0%

62%

38%

Expeditors International of Washington

7%

57%

36%

Robert Half International Inc.

29%

36%

36%

Consolidated Edison, Inc.

6%

59%

35%

Albemarle Corporation

30%

35%

35%

Equity Residential

14%

52%

33%

WEC Energy Group Inc

20%

47%

33%

Based on the percentage of Buy ratings on S&P 500 stocks, it is interesting to note that analysts are more optimistic on S&P 500 stocks today compared to the start of the 2020 (before the impact of COVID-19). On December 31, 50.6% of ratings on S&P 500 stocks were Buy ratings, compared to 53.6% today. Nine sectors have a higher percentage of Buy ratings today compared to the start of the year, led by the Utilities (to 51% from 42%) and Consumer Staples (to 47% from 39%) sectors. On the other hand, just two sectors have a lower percentage of Buy ratings today compared to the start of the year: Communication Services (to 55% from 60%) and Energy (to 62% from 66%).

S&P 500 Buy Ratings Dec 2020 vs Dec 2019

However, there has been little change at the sector level in terms of ranking by Buy ratings. The same four sectors (Energy, Communication Services, Health Care, and Information Technology) that had the highest percentages of Buy ratings at the start of the year (before COVID-19) also have the highest percentages of Buy ratings today. Three of the four sectors (Consumer Staples, Financials, and Real Estate) that had the lowest percentages of Buy ratings at the start of the year also have the lowest percentages of Buy ratings today.

Author’s Note: The FactSet Earnings Insight report will not be published on December 25 or January 1. The next edition of the report will be published on January 8.

Listen to Earnings Insight on the go! In our weekly Earnings Insight podcast, John Butters provides an update on S&P 500 corporate earnings and related topics based on his popular Earnings Insight publication. The podcast is made available every Monday—listen on Apple podcasts, Spotify, or factset.com.

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John Butters

Vice President, Senior Earnings Analyst, Investor Relations

Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His 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, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).

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