Where Are Analysts Most Optimistic on Ratings for S&P 500 Companies Heading Into 2023?

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?

Overall, there are 10,835 ratings on stocks in the S&P 500. Of these 10,835 ratings, 55.3% are Buy ratings, 38.8% are Hold ratings, and 5.9% are Sell ratings.

At the sector level, analysts are most optimistic on the Energy (63%), Communication Services (61%), and Information Technology (61%) sectors, as these three sectors have the highest percentages of Buy ratings. On the other hand, analysts are most pessimistic on the Consumer Staples (43%) sector, as this sector has the lowest percentage of Buy ratings. This sector also has the highest percentage of Hold ratings (46%) and Sell ratings (11%).

How accurate were the sector-level Buy ratings one-year ago (December 31, 2021) in terms of predicting price performance almost one year later? Overall, the price of the S&P 500 has decreased by 16% since December 31, 2021 (to 3995.32 from 4766.18). The Energy sector had the highest percentage of Buy ratings at the end of last year and has also recorded the largest price increase (+54%) of all eleven sectors since the end of last year. However, the two sectors with the next highest percentages of Buy ratings (Information Technology and Communication Services) at the end of last year have seen the largest price decline and fourth-largest price decline of all eleven sectors during this time. It is interesting to note that the same three sectors that had the highest percentages of Buy ratings at the end of last year also have the highest percentages of Buy ratings at the end of this year. On the other hand, the two sectors with smallest percentages of Buy ratings (Consumer Staples and Utilities) at the end of last year have been the second-best and fourth-best performers in terms of price returns of all eleven sectors during this time.

The S&P 500 companies with the highest percentages of Buy ratings and Sell ratings (with a minimum of 5 ratings) are in the second and third charts below. 

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.