Where Are Analysts Most Optimistic on Ratings for S&P 500 Companies Heading Into Q2 2023?

With the start of the second quarter approaching, where are analysts most optimistic and pessimistic in terms of their ratings on stocks in the S&P 500?

Overall, there are 10,966 ratings on stocks in the S&P 500. Of these ratings, 53.5% are Buy ratings, 40.3% are Hold ratings, and 6.2% are Sell ratings. The percentage of Buy ratings is below the 5-year (month-end) average of 54.2%, while the percentages of Hold ratings and Sell ratings are above their 5-year (month-end) averages of 39.8% and 6.0%, respectively.

At the sector level, analysts are most optimistic on the Energy (63%) and Communications Services (60%) sectors, as these two sectors have the highest percentages of Buy ratings. On the other hand, analysts are most pessimistic on the Consumer Staples (44%) sector, as this sector has the lowest percentage of Buy ratings. The Materials sector has the highest percentage of Hold ratings (46%), while the Consumer Staples sector has the highest percentage of Sell ratings (12%).

The overall percentage of Buy ratings has declined over the past 13 months from a peak of 57.5% at the end of February 2022 to 53.5% today. At the sector level, 10 of the 11 sectors have seen a decline in their percentage of Buy ratings since the February 2022 peak, led by the Industrials (to 49% from 55%) and Materials (to 47% from 54%) sectors. On the other hand, the Consumer Staples (to 44% from 42%) sector is the only sector that has seen an increase in its percentage of Buy ratings during this time.

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