With the end of the second quarter approaching, where are analysts most optimistic and pessimistic in terms of their ratings on stocks in the S&P 500 heading into the third quarter?
Overall, there are 10,511 ratings on stocks in the S&P 500. Of these 10,511 ratings, 56.7% are Buy ratings, 36.8% are Hold ratings, and 6.5% are Sell ratings. Over the past five years, the average (month-end) percentage of Buy ratings is 51.6%, the average (month-end) percentage of Hold ratings is 42.4%, and the average (month-end) percentage of Sell ratings is 6.0%.
At the sector level, analysts are most optimistic on the Energy (64%), Information Technology (63%), Health Care (62%), and Communication Services (62%) sectors, as these four 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 Consumer Staples sector also has the highest percentage of Hold ratings (45%) and highest percentage of Sell ratings (11%) of all 11 sectors.
Insight/2021/06.2021/06.11.2021_EI/S%26P%20500%20Percentage%20of%20Buy%20Hold%20and%20Sell%20Ratings.png)
The S&P 500 companies with the highest percentages of Buy ratings and Sell ratings can be found in the tables below.
Highest % of Buy Ratings in S&P 500: Top 10 (Source: FactSet)
|
Company
|
Buy
|
Hold
|
Sell
|
|
Alphabet Inc. Class C
|
100%
|
0%
|
0%
|
|
Alexandria Real Estate Equities, Inc.
|
100%
|
0%
|
0%
|
|
Assurant, Inc.
|
100%
|
0%
|
0%
|
|
Amazon.com, Inc.
|
98%
|
2%
|
0%
|
|
Alphabet Inc. Class A
|
98%
|
2%
|
0%
|
|
IQVIA Holdings Inc
|
95%
|
5%
|
0%
|
|
Microsoft Corporation
|
94%
|
6%
|
0%
|
|
ConocoPhillips
|
93%
|
7%
|
0%
|
|
Catalent Inc
|
93%
|
7%
|
0%
|
|
ServiceNow, Inc.
|
91%
|
9%
|
0%
|
Highest % of Sell Ratings in S&P 500: Top 10 (Source: FactSet)
|
Company
|
Buy
|
Hold
|
Sell
|
|
Lumen Technologies, Inc.
|
13%
|
31%
|
56%
|
|
Consolidated Edison, Inc.
|
0%
|
50%
|
50%
|
|
American Airlines Group, Inc.
|
14%
|
41%
|
45%
|
|
Brown-Forman Corporation Class B
|
6%
|
50%
|
44%
|
|
Franklin Resources, Inc.
|
13%
|
47%
|
40%
|
|
Expeditors Intl. of Washington, Inc.
|
13%
|
50%
|
38%
|
|
Carnival Corporation
|
32%
|
32%
|
36%
|
|
Robert Half International Inc.
|
43%
|
21%
|
36%
|
|
McCormick & Company, Incorporated
|
17%
|
50%
|
33%
|
|
Northern Trust Corporation
|
32%
|
37%
|
32%
|
It is interesting to note that even with a 37% price increase since the mid-point of last year (June 30, 2020), analysts are more optimistic on S&P 500 stocks today compared to June 30, 2020 based on the percentage of Buy ratings. On June 30 (2020), 52.6% of ratings on S&P 500 stocks were Buy ratings compared to 56.7% today. Nine sectors have a higher percentage of Buy ratings now compared to June 30 (2020), led by the Consumer Discretionary (to 57% from 50%) and Information Technology (to 63% from 56%) sectors.
Insight/2021/06.2021/06.11.2021_EI/S%26P%20500%20Buy%20Ratings%20June%202021%20vs%20June%202020.png)
However, there has been little change at the sector level in terms of ranking by Buy ratings. The same four sectors (Energy, Health Care, Communication Services, and Information Technology) that had the highest percentages of Buy ratings on June 30, 2020 also have the highest percentages of Buy ratings today. The same three sectors (Consumer Staples, Financials, and Real Estate) that had the lowest percentages of Buy ratings on June 30, 2020 also have the lowest percentages of Buy ratings today.
The next edition of the FactSet Earnings Insight report will be published on June 17.
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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