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Where Are Analysts Most Optimistic on Ratings for S&P 500 Companies Heading into Q3 2021?

Earnings

By John Butters  |  June 11, 2021

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.

S&P 500 Percentage of Buy Hold and Sell Ratings

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.

S&P 500 Buy Ratings June 2021 vs June 2020

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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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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