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

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

Overall, there are 12,840 ratings on stocks in the S&P 500. Of these ratings, 59.4% are Buy ratings, 35.7% are Hold ratings, and 4.9% are Sell ratings. The percentage of Buy ratings is above its 5-year (month-end) average of 55.8%, while the percentage of Hold ratings is below its 5-year (month-end) average of 38.7% and the percentage of Sell ratings is also below its 5-year (month-end) average of 5.6%.

At the sector level, analysts are most optimistic on the Information Technology (69%), Communication Services (66%), Materials (64%), Health Care (64%), and Energy (61%) sectors, as these five 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. The Consumer Staples sector also has the highest percentage of Hold ratings (49%) and the highest percentage of Sell ratings (9%).

The ten S&P 500 companies with the highest percentages of Buy ratings and Sell ratings (with a minimum of 3 ratings) can be found below. 

Since March 31, the percentage of Buy ratings on S&P 500 companies has increased to 59.4% from 58.7%. At the sector level, 9 of 11 sectors have recorded an increase in their percentage of Buy ratings over this period, led by the Materials (to 64.3% from 60.3%), Industrials (to 56.8% from 55.1%), Health Care (to 63.9% from 62.3%), and Energy (to 61.4% from 60.0%) sectors. On the other hand, 2 sectors have recorded a decrease in their Buy ratings over this period: Consumer Staples (to 42.6% from 43.5%) and Financials (to 56.2% from 56.9%). It is interesting to note that if 59.4% is the final percentage of Buy ratings for the month, it will mark with second-highest (month-end) percentage of Buy ratings going back to at least 2010, trailing only the previous month (59.5%). 

The FactSet Earnings Insight report is being published one day early this week on June 18. The next edition of the report will be published on June 26. 

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