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Where Are Analysts Most Optimistic on Ratings for S&P 500 Companies Heading Into Q4 2021?

Earnings

By John Butters  |  September 24, 2021

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

Overall, there are 10,537 ratings on stocks in the S&P 500. Of these 10,537 ratings, 56.9% are Buy ratings, 36.8% are Hold ratings, and 6.2% are Sell ratings. Over the past five years, the average (month-end) percentage of Buy ratings is 52.0%, the average (month-end) percentage of Hold ratings is 42.0%, and the average (month-end) percentage of Sell ratings is 6.0%.

sp-500-percentage-of-buy-hold-sell-ratings

At the sector level, analysts are most optimistic on the Energy (66%), Communication Services (63%), Information Technology (62%), and Health Care (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 (42%) sector, as this sector has the lowest percentage of Buy ratings. The Consumer Staples sector also has the highest percentage of Hold ratings (48%) and highest percentage of Sell ratings (11%) of all 11 sectors.

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

Company

Buy

Hold

Sell

Alexandria Real Estate Equities, Inc.

100%

0%

0%

Assurant, Inc.

100%

0%

0%

Amazon.com, Inc.

96%

4%

0%

Alphabet Inc. Class C

96%

2%

2%

Activision Blizzard, Inc.

94%

6%

0%

Alphabet Inc. Class A

94%

4%

2%

ConocoPhillips

94%

6%

0%

Alaska Air Group, Inc.

93%

7%

0%

Catalent Inc

93%

7%

0%

Microsoft Corporation

92%

8%

0%

                                                                    Source: FactSet

Highest % of Sell Ratings in S&P 500: Top 10

Company

Buy

Hold

Sell

Consolidated Edison, Inc.

6%

41%

53%

Lumen Technologies, Inc.

14%

36%

50%

Snap-on Incorporated

36%

27%

36%

Robert Half International Inc.

43%

21%

36%

American Airlines Group, Inc.

24%

43%

33%

Clorox Company

16%

53%

32%

Southern Company

53%

16%

32%

Expeditors Intl. of Washington, Inc.

13%

56%

31%

Juniper Networks, Inc.

30%

40%

30%

Progressive Corporation

29%

41%

29%

                                                     Source: FactSet

It is interesting to note that even with a 32% price increase since the end of the third quarter last year (September 30, 2020), analysts are more optimistic on S&P 500 stocks today compared to September 30, 2020 based on the percentage of Buy ratings. On September 30 (2020), 53.4% of ratings on S&P 500 stocks were Buy ratings compared to 56.9% today. Ten sectors have a higher percentage Buy ratings now compared to September 30 (2020), led by the Consumer Discretionary (to 58% from 52%) and Information Technology (to 62% from 57%) sectors. The Consumer Staples (to 42% from 46%) sector is the only sector with a lower percentage of Buy ratings.

sp-500-buy-ratings-percent-sep-2021-vs-sep-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 September 30, 2020 also have the highest percentages of Buy ratings today. The same four sectors (Consumer Staples, Financials, Real Estate, and Utilities) that had the lowest percentages of Buy ratings on September 30, 2020 also have the lowest percentages of Buy ratings today.

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.

The information contained in this article is not 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.

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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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