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%.
Insight/2021/09.2021/09.24.2021_EI/sp-500-percentage-of-buy-hold-sell-ratings.png)
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.
Insight/2021/09.2021/09.24.2021_EI/sp-500-buy-ratings-percent-sep-2021-vs-sep-2020.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 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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