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Where Are Analysts Most Optimistic on Ratings for S&P 500 Companies Heading Into Q4 2022?

Earnings

By John Butters  |  September 16, 2022

Given declining earnings estimates and rising concerns about a recession, 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 10,616 ratings on stocks in the S&P 500. Of these ratings, 55.6% are Buy ratings, 38.7% are Hold ratings, and 5.7% are Sell ratings. The percentage of Buy ratings is above the 5-year (month-end) average of 53.6%, while the percentages of Hold and Sell ratings are below their 5-year (month-end) averages of 40.4% and 6.0%.

The percentage of Buy ratings has declined over the past seven months from a peak of 57.4% at the end of February to 55.6% today. However, the percentage of Buy ratings is still high relative to the past ten years. Prior to the recent surge in Buy ratings, the last time the (month-end) percentage of Buy ratings exceeded 55% was September 2011 (55.8%).

At the sector level, analysts are most optimistic on the Energy (63%), Information Technology (62%), and Real Estate (62%) sectors, as these three sectors have the highest percentages of Buy ratings. On the other hand, analysts are most pessimistic on the Consumer Staples (39%) and Utilities (49%) sectors, as these two sectors have the lowest percentages of Buy ratings. The Consumer Staples sector also has the highest percentage of Hold ratings (50%), while the Utilities sector also has the highest percentage of Sell ratings (12%).

Ten of the eleven sectors have seen a decline in Buy ratings since the February peak, led by the Energy sector (to 63% from 68%). On the other hand, the Real Estate sector (to 62% from 55%) is the only sector that has seen an increase in Buy ratings during this time. Outside of the Real Estate sector, there has been little change at the sector level in terms of ranking by Buy ratings. The same two sectors (Energy and Information Technology) have the highest percentages of Buy ratings today compared to the end of February, while the same two sectors (Consumer Staples and Utilities) have the lowest percentages of Buy ratings today compared to the end of February.

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Highest % of Buy Ratings in S&P 500: Top 10 (Source: FactSet)

Company

Buy

Hold

Sell

Signature Bank

100%

0%

0%

STERIS Plc

100%

0%

0%

Bio-Rad Laboratories, Inc. Class A

100%

0%

0%

Schlumberger NV

96%

4%

0%

IQVIA Holdings Inc

95%

5%

0%

VICI Properties Inc

95%

5%

0%

MetLife, Inc.

94%

0%

6%

Alphabet Inc. Class A

94%

6%

0%

Alphabet Inc. Class C

94%

6%

0%

EPAM Systems, Inc.

94%

6%

0%

 

Highest % of Sell Ratings in S&P 500: Top 10 (Source: FactSet)

Company

Buy

Hold

Sell

Pinnacle West Capital Corporation

6%

31%

63%

Consolidated Edison, Inc.

6%

31%

63%

Clorox Company

15%

35%

50%

Lumen Technologies, Inc.

15%

38%

46%

Robert Half International Inc.

29%

29%

43%

Franklin Resources, Inc.

8%

50%

42%

T. Rowe Price Group

0%

62%

38%

Church & Dwight Co., Inc.

18%

45%

36%

Snap-on Incorporated

27%

36%

36%

J.M. Smucker Company

6%

65%

29%

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This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or 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

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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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.