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

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

Overall, there are 13,097 ratings on stocks in the S&P 500. Of these ratings, 59.9% are Buy ratings, 35.5% are Hold ratings, and 4.7% are Sell ratings. The percentage of Buy ratings is above its 5-year (month-end) average of 55.9%, while the percentage of Hold ratings is below its 5-year (month-end) average of 38.6% and the percentage of Sell ratings is also below its 5-year (month-end) average of 5.5%.

At the sector level, analysts are most optimistic on the Communication Services (70%), Information Technology (70%), Materials (64%), Energy (64%), and Health Care (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 (45%) sector, as this sector has the lowest percentage of Buy ratings. The Consumer Staples sector also has the highest percentage of Hold ratings (47%) and the highest percentage of Sell ratings (7%).

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 and on page 4 of the Earnings Insight report.

Since June 30, the percentage of Buy ratings on S&P 500 companies has increased slightly to 59.9% from 59.7%. At the sector level, seven sectors have recorded an increase in their percentage of Buy ratings over this period, while four sectors have recorded a decrease in their percentage of Buy ratings over this period.

It is interesting to note that if 59.9% is the final percentage of Buy ratings for the month, it will mark the highest (month-end) percentage of Buy ratings for the S&P 500 going back to at least 2010. 

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