Below we take a look at analyst ratings for S&P 500 stocks by sector. There are currently 11,220 individual analyst ratings for the 500 stocks in the S&P 500. That means that the average stock has 22.6 analyst ratings. So which sectors are covered the most and the least by analysts? As shown below, the Technology sector is unsurprisingly covered the most, with an average of 28.2 ratings per stock. The Energy sector ranks second with 25.6 ratings per stock, followed by Consumer Discretionary (23.6), Health Care (22.9) and Financials (22.8). While the Financial sector is the second largest by market cap in the S&P 500 (behind Technology), it has the fifth highest analyst coverage.
The boring Utilities sector has the lowest amount of analyst coverage, with 16.5 ratings per stock. Materials ranks second lowest at 17.4 ratings per stock, followed by Consumer Staples (19.0) and Industrials (19.1).
Buy ratings continue to outnumber sell ratings by a nearly 10 to 1 margin. That's just how it is in the analyst community. Of the 11,220 S&P 500 analyst ratings, 5,940 are buy ratings, while just 653 are sell ratings. The rest are "hold" or "neutral" ratings.
Below are charts showing the percentage of buy and sell ratings by sector. As shown, 52.9% of S&P 500 stock ratings are buy ratings. In the Energy sector, however, 66.3% are buy ratings, which is by far the most bullish of any sector. The Utilities sector has the lowest percentage of buy ratings at 31.8%, while Telecom, Consumer Staples and Financials are have readings in the 40s.
Unsurprisingly, the Financial sector has the highest percentage of sell ratings at 8.3%. Analysts have remained sour on financials since the financial crisis.
The Energy sector has the lowest percentage of sell ratings at just 3.5%. With the highest percentage of buy ratings and the lowest percentage of sell ratings, analysts are certainly bullish on Energy stocks.
Interestingly, analysts are much more bearish on Consumer Staples stocks than Consumer Discretionary stocks. The Consumer Staples sector has the second-most sell ratings and the third least buy ratings, while the Consumer Discretionary sector has higher than average buy ratings and lower than average sell ratings.
Copyright © Bespoke Investment Group
