Record Share of S&P 500 Stocks Carry Buy Ratings
FactSet says 59.9% of S&P 500 stocks have Buy ratings, while analysts expect strong third-quarter earnings growth.
Key takeaways
- Buy ratings cover a record 59.9% of S&P 500 stocks, FactSet data show.
- Communication Services and Technology each have 70% Buy ratings.
- Analysts expect S&P 500 earnings to grow 29.5% year over year in the third quarter.
Wall Street analysts have assigned Buy ratings to 59.9% of S&P 500 stocks, a record share as companies prepare to report third-quarter results, FactSet data show. The figure edged up from 59.7% at June 30.
Buy ratings are above their five-year average of 55.9%. Hold and Sell ratings are below their respective five-year averages of 38.6% and 5.5%.
Communication Services and Technology lead sector optimism, each with 70% of ratings at Buy, FactSet said. Materials and Energy each have 64%, while Health Care has 61%.
Consumer Staples is the least favored sector, with 45% of ratings at Buy. It also has the highest shares of Hold ratings, at 47%, and Sell ratings, at 7%.
The optimism reflects analysts’ earnings outlook. FactSet says they expect S&P 500 earnings to grow 29.5% year over year in the third quarter. If realized, that would be the third consecutive quarter of growth above 25% and the eighth straight quarter of double-digit growth.
Analysts expect earnings growth of 27.6% in the fourth quarter and 32.4% for 2026. “When everyone is expecting good news, there's less room for positive surprises,” said Charlie Bilello, Creative Planning’s chief market strategist.
This article was produced with the help of AI technology. Source: Yahoo Finance
