FactSet Research: Top-rated S&P 500 Sectors and Companies to Watch for Q4 2023
A FactSet research report shows that among all the sectors the company tracks, analysts are most optimistic about the energy sector. In addition, there are several aspects to watch out for in the fourth quarter:
As Q4 approaches, analysts are most optimistic about the Energy sector, with the highest percentage of Buy ratings (64%), followed by the Materials and Financials sectors. Conversely, analysts are most pessimistic about the Consumer Staples sector, with the lowest percentage of Buy ratings (45%) and the highest percentage of Hold ratings (47%) and Sell ratings (8%). The overall percentage of Buy ratings has increased from 54.0% to 54.4%, with an increase in five of the eleven sectors since August 31, led by the Consumer Discretionary sector.
The report shows that $Schlumberger(SLB.US$ and $Halliburton(HAL.US$, two major oil companies, are among the top ten S&P 500 companies favored by analysts, with 94% and 93% Buy ratings, respectively. Oil prices have risen due to production cuts by Saudi Arabia and Russia and rising oil prices have pushed up overall inflation levels. Elevated prices for basic products such as oil, combined with higher interest rates, have constrained consumer purchasing power for non-essential goods from stores, hotels, automakers, restaurants, and other businesses.
As Q3 earnings season approaches its final few weeks, Wall Street analysts unanimously predict weak profit growth for the 500 component companies in the S&P 500. According to FactSet data, they expect EPS to grow 0.2% this quarter. For Q4, they forecast an 8.2% profit growth, but these expectations typically trend downward as more earnings reports come out.
Source: FactSet
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