Now's the time when hopes run high for S&P 500 stocks next year. That's why it's helpful to note the stocks that analysts are betting against going into the new year.
Analysts have the most sell ratings on 10 S&P 500 stocks, including financial play Franklin Resources plus industrials like Robert Half and Expeditors International, says FactSet. That's an unusually high level of bearishness. Typically, sell ratings from analysts are a rare sight. A tiny 5.3% of the 11,319 ratings on S&P 500 stocks are sells, says FactSet's John Butters.
Bearishness is even more unusual given the market's run. "Heading into the final week of the year, both the S&P 500 and Nasdaq are riding eight-week winning streaks. For the S&P 500, the current streak is just the 22nd of eight or more weeks since the five-day trading week in its current form has been in effect since late 1952," says Bespoke Investment Group.
Seeing Where Analysts Are Bearish
If you own an S&P 500 stock that analysts are pushing you to sell, just know that's not typical. In fact, analysts are less bearish on the S&P 500 than they've been in years. Roughly 55% of all stock ratings are a buy, Butters says.
And the current 5.3% rate of sell ratings on S&P 500 stocks is below the five-year average of 6.1%, Butters says. That shows less bearishness overall. And analysts definitely have a type of stock they're urging investors to sell. The highest percentage of sell ratings land on two S&P 500 sectors: consumer staples and industrials.
And that pessimism is somewhat reflected in the stocks with the most sell ratings.
Finding The Big Sells
Three of the S&P 500 stocks with the highest proportion of sell ratings are industrials. Those include the S&P 500 stocks with the second- and third-highest ratios of sell ratings, Robert Half and Expeditors.
Of the analysts' stock ratings on job recruiter Robert Half, 47% are sells. What's more, analysts think the stock will be nearly 18% lower in 12 months than it is now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That drop would nearly erase Robert Half's 18.8% rise this year.
It's not just speculation either. The company's adjusted profit per share is seen plunging nearly 36% in 2023. Analysts are braced for a slowdown in hiring in 2024.
Meanwhile, logistics company Expeditors International is another stock with lots of doubters despite its 24% rally this year. More than 40% of the ratings on the stock are a sell. It's another case of analysts bracing investors for a big drop in profit. Expeditors International's profit is expected to skid 38% this year and an additional 4% in 2024.
Analysts Down On Stock Pickers
And yet it's mutual fund company Franklin Resources with more sell ratings — 50% of the total — than any other in the S&P 500.
Analysts are bearish on the stock despite it rising 13.9% this year. It's important to note that in a year like 2023, where the S&P 500 jumped more than 20%, Franklin's gain is disappointing too.
What's more, analysts think the company's adjusted profit this fiscal year ended in September 2024 will fall nearly 9% from the same year-ago period. Assets continue to flow out of active mutual funds like the ones Franklin specializes in. No wonder analysts also think the company's stock price will be 16% lower in a year's time than it is now.
And it's not the only mutual fund company analysts are shirking. Mutual fund company T. Rowe Price's shares are off 0.2% this year. And still, 40% of its stock ratings are sells. Analysts think the stock will fall an additional 13% in a year's time. The company is trying to keep up with industry shifts by launching a family of ETFs.
But for now, analysts are bullish on most — but not all — S&P 500 stocks for 2024.
S&P 500 Stocks With The Most Sell Ratings
| Company | Symbol | Sell | Sector |
|---|---|---|---|
| Franklin Resources | 50% | Financials | |
| Robert Half | 47% | Industrials | |
| Expeditors International | 42% | Industrials | |
| T. Rowe Price Group | 40% | Financials | |
| Paramount Global | 39% | Communication Services | |
| Consolidated Edison | 38% | Utilities | |
| Principal Financial | 33% | Financials | |
| Hormel Foods | 33% | Consumer Staples | |
| Clorox | 32% | Consumer Staples | |
| Snap-on | 31% | Industrials |
