Stock market traders can take advantage of special situations to leverage sentiment and momentum and make quick profits – if they are fast enough or lucky enough. Over the long term, however, investors have benefited from shares of companies that increase sales, earnings and cash flow. And the consequent increases in analysts’ ratings could help raise stock prices.
Below is a list of stocks under the S&P 500 SPX,
which had the largest increase in ‘buy’ or equivalent ratings among analysts surveyed by FactSet. An upgrade could mean that a stock has fallen enough so that an analyst believes it has become a compelling value. Or it could mean that something has changed for the better in the business or industry. Or it could be a combination of these and other factors.
Focusing on the positive side of the review action makes sense. Analysts working at brokerage firms – those who give recommendations to investor clients – are separated from the companies’ business groups that generate fees by providing different services to the same companies that the analysts cover. But there is still a much greater tendency for these so-called analysts at the seller rate to award ‘buy’ or ‘equivalent’ overweight ‘ratings than’ sell ‘or’ equivalent ‘underweight’ ratings.
Among the S&P 500, 270 companies have a majority ‘buy’ or an equivalent rating among analysts surveyed by FactSet, but only two (American Airlines Group Inc. AAL,
and Lumen Technologies Inc. LUMN,
) has a majority of “sales” or equivalent ratings.
An increase in the number of “buy” upgrades does not necessarily mean that all new “purchases” are due to upgrades. The number of analysts covering one company often changes. An analyst can start a coverage with a ‘buy’ rating. Brokerage firms add or lower coverage of businesses or even entire industries due to staff changes or the reallocation of resources.
The biggest increase in ‘buy’ ratings
Here is a list of 22 businesses among the S&P 500 that now have at least three more ‘buy’ ratings than at the end of 2020:
The table is sorted in two ways – first according to the increase in the number of “buy” ratings, but then according to the current percentage of “buy” ratings. You will need to scroll through the table to see all the data.
So ConocoPhillips COP,
is at the top of the list because it has five more ‘buy’ ratings than on December 31 and because 96% of analysts surveyed by FactSet currently rate the shares a ‘buy’.
The second company on the list, Chevron Corp. CVX,
also increased its number of “buy” ratings by five, but 68% of analysts rate the stock as a “buy”.
Third on the list is Intel Corp. INTC,
also with five additional ‘buy’ ratings, but only 38% of analysts have a positive rating on the stocks.
Highest percentage of ‘buy’ ratings
Here is a list of 21 S&P 500 companies with the highest percentage of “buy” ratings among analysts surveyed by FactSet:
The bottom two, Jacobs Engineering Group Inc. J,
and Cigna Corp. CI,
was set at 88%.
The first two companies, Assurant Inc., AIZ,
and Teledyne Technologies Inc. TDY,
has not achieved any “buy” ratings since the end of 2020, but Teledyne has one total of fewer ratings, and therefore, according to FactSet’s data, it has now been bought 100%.
There are six companies involved in the production or distribution of oil on the first list and four on the second, showing analysts’ growing confidence in the recovery in the oil price.
Amazon.com Inc. AMZN,
is fourth on the second list, with 96% “buy” ratings. The founder of the internet retailer, Jeff Bezos, announced on February 2 that he will retire as CEO during the third quarter, while still being CEO. Here’s a look at the performance of Amazon’s shares since its release in May 1997.