As optimism runs high for S&P 500 stocks in the upcoming year, it’s crucial to be aware of the stocks that analysts are advising against as we enter the new year.
Analysts are particularly bearish on 10 S&P 500 stocks, an unusual level of pessimism that includes financial player Franklin Resources (BEN) and industrials such as Robert Half (RHI) and Expeditors International (EXPD), according to FactSet. This heightened bearish sentiment contrasts with the typical rarity of sell ratings; currently, only 5.3% of the 11,319 ratings on S&P 500 stocks are sells, as reported by FactSet’s John Butters.
This increase in bearishness is noteworthy, especially given the market’s impressive eight-week winning streak for both the S&P 500 and Nasdaq leading into the final week of the year. The 5.3% rate of sell ratings on S&P 500 stocks is below the five-year average of 6.1%, indicating less overall bearish sentiment. Notably, analysts exhibit a preference for selling stocks in two S&P 500 sectors: consumer staples and industrials.
Despite the overall bullish outlook, some specific stocks are drawing significant pessimism from analysts.
S&P 500 Stocks with High Sell Ratings:
- Robert Half (RHI): Analysts have given a sell rating to 47% of the stock, projecting an anticipated drop of nearly 18% in the next 12 months. The company’s adjusted profit per share is expected to plunge nearly 36% in 2023, reflecting concerns about a hiring slowdown in 2024.
- Expeditors International (EXPD): Over 40% of ratings on this logistics company are sell ratings, despite its 24% rally this year. Analysts are cautioning investors about a substantial drop in profit, with expectations of a 38% decline this year and an additional 4% in 2024.
- Franklin Resources (BEN): As a mutual fund company, Franklin Resources holds the highest percentage of sell ratings at 50%. Despite a 13.9% rise this year, analysts predict a nearly 9% fall in adjusted profit for the fiscal year ending in September 2024. Asset outflows from active mutual funds contribute to the pessimistic outlook, with analysts anticipating a 16% lower stock price in a year.
Analysts are also showing skepticism toward other mutual fund companies, such as T. Rowe Price, which has 40% of its stock ratings as sells. Despite being down 0.2% this year, analysts expect a further 13% decline in its stock price in a year’s time.
While analysts are generally bullish on most S&P 500 stocks for 2024, these identified stocks may warrant careful consideration for investors looking to make year-end portfolio adjustments.
