10 stocks Wall Street analysts hate heading into 2023

Wall Street analysts don’t expect S&P 500 companies to blow the doors off with their fourth-quarter earnings reports when they start coming out in January.

In fact, quite the contrary, as sluggish economic growthrising interest rates and stubborn inflation have strategists cautious on the stock market in 2023.

Fourth-quarter profits for S&P 500 companies are expected to fall 2.8%, according to new data from FactSet. If true, it would mark the first earnings decline reported by the S&P 500 since the third quarter of 2020, when earnings fell 5.7%.

Expectations have already started to fall for corporate earnings, according to FactSet data. Earnings per share estimates for the fourth quarter have fallen 6.1% since September 30.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 14, 2022. REUTERS/Andrew Kelly

“Slower nominal activity means less revenue growth and downward pressure on margins,” wrote Search 22V founder Dennis DeBusschere in a client note. “At the same time, management sentiment towards forward earnings, measured with natural language processing tool Amenity, has turned deeply negative. The long-awaited earnings decline has arrived.”

Despite a long list of reasons – with the aforementioned earnings weakness leading the way – to be cautious about stocks in the impending earnings season, analysts continue to remain bullish with their ratings.

There are 10,835 ratings on S&P 500 stocks, FactSet points out. Of these 10,835 ratings, 55.3% are buy ratings, 38.8% are hold ratings and 5.9% are sell ratings.

But a few S&P 500 stocks that have sell ratings – suggesting analysts really don’t care about these stories.

Companies such as Principal Financial Group, T. Rowe Price Group and ConEd have more than 50% of analysts covering them who rate the stock as a sell.

So, as investors look to bounce back from a tough year in the markets, these are a few names that Wall Street is least convinced will help turn the tide for your portfolio.

The hated stock list.

The hated stock list.

Brian Sozzi is editor-in-chief and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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