It’s time to hit those spreadsheets… if you’re an analyst covering financial stocks during the ongoing banking crisis.
Because right now, it seems nearly every Wall Street analyst covering the space is frozen in time and afraid to pull the trigger on what should be an easy decision to be more cautious on a score of names.
To get a sense of this quirky vibe, look no further than the latest data from FactSet.
Of the financial stocks contained in the S&P 500, 92% are rated either Buy or Hold as of March 16 (see table below). The rest are rated sell. Despite declines and mounting stress at Silicon Valley Bank (SIVB), First Republic (FRC) and Signature Bank (SBNY), analysts say the financial sector remains engaged (or “creative,” as it’s known in Wall Street jargon) ) at Credit Suisse (CS).
Parsed another way, 48% of the shares are rated Buy, 44% are rated Hold, and 8% are rated Sell. The percentage of buy-rate financials has declined only four percentage points since February 28, despite the rolling banking crisis.
For perspective, the KBW Bank ETF (^BKX) has declined 25% over the past month, according to Yahoo Finance, compared to a 5% decline for the S&P 500. statistics,
Analysts are almost as bullish on financials as industrials (which aren’t in trouble) — the latter has 49% of its stock in the S&P 500 rated a buy.
Going a step further, financial models are being projected by analysts to report strong 9.4% year-over-year revenue growth in the first quarter — which takes into account the effects of the current crisis — as of the quarter ending March 31. Will catch The revenue growth rate for financials will be the fastest pace of growth among all S&P 500 sectors, notes FactSet.
Ground Level: If analysts don’t step in and change their tune on the financials, clients could be left holding the bag.
Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozy on Twitter @BrianSozzi and on LinkedIn,
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance