This analysis of Wall Street stock ratings is sounding a warning for Tesla and 62 other stocks
In the financial media, “Wall Street” typically means U.S. brokerage firms and often the analysts who work for them. They are known as “sell-side analysts.” They work independently of the firms’ sales teams, but there’s no question that Wall Street’s job is to sell stocks. So when you see a high level of “sell” ratings on a stock, take heed.
Tesla Inc.
TSLA,
is the poster child for high-flying stocks during this pandemic year. The electric-car company’s shares are up 435% this year and 891% in the past 12 months. And as the shares have shot up, many analysts have continually increased their price targets.
But not all of them have kept doing so. And now, among 37 sell-side analysts polled by FactSet, eight rate the shares the equivalent of a “buy,” while 11 rate them the equivalent of a “sell.” The shares closed at $447.37 on Sept. 2. The consensus price target among those analysts is $284.97, implying 36% downside for the shares.
Tesla is not yet included in the benchmark S&P 500 Index
SPX,
although it is expected to be added soon. It is rare for any S&P 500 stock to have majority “sell” ratings, and none do at this time. But a quick look shows 33 stocks with “sell” ratings outweighing “buy” ratings.
Expanding to the Russell 1000 Index
RUI,
of the largest 1,000 publicly traded companies listed in the U.S. by market capitalization (including Tesla and subject to changes when stocks plunge), there are four companies with majority “sell” ratings.
Among the Russell 1000, there are 63 companies with “sell” ratings outweighing “buy” ratings. Here they are, sorted by market capitalization:
| Company | Ticker | Share ‘buy’ ratings | Share ‘sell’ ratings | Market cap. ($ millions) | Total return – 2020 through Sept. 2 |
| Tesla Inc. |
TSLA, |
22% | 30% | 416,863 | 435% |
| Exxon Mobil Corp. |
XOM, |
12% | 20% | 165,704 | -41% |
| Illinois Tool Works Inc. |
ITW, |
13% | 22% | 63,849 | 14% |
| Public Storage |
PSA, |
13% | 27% | 37,436 | 3% |
| Southern Copper Corp. |
SCCO, |
15% | 54% | 37,092 | 16% |
| Walgreens Boots Alliance Inc. |
WBA, |
5% | 9% | 32,209 | -35% |
| WEC Energy Group Inc. |
WEC, |
15% | 38% | 30,726 | 8% |
| Paychex Inc. |
PAYX, |
10% | 19% | 27,988 | -6% |
| Hormel Foods Corp. |
HRL, |
8% | 23% | 27,698 | 15% |
| ResMed Inc. |
RMD, |
22% | 33% | 26,517 | 19% |
| McCormick & Co. Inc. |
MKC, |
17% | 33% | 26,001 | 25% |
| Brown-Forman Corp. Class B |
BF.B, |
6% | 33% | 24,715 | 19% |
| Consolidated Edison Inc. |
ED, |
6% | 35% | 24,161 | -18% |
| Mettler-Toledo International Inc. |
MTD, |
0% | 25% | 24,095 | 27% |
| Equity Residential |
EQR, |
21% | 26% | 21,473 | -27% |
| Expeditors International of Washington Inc. |
EXPD, |
7% | 36% | 15,218 | 17% |
| Avangrid Inc. |
AGR, |
9% | 36% | 14,968 | -3% |
| Tiffany & Co. |
TIF, |
0% | 7% | 14,854 | -8% |
| J.M. Smucker Co. |
SJM, |
6% | 17% | 13,786 | 19% |
| FactSet Research Systems Inc. |
FDS, |
0% | 44% | 13,452 | 33% |
| Waters Corp. |
WAT, |
0% | 38% | 13,442 | -7% |
| C.H. Robinson Worldwide Inc. |
CHRW, |
18% | 23% | 13,438 | 29% |
| Jack Henry & Associates Inc. |
JKHY, |
10% | 20% | 13,113 | 18% |
| Cognex Corp. |
CGNX, |
22% | 28% | 12,376 | 28% |
| Brown-Forman Corp. Class A |
BF.A, |
6% | 35% | 12,170 | 15% |
| CenturyLink Inc. |
CTL, |
13% | 44% | 11,985 | -11% |
| Ubiquiti Inc. |
UI, |
25% | 75% | 11,942 | 0% |
| Omnicom Group Inc |
OMC, |
25% | 33% | 11,588 | -32% |
| Occidental Petroleum Corp. |
OXY, |
12% | 19% | 11,534 | -68% |
| Lennox International Inc. |
LII, |
12% | 29% | 11,009 | 19% |
| Franklin Resources Inc. |
BEN, |
0% | 43% | 10,784 | -14% |
| Carnival Corp. |
CCL, |
5% | 20% | 10,037 | -67% |
| Western Union Co. |
WU, |
10% | 29% | 9,852 | -9% |
| Allegion PLC |
ALLE, |
0% | 9% | 9,666 | -15% |
| CNA Financial Corp. |
CNA, |
0% | 25% | 8,766 | -22% |
| Watsco Inc. |
WSO, |
11% | 22% | 8,161 | 42% |
| Beyond Meat Inc. |
BYND, |
22% | 30% | 8,099 | 72% |
| Gap Inc. |
GPS, |
13% | 17% | 6,870 | 5% |
| Vornado Realty Trust |
VNO, |
15% | 23% | 6,830 | -44% |
| Credit Acceptance Corp. |
CACC, |
0% | 33% | 6,807 | -13% |
| American Airlines Group Inc. |
AAL, |
20% | 45% | 6,728 | -54% |
| Grubhub Inc. |
GRUB, |
0% | 4% | 6,629 | 48% |
| Commerce Bancshares Inc. |
CBSH, |
0% | 40% | 6,599 | -12% |
| Continental Resources Inc. |
CLR, |
10% | 16% | 5,992 | -52% |
| Comerica Inc. |
CMA, |
19% | 23% | 5,587 | -42% |
| Invesco Ltd. |
IVZ, |
11% | 28% | 4,881 | -38% |
| Cullen/Frost Bankers Inc. |
CFR, |
20% | 47% | 4,403 | -26% |
| Rayonier Inc. |
RYN, |
14% | 29% | 4,109 | -6% |
| Xerox Holdings Corp. |
XRX, |
13% | 25% | 3,992 | -48% |
| Unum Group |
UNM, |
9% | 18% | 3,802 | -33% |
| Hawaiian Electric Industries Inc. |
HE, |
0% | 67% | 3,750 | -25% |
| Antero Midstream Corp. |
AM, |
11% | 22% | 2,979 | -2% |
| Brighthouse Financial Inc. |
BHF, |
9% | 27% | 2,865 | -21% |
| Teradata Corp. |
TDC, |
14% | 21% | 2,611 | -11% |
| Mercury General Corp. |
MCY, |
0% | 50% | 2,526 | -3% |
| Trinity Industries Inc. |
TRN, |
17% | 33% | 2,469 | -3% |
| Nordstrom Inc. |
JWN, |
14% | 18% | 2,448 | -61% |
| Taubman Centers Inc. |
TCO, |
0% | 11% | 2,357 | 25% |
| Park Hotels & Resorts Inc. |
PK, |
7% | 36% | 2,300 | -60% |
| Sabre Corp. |
SABR, |
22% | 33% | 2,253 | -67% |
| First Hawaiian Inc. |
FHB, |
25% | 50% | 2,133 | -41% |
| Associated Banc-Corp |
ASB, |
0% | 10% | 2,096 | -36% |
| Chesapeake Energy Corp. |
CHKAQ, |
0% | 100% | 46 | -97% |
| Source: FactSet | |||||
