Oppenheimer analysts raised their rating on the utilities sector and downgraded real estate in a broad-based note on Tuesday, citing positive earnings growth.
The company highlighted that eight of the 11 sectors in the S&P 500 index are showing earnings growth, with six at double-digit rates.
These services include communications services (+41%), utilities (+31%), consumer discretionary (+27%), information technology (+24%), financial services (+11%), and real estate (+11%).
“With 96% (481 companies) of companies reporting first-quarter results, profits beat expectations. Overall profits rose 7.7% on the back of 4.1% revenue growth. Before the start of the season, Bloomberg put the bottom in – Oppenheimer said: “Raised growth estimates First quarter profits to 3.9%.
The company also noted that economic data released last week showed a rise in services activity and manufacturing production in the United States, indicating that the stability in inflation may continue, making it likely that the Federal Reserve will keep monetary policy on pause for a longer period. than some market participants expected. Been hoping for.
Overall, utilities were upgraded to Perform from Underperform, with Oppenheimer also raising the suggested weight for the sector from 2.5% to 2.7%. The real estate sector rating was downgraded from underperform to underperform, with the company leaving its proposed allocation unchanged at 2%.