The Last Time Analysts Were This Cautious, Stocks Fell 17% In 5 Months

Wall Street’s analysts have been getting increasingly cautious as stocks have been surging.  According to data compiled by FactSet, Buy ratings declined to 51 per cent of all ratings from 54 per cent two months ago.  Meanwhile, Sell ratings now account for 5 per cent, up from 4 per cent.

Are the analysts making a mistake?

Maybe not.

From FactSet:

The percentage of Buy ratings at month end hasn’t been this low and the percentage of Hold ratings at month end hasn’t been this high since the end of March 2011, which was one month prior to the start of a 17% decline in the price of the S&P 500 from April 30 through September 30.

Here’s a chart from FactSet showing the mix of analysts’ ratings during the last 12 months:


Photo: Factset

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