Markets

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.
US: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
US: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
US: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.

US:TSLA 22%

30%

416,863

435%

Exxon Mobil Corp.

US:XOM 12%

20%

165,704

-41%

Illinois Tool Works Inc.

US:ITW 13%

22%

63,849

14%

Public Storage

US:PSA 13%

27%

37,436

3%

Southern Copper Corp.

US:SCCO 15%

54%

37,092

16%

Walgreens Boots Alliance Inc.

US:WBA 5%

9%

32,209

-35%

WEC Energy Group Inc.

US:WEC 15%

38%

30,726

8%

Paychex Inc.

US:PAYX 10%

19%

27,988

-6%

Hormel Foods Corp.

US:HRL 8%

23%

27,698

15%

ResMed Inc.

US:RMD 22%

33%

26,517

19%

McCormick & Co. Inc.

US:MKC 17%

33%

26,001

25%

Brown-Forman Corp. Class B

US:BF 6%

33%

24,715

19%

Consolidated Edison Inc.

US:ED 6%

35%

24,161

-18%

Mettler-Toledo International Inc.

US:MTD 0%

25%

24,095

27%

Equity Residential

US:EQR 21%

26%

21,473

-27%

Expeditors International of Washington Inc.

US:EXPD 7%

36%

15,218

17%

Avangrid Inc.

US:AGR 9%

36%

14,968

-3%

Tiffany & Co.

US:TIF 0%

7%

14,854

-8%

J.M. Smucker Co.

US:SJM 6%

17%

13,786

19%

FactSet Research Systems Inc.

US:FDS 0%

44%

13,452

33%

Waters Corp.

US:WAT 0%

38%

13,442

-7%

C.H. Robinson Worldwide Inc.

US:CHRW 18%

23%

13,438

29%

Jack Henry & Associates Inc.

US:JKHY 10%

20%

13,113

18%

Cognex Corp.

US:CGNX 22%

28%

12,376

28%

Brown-Forman Corp. Class A

US:BF 6%

35%

12,170

15%

CenturyLink Inc.

US:CTL 13%

44%

11,985

-11%

Ubiquiti Inc.

US:UI 25%

75%

11,942

0%

Omnicom Group Inc

US:OMC 25%

33%

11,588

-32%

Occidental Petroleum Corp.

US:OXY 12%

19%

11,534

-68%

Lennox International Inc.

US:LII 12%

29%

11,009

19%

Franklin Resources Inc.

US:BEN 0%

43%

10,784

-14%

Carnival Corp.

US:CCL 5%

20%

10,037

-67%

Western Union Co.

US:WU 10%

29%

9,852

-9%

Allegion PLC

US:ALLE 0%

9%

9,666

-15%

CNA Financial Corp.

US:CNA 0%

25%

8,766

-22%

Watsco Inc.

US:WSO 11%

22%

8,161

42%

Beyond Meat Inc.

US:BYND 22%

30%

8,099

72%

Gap Inc.

US:GPS 13%

17%

6,870

5%

Vornado Realty Trust

US:VNO 15%

23%

6,830

-44%

Credit Acceptance Corp.

US:CACC 0%

33%

6,807

-13%

American Airlines Group Inc.

US:AAL 20%

45%

6,728

-54%

Grubhub Inc.

US:GRUB 0%

4%

6,629

48%

Commerce Bancshares Inc.

US:CBSH 0%

40%

6,599

-12%

Continental Resources Inc.

US:CLR 10%

16%

5,992

-52%

Comerica Inc.

US:CMA 19%

23%

5,587

-42%

Invesco Ltd.

US:IVZ 11%

28%

4,881

-38%

Cullen/Frost Bankers Inc.

US:CFR 20%

47%

4,403

-26%

Rayonier Inc.

US:RYN 14%

29%

4,109

-6%

Xerox Holdings Corp.

US:XRX 13%

25%

3,992

-48%

Unum Group

US:UNM 9%

18%

3,802

-33%

Hawaiian Electric Industries Inc.

US:HE 0%

67%

3,750

-25%

Antero Midstream Corp.

US:AM 11%

22%

2,979

-2%

Brighthouse Financial Inc.

US:BHF 9%

27%

2,865

-21%

Teradata Corp.

US:TDC 14%

21%

2,611

-11%

Mercury General Corp.

US:MCY 0%

50%

2,526

-3%

Trinity Industries Inc.

US:TRN 17%

33%

2,469

-3%

Nordstrom Inc.

US:JWN 14%

18%

2,448

-61%

Taubman Centers Inc.

US:TCO 0%

11%

2,357

25%

Park Hotels & Resorts Inc.

US:PK 7%

36%

2,300

-60%

Sabre Corp.

US:SABR 22%

33%

2,253

-67%

First Hawaiian Inc.

US:FHB 25%

50%

2,133

-41%

Associated Banc-Corp

US:ASB 0%

10%

2,096

-36%

Chesapeake Energy Corp.

US:CHKAQ 0%

100%

46

-97%

Source: FactSet

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