Data Source: Factset
For 2020, analysts are projecting S&P 500 earnings growth of 10.6% and revenue growth of 5.6%. The question is what sectors will lead, and how far are they trading from their bottom-up price targets?
Factset has the 12 month bottom-up price target for the S&P 500 at 3,311.25 – which is 10% above yesterday’s closing price. In the table above, Factset lays out which sectors it believes will achieve the largest upside price increases (as defined by the difference between current price and 12 month target price).
In the lead is Energy – which is trading at a ~19.5% discount to its target price. Health care is trading at a 14.4% discount and Communication Services comes in third place at a 13.5% discount.
The most expensive sectors (with the lowest expected price appreciation) are Utilities, Real Estate and Consumer Staples.
