Jacob Wackerhausen
Citi Research analysts downgraded the communications services sector (NYSEARCA:XLC) to underweight due to a downgrade in the telecommunications sector, although media and entertainment still have market weight.
Platforms Meta (META), Alphabet (GOOGL), (GOOG) and Netflix (NFLX) hold the majority of the sector’s weight at 27.5%, 22.5%, 18.9% and 6.7% respectively.
“Fundamentals continue to track well, but trading and valuation indicators have us looking for better entry points for new commitments,” analyst Scott Chronert wrote in a report on U.S. equity strategy.
But for telecoms, “valuations remain attractive, but likely due to uninspiring growth drivers,” he said. “Trading parameters and leading indicators suggest limited upside in the short to medium term.”
He listed nine stocks with buy ratings, priced based on ETR (expected total return):
- Warner Bros. Discovery Inc. (WBD)
- TKO Group Holdings Inc. (CHI)
- Cogent Communications Holdings Inc (CCOI)
- Paramount Global (PARA)
- The Interpublic Group of Companies Inc. (IPG)
- Comcast Corp. (CMCSA)
- Omnicom Group Inc. (OMC)
- Live Nation Entertainment Inc. (LIE)
- AT&T Inc. (T)
These are the two stocks with the best sell ratings, listed by ETR:
- Lumen Technologies Inc. (LUMN)
- ZoomInfo Technologies Inc. (ZI)