Jacob Wackerhausen
Citi Research analysts lowered the communication services sector (NYSEARCA:XLC) to underweight due to a downgrade in telecom, although media and entertainment is still market weight.
Meta Platforms (META), Alphabet (GOOGL), (GOOG), and Netflix (NFLX) hold most of the sector 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,” wrote Analyst Scott Chronert in a U.S. Equity Strategy report.
But for telecommunications, “valuations remain attractive, but likely due to uninspiring growth drivers,” he said. “Trading metrics and lead indicators suggest limited upside in the near to intermediate term.”
He listed nine stocks that are buy-rated, listed by ETR (expected total return):
- Warner Bros Discovery Inc. (WBD)
- TKO Group Holdings Inc. (TKO)
- 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. (LYV)
- AT&T Inc. (T)
These are the two top sell-rated stocks, listed by ETR:
- Lumen Technologies Inc. (LUMN)
- ZoomInfo Technologies Inc. (ZI)
More on Communication Services Select Sector SPDR Fund:
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