Of the 9,863 ratings on MSCI Europe companies at the end of December, 45% were Buy ratings, 38% were Hold ratings, and 17% were Sell ratings.
At the end of 2012, one sector in the MSCI Europe index had both the highest percentage of Buy ratings and the largest upside difference between the bottom-up target price and the closing price for the sector: Energy.
In terms of ratings, the Energy sector had the highest percentage of Buy ratings of all ten sectors at 55% at the end of 2012. The Energy sector was a top sector for analysts in terms of Buy ratings for all of 2012, as the sector had the highest percentage of Buy ratings at the end of each month for the entire year. However, it is interesting to note that the level of optimism of the analysts declined during the course of the year. During the first six months of 2012, the average percentage of Buy ratings (at the end of each month) for the Energy sector was 60%. During the final six months of 2012, the average percentage of Buy ratings (at the end of each month) dipped to 56%. Despite the decrease in the percentage of Buy ratings, analysts continue to be optimistic about this sector relative to the other ten sectors heading into 2013.
In terms of price targets, analysts in aggregate are projecting a 17.3% increase in the price of the Energy sector by the end of the year. This 17.3% increase reflects the largest upside difference between the bottom-up target price (USD) and the closing price (USD) of all ten sectors at the end of 2012. For the MSCI Europe index as a whole, analysts are predicting a 6.5% increase in price in aggregate.
Based on their ratings and target prices, analysts covering companies in the MSCI Europe index continue to be most bullish on the Energy sector heading into 2013.