Credit Suisse has turned neutral on the IT sector, and reduced recommendation on the healthcare sector to underweight. The relative price-to-earnings in the IT sector is now the highest since 2013 and gains will be growth-dependent from here, said Credit Suisse.
The financial services company has reiterated strong overweight on banks.
“Post a 37% bounce, the relative P/E is now the highest since 2013, and the gains going forward are likely to be growth-dependent, which appears unlikely to break out of the 10-12% range,” said Credit Suisse analysts, led by Neelkanth Mishra.
“Healthcare, for which we only had a marginal overweight, rebounded post a multi-year de-rating, and was a rare sector with no cuts to FY22 EPS. With the cyclical and structural (changing business models) concerns still relevant, we go Underweight the sector,” it said.
In its model portfolio, Credit Suisse is…