Every quarter, the UBS US Sector Specialist team conducts a survey amongst Institutional Investors to gauge their views on the broader market outlook and expected investment returns prior to earnings announcements. Watch the videos to learn more.

Rob O’Dwyer, Financials Sector Specialist

Jason Finkelstein, Consumer Sector Specialist

Noah Zurad, Healthcare Sector Specialist

Rob Ruple, Technology Sector Specialist

Catherine Gordon, Energy, Utilities and Renewables Sector Specialist

Kelsey Perselay, Telco, Media and Internet Sector Specialist

Sector takeaways

Consumer

  • Investor conviction wavers across the Consumer sectors’ performance versus the S&P500 over the next 6 months
  • None of the sub-sectors within Consumer Staples showed up as significantly undervalued.
  • Sentiment in the restaurant sub-sector has improved recently from very low levels, but is still not viewed as significantly undervalued

Energy, Utilities and Renewables

  • Investors lack conviction across the Energy and Utilities sectors
  • M&A continues to be a positive catalyst for the Energy sector
  • Renewables sentiment remains bearish amid a number of investor concerns including interest rates, earnings, and election headwinds

Healthcare

  • 80% of respondents expect the sector to outperform in 2024
  • Sentiment shows a renewed interest in the large biopharma sub-sector
  • Utilization and tools backdrop, and the timing of the bioprocessing recovery, are top of mind to start the year

Financials

  • Investors view the sector as either fairly valued or somewhat undervalued
  • Banks sub-sector is still seen as undervalued despite the 25% rally since 3Q23. Investor sentiment expected to improve post 4Q23 earnings season
  • Recovery in capital markets is one of the most consensus themes that investors are playing across the sector this year

Technology

  • Bullish sentiment and positioning are consensus across the Tech sector aligning with industry returns; S&P Tech Index +56% for 2023 and tracking +5% YTD
  • Investor conviction remains high across the Semiconductors and Software sub-sectors, while less so for the IT Hardware and Networking sub-sectors.
  • The biggest risk for Tech is the elevated expectations around Generative AI, which may not fully match near to medium term fundamentals

Telco, Media and Internet

  • More than half of the respondents expect 4Q earnings to come in above expectations
  • Valuation and sentiment remain mixed, leaving the sector in a relative holding pattern to start the year
  • Sentiment and positioning are consensus; investors are focused on quality names with accelerating revenue and earnings growth across sub-sectors

Disclaimer: The views and opinions expressed in this material are those of the author and are not those of UBS, its subsidiaries or affiliate companies. Accordingly, UBS does not accept any liability over the content of this material or any claims, losses or damages arising from the use or reliance of all or any part thereof.​

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Source: 4Q2023 UBS Institutional Investor Sentiment Survey. About the survey: This is a survey of 208 institutional investors with a relationship with UBS surveyed Jan 2 – Jan 11, 2024  with the following breakdown of responses Consumer – 23, Energy & Utilities – 29, Financials – 21, Generalist – 28, Healthcare – 30, Industrials & Materials – 19, TMT- 58.

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