Utilities are today's worst performers in the S&P 500, with the Utilities SPDR ETF (XLU -2.1%) falling as much as 3.4% intraday to the lowest since December 2016.
Williams Capital analyst Chris Ellinghaus says the firm urges utility investors to remain cautious through late winter as the sector faces headwinds including valuations, a rising interest rate cycle and potential inflationary pressures amid what’s likely to be the "final leg in a bear market."
Ellinghaus expects a further 7%-9% drop in utility stock prices before valuations look much more attractive in early spring.
Source: Bloomberg First Word
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