Recently, Bank of America Analysts released a report stating that their model suggests that in 2026, the preferred sector for US stock investors will no longer be the technology sector, which was hot last year, but rather the healthcare sector.
The bank The report indicates that the healthcare and real estate sectors currently demonstrate investment value and attractiveness in terms of both valuation and momentum metrics.
Bank of America writes that its "momentum and valuation" model now ranks healthcare as the most attractive investment sector, with real estate ranked third—and "we give both sectors an 'overweight' rating for investors with a medium- to long-term (approximately 12-month) investment outlook."
The bank also stated that the "technology" sector, which was very popular last year, was ranked as the second-best investment sector in its model assessment.
Bank of America stated that the investment appeal of the healthcare and real estate sectors is partly due to valuation support, as these two sectors are "undervalued relative to their historical performance."
However, Bank of America also emphasized that low valuations are not the only driving factor for these two sectors.
It states that "compared to the overall market, the correction trend (of these two sectors) is positive, coupled with their strong performance over the past three months," which together indicate that these two sectors offer good investment value.
In contrast, although Bank of America also gave a high weight to the "consumer staples sector" in its strategy research, the bank's attitude toward investing in this sector was more cautious.
Bank of America warned that the sector is "unlikely to rise" in the short term because it is currently "classified as a 'value trap'—cheap only because its relative price is falling faster than analysts are lowering their earnings forecasts."
(Article source: CLS)
