Technology's reset makes the sector a relative buy, Truist says
A sideways equity market running alongside rising earnings has opened a buying opportunity in technology. Truist makes that case, arguing the sector has gone through a reset that leaves it more attractive relative to the broader…
Key takeaways
- Truist argues that technology has undergone a reset that makes the sector a relatively attractive buy versus the broader market.
- The case is relative and specific: earnings are rising while prices have moved sideways, shifting tech's standing against the rest of the market.
- Truist's view is that the reset has already taken place and the entry point is now.
- The durability of the relative advantage depends on the earnings trend, narrowing if the rising earnings trajectory stalls.
A sideways equity market running alongside rising earnings has opened a buying opportunity in technology. Truist makes that case, arguing the sector has gone through a reset that leaves it more attractive relative to the broader market than recent positioning implies.
The argument is relative, and the case is specific. Earnings are moving higher while prices have gone sideways, a combination that has shifted the sector's standing against the rest of the market in Truist's reading. The reset, on the firm's view, has already taken place.
How long that relative advantage holds depends on the earnings trend. If the rising earnings trajectory that underpins Truist's position stalls, the relative attractiveness the firm describes narrows. The call is that the reset is complete and the entry point is now.
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