Summary

We have reviewed our recommended sector recommendations and have adjusted our current sector over-weight, under-weight, and market-weight recommendations for the calendar third quarter of 2025. Our multi-factor model includes a performance ranking system, which assigns points for monthly, quarterly, and year-to-date sector performance versus the benchmark S&P 500; current sector P/E vs. 5-year P/E, with points awarded for discount to S&P 500 current vs. 5-year P/E delta; two-year earnings growth, with points awarded for exceeding benchmark average and for EPS acceleration; relative performance to the sector group average; sector conviction (meaning BUY rating percentage per sector vs. the total Argus BUY rating percentage); and PEG ratio, with points awarded or subtracted based on sector PEG ratios below or above the group average. Our process has led to an upgrade of the Materials sector to Market-Weight from Under-Weight. We also have lowered Healthcare to Market-Weight from Over-Weight. Our rebalancing process takes place four times a year, early in the months of March, June, September, and December. Our current Over-Weight sectors are Consumer Staples, Financial, Utilities, and Information Technology. Our current