In their latest research note, analysts at Bank of America urged clients to favor healthcare and real estate as the most attractive sectors through 2026. According to the note, those industries offer the best blend of valuation and momentum.
Under BofA’s “Momentum and Value” framework, healthcare ranks first and real estate third. The bank is keeping overweight positions in both sectors for investors with a roughly 12‑month horizon. Although technology is second in the model, the team treats it neutrally this month.
The note states that the appeal of healthcare and real estate is partly valuation-driven, as both sectors are trading at low multiples compared to their historical averages. However, it stresses that low prices alone are not a decisive factor. Each sector also benefits from above‑market earnings‑revision trends and a three‑month streak of outperformance, a combination the bank interprets as a healthy price‑quality balance.
By contrast, BofA counsels caution on consumer staples despite the bank’s longer‑term strategic overweight position. Analysts warn the sector looks increasingly like a “value trap”: it is cheap not because fundamentals are improving, but because prices have fallen faster than analysts have revised earnings.
