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Deep Dive: Best stock picks for 2023: Here are Wall Street analysts’ most heavily favored choices

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Following a sharp and sustained rise in interest rates, U.S. stocks have taken a broad beating this year.

But 2023 may bring very different circumstances.

Below are lists of analysts’ favorite stocks among the benchmark S&P 500
SPX,
the S&P 400 Mid Cap Index
MID
and the S&P Small Cap 600 Index
SML
that are expected to rise the most over the next year. Those lists are followed by a summary of opinions of all 30 stocks in the Dow Jones Industrial Average
DJIA.

Stocks rallied on Dec. 13 when the November CPI report showed a much slower inflation pace than economists had expected. Investors were also anticipating the Federal Open Market Committee’s next monetary policy announcement on Dec. 14. The consensus among economists polled by FactSet is for the Federal Reserve to raise the federal funds rate by 0.50% to a target range of 4.50% to 4.75%.

Read: 5 things to watch when the Fed makes its interest-rate decision

A 0.50% increase would be a slowdown from the four previous increases of 0.75%. The rate began 2022 in a range of zero to 0.25%, where it had sat since March 2020.

A pivot for the Fed Reserve and the possibility that the federal funds rate will reach its “terminal” rate (the highest for this cycle) in the near term could set the stage for a broad rally for stocks in 2023.

Wall Street’s large-cap favorites

Among the S&P 500, 92 stocks are rated “buy” or the equivalent by at least 75% of analysts working for brokerage firms. That number itself is interesting — at the end of 2021, 93 of the S&P 500 had this distinction. Meanwhile, the S&P 500 has declined 16% in 2022, with all sectors down except for energy, which has risen 53%, and the utilities sector, which his risen 1% (both excluding dividends).

Here are the 20 stocks in the S&P 500 with at least 75% “buy” or equivalent ratings that analysts expect to rise the most over the next year, based on consensus price targets:

Company

Ticker

Industry

Closing price – Dec. 12

Consensus price target

Implied 12-month upside potential

Share “buy” ratings

Price change – 2022 through Dec. 12

EQT Corp.

EQT

Oil and Gas Production

$36.91

$59.70

62%

78%

69%

Catalent Inc.

CTLT

Pharmaceuticals

$45.50

$72.42

59%

75%

-64%

Amazon.com Inc.

AMZN

Internet Retail

$90.55

$136.02

50%

91%

-46%

Global Payments Inc.

GPN

Misc. Commercial Services

$99.64

$147.43

48%

75%

-26%

Signature Bank

SBNY

Regional Banks

$122.73

$180.44

47%

78%

-62%

Salesforce Inc.

CRM

Software

$133.11

$195.59

47%

80%

-48%

Bio-Rad Laboratories Inc. Class A

BIO

Medical Specialties

$418.28

$591.00

41%

100%

-45%

Zoetis Inc. Class A

ZTS

Pharmaceuticals

$152.86

$212.80

39%

87%

-37%

Delta Air Lines Inc.

DAL

Airlines

$34.77

$48.31

39%

90%

-11%

Diamondback Energy Inc.

FANG

Oil and Gas Production

$134.21

$182.33

36%

84%

24%

Caesars Entertainment Inc

CZR

Casinos/ Gaming

$50.27

$67.79

35%

81%

-46%

Alphabet Inc. Class A

GOOGL

Internet Software/ Services

$93.31

$125.70

35%

92%

-36%

Halliburton Co.

HAL

Oilfield Services/ Equipment

$34.30

$45.95

34%

86%

50%

Alaska Air Group Inc.

ALK

Airlines

$45.75

$61.08

34%

93%

-12%

Targa Resources Corp.

TRGP

Gas Distributors

$70.42

$93.95

33%

95%

35%

Charles River Laboratories International Inc.

CRL

Misc. Commercial Services

$201.94

$269.25

33%

88%

-46%

ServiceNow Inc.

NOW

Information Technology Services

$401.64

$529.83

32%

92%

-38%

Take-Two Interactive Software Inc.

TTWO

Software

$102.61

$135.04

32%

79%

-42%

EOG Resources Inc.

EOG

Oil and Gas Production

$124.06

$158.24

28%

82%

40%

Southwest Airlines Co.

LUV

Airlines

$38.94

$49.56

27%

76%

-9%

Source: FactSet

Most of the companies on the S&P 500 list expected to soar in 2023 have seen large declines in 2022. But the company at the top of the list, EQT Corp.
EQT,
is an exception. The stock has risen 69% in 2022 and is expected to add another 62% over the next 12 months. Analysts expect the company’s earnings per share to double during 2023 (in part from its expected acquisition of THQ), after nearly a four-fold EPS increase in 2022.

Shares of Amazon.com Inc.
AMZN
are expected to soar 50% over the next year, following a decline of 46% so far in 2022. If the shares were to rise 50% from here to the price target of $136.02, they would still be 18% below their closing price of 166.72 at the end of 2021.

Read: Here’s why Amazon is Citi’s top internet stock idea

You can see the earnings estimates and more for any stock in this article by clicking on its ticker.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

Mid-cap stocks expected to rise the most

The lists of favored stocks are limited to those covered by at least five analysts polled by FactSet.

Among components of the S&P 400 Mid Cap Index, there are 84 stocks with at least 75% “buy” ratings. Here at the 20 expected to rise the most over the next year:

Company

Ticker

Industry

Closing price – Dec. 12

Consensus price target

Implied 12-month upside potential

Share “buy” ratings

Price change – 2022 through Dec. 12

Arrowhead Pharmaceuticals Inc.

ARWR

Biotechnology

$31.85

$69.69

119%

83%

-52%

Lantheus Holdings Inc.

LNTH

Medical Specialties

$54.92

$102.00

86%

100%

90%

Progyny Inc.

PGNY

Misc. Commercial Services

$31.21

$55.57

78%

100%

-38%

Coherent Corp.

COHR

Electronic Equipment/ Instruments

$35.41

$60.56

71%

84%

-48%

Exelixis Inc.

EXEL

Biotechnology

$16.08

$26.07

62%

81%

-12%

Darling Ingredients Inc.

DAR

Food: Specialty/ Candy

$61.17

$97.36

59%

93%

-12%

Perrigo Co. PLC

PRGO

Pharmaceuticals

$31.83

$49.25

55%

100%

-18%

Mattel Inc.

MAT

Recreational Products

$17.39

$26.58

53%

87%

-19%

ACI Worldwide Inc.

ACIW

Software

$20.75

$31.40

51%

83%

-40%

Topgolf Callaway Brands Corp.

MODG

Recreational Products

$21.99

$32.91

50%

83%

-20%

Dycom Industries Inc.

DY

Engineering and Construction

$86.03

$128.13

49%

100%

-8%

Travel + Leisure Co.

TNL

Hotels/ Resorts/ Cruiselines

$37.98

$56.00

47%

75%

-31%

Frontier Communications Parent Inc.

FYBR

Telecommunications

$25.21

$36.18

44%

82%

-15%

Manhattan Associates Inc.

MANH

Software

$120.06

$171.80

43%

88%

-23%

MP Materials Corp Class A

MP

Other Metals/ Minerals

$31.39

$44.79

43%

92%

-31%

Lumentum Holdings Inc.

LITE

Electrical Products

$54.45

$76.44

40%

76%

-49%

Tenet Healthcare Corp.

THC

Hospital/ Nursing Management

$44.22

$62.00

40%

80%

-46%

Repligen Corp.

RGEN

Pharmaceuticals

$166.88

$233.10

40%

82%

-37%

STAAR Surgical Co.

STAA

Medical Specialties

$59.57

$82.67

39%

82%

-35%

Carlisle Cos. Inc.

CSL

Building Products

$251.99

$348.33

38%

75%

2%

Source: FactSet

Wall Street’s favorite small-cap names

Among companies in the S&P Small Cap 600 Index, 91 are rated “buy” or the equivalent by at least 75% of analysts. Here are the 20 with the highest 12-month upside potential indicated by consensus price targets:

Company

Ticker

Industry

Closing price – Dec. 12

Consensus price target

Implied 12-month upside potential

Share “buy” ratings

Price change – 2022 through Dec. 12

UniQure NV

QURE

Biotechnology

$22.99

$51.29

123%

95%

11%

Cara Therapeutics Inc.

CARA

Biotechnology

$11.34

$23.63

108%

88%

-7%

Vir Biotechnology Inc.

VIR

Biotechnology

$25.50

$53.00

108%

75%

-39%

Dynavax Technologies Corp.

DVAX

Biotechnology

$11.22

$23.20

107%

100%

-20%

Thryv Holdings Inc.

THRY

Advertising/ Marketing Services

$18.40

$36.75

100%

100%

-55%

Artivion Inc.

AORT

Medical Specialties

$12.93

$23.13

79%

83%

-36%

Cytokinetics Inc.

CYTK

Pharmaceuticals

$38.33

$67.43

76%

100%

-16%

Harsco Corp.

HSC

Environmental Services

$7.17

$12.30

72%

80%

-57%

Ligand Pharmaceuticals Inc.

LGND

Pharmaceuticals

$64.80

$110.83

71%

100%

-35%

Corcept Therapeutics Inc.

CORT

Pharmaceuticals

$20.84

$34.20

64%

80%

5%

Payoneer Global Inc.

PAYO

Misc. Commercial Services

$5.70

$9.33

64%

100%

-22%

Xencor Inc.

XNCR

Biotechnology

$28.69

$46.71

63%

93%

-28%

Pacira Biosciences Inc.

PCRX

Pharmaceuticals

$45.50

$72.90

60%

80%

-24%

BioLife Solutions Inc.

BLFS

Chemicals

$19.72

$31.38

59%

89%

-47%

Customers Bancorp Inc.

CUBI

Regional Banks

$30.00

$47.63

59%

75%

-54%

ModivCare Inc.

MODV

Other Transportation

$92.22

$145.83

58%

100%

-38%

Stride Inc.

LRN

Consumer Services

$32.56

$51.25

57%

100%

-2%

Ranger Oil Corp. Class A

ROCC

Oil and Gas Production

$36.98

$58.00

57%

100%

37%

Outfront Media Inc.

OUT

Real Estate Investment Trusts

$17.59

$27.00

53%

83%

-34%

Walker & Dunlop Inc.

WD

Finance/ Rental/ Leasing

$82.22

$125.20

52%

100%

-46%

Source: FactSet

The Dow

Here are all 30 components of the Dow Jones Industrial Average ranked by how much analysts expect their prices to rise over the next year:

Company

Ticker

Industry

Closing price – Dec. 12

Consensus price target

Implied 12-month upside potential

Share “buy” ratings

Price change – 2022 through Dec. 12

Salesforce Inc.

CRM

Software

$133.11

$195.59

47%

80%

-48%

Walt Disney Co.

DIS

Movies/ Entertainment

$94.66

$119.60

26%

82%

-39%

Apple Inc.

AAPL

Telecommunications Equipment

$144.49

$173.70

20%

74%

-19%

Verizon Communications Inc.

VZ

Telecommunications

$37.95

$44.60

18%

21%

-27%

Visa Inc. Class A

V

Misc.s Commercial Services

$214.59

$249.33

16%

86%

-1%

Microsoft Corp.

MSFT

Software

$252.51

$293.06

16%

91%

-25%

Chevron Corp.

CVX

Integrated Oil

$169.75

$191.20

13%

54%

45%

Cisco Systems Inc.

CSCO

Information Technology Services

$49.30

$53.76

9%

44%

-22%

UnitedHealth Group Inc.

UNH

Managed Health Care

$545.86

$593.30

9%

85%

9%

Goldman Sachs Group Inc.

GS

Investment Banks/ Brokers

$363.18

$392.63

8%

59%

-5%

Walmart Inc.

WMT

Specialty Stores

$148.02

$159.86

8%

72%

2%

JPMorgan Chase & Co.

JPM

Banks

$134.21

$143.84

7%

59%

-15%

Home Depot Inc.

HD

Home Improvement Chains

$327.98

$346.61

6%

61%

-21%

American Express Co.

AXP

Finance/ Rental/ Leasing

$157.31

$164.57

5%

43%

-4%

McDonald’s Corp.

MCD

Restaurants

$276.62

$288.67

4%

72%

3%

Johnson & Johnson

JNJ

Pharmaceuticals

$177.84

$185.35

4%

36%

4%

Coca-Cola Co.

KO

Beverages: Non-Alcoholic

$63.97

$66.62

4%

73%

8%

Boeing Co.

BA

Aerospace and Defense

$186.27

$192.69

3%

77%

-7%

Intel Corp.

INTC

Semiconductors

$28.69

$29.54

3%

13%

-44%

Walgreens Boots Alliance Inc.

WBA

Drugstore Chains

$41.06

$42.24

3%

17%

-21%

Merck & Co. Inc.

MRK

Pharmaceuticals

$108.97

$110.62

2%

65%

42%

Caterpillar Inc.

CAT

Trucks/ Construction/ Farm Machinery

$233.06

$236.23

1%

41%

13%

Honeywell International Inc.

HON

Aerospace and Defense

$214.50

$217.35

1%

54%

3%

Nike Inc. Class B

NKE

Apparel/ Footwear

$112.07

$112.58

0%

64%

-33%

3M Co.

MMM

Industrial Conglomerates

$126.85

$127.30

0%

5%

-29%

Procter & Gamble Co.

PG

Household/ Personal Care

$152.47

$150.22

-1%

59%

-7%

Travelers Companies Inc.

TRV

Multi-Line Insurance

$187.11

$184.24

-2%

18%

20%

Amgen Inc.

AMGN

Biotechnology

$276.78

$264.79

-4%

24%

23%

Dow Inc.

DOW

Chemicals

$51.11

$48.73

-5%

15%

-10%

International Business Machines Corp.

IBM

Information Technology Services

$149.21

$140.29

-6%

33%

12%

Source: FactSet

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