Best stock picks for 2023: Here are 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

Don’t miss: 10 Dividend Aristocrat stocks expected by analysts to rise up to 54% in 2023

This article was originally published by Marketwatch.com. Read the original article here.

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