Most stocks on the list have underperformed the S&P 500 Index this year.
(This is the first in a three-part series listing highly rated stocks that sell-side analysts expect to rise the most over the next 12 months. Part 2 covers small-cap stocks and Part 3 covers mid-caps.)
The stock market always looks ahead. Why else would the S&P 500 Index have returned 15% for 2020 as of Dec. 11 even as COVID-19 cases are setting daily records?
Below is a list of the 20 stocks in the S&P 500
that are rated “buy” by at least three of four analysts that are expected to rise the most over the next year. Following that list is a summary of analysts’ opinions about the 30 components of the Dow Jones Industrial Average
Investors have been pouring money into stocks, in part, because they don’t wish to be left behind when (and if) vaccines lead to a decline in coronavirus infections and a return to a normal economic growth path.
Incredibly low interest rates have also helped push investors to U.S. stocks. The S&P 500 has a weighted aggregate dividend yield of 1.57%, which compares favorably to a yield of only 0.91% for 10-year U.S. Treasury notes
S&P 500 favorites for 2021
Among the S&P 500, 253 stocks have majority “buy” or equivalent ratings among analysts polled by FactSet, and 96 are recommended by at least 75% of analysts.
In case you are wondering, two of this year’s highest-flying stocks aren’t included in the S&P 500. They have also run way ahead of analysts’ price targets:
will be added to the benchmark index Dec. 21. The stock was up 629% for 2020 through Dec. 11. Among analysts polled by FactSet, only a third rate the shares a “buy” or the equivalent. The stock closed at $609.99 on Dec. 11 and the consensus price target is $411.10. So the consensus is for the shares to give up a third of their value over the next 12 months.
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Shares of Zoom Video Communications Inc.
were up 484% year-to-date through Dec. 11. Among sell-side analysts, 40% rate the shares buy. But the consensus price target is $490.35, which is 24% above the closing price of $397.01 on Dec. 11.
Here are the 20 S&P 500 stocks with at least 75% “buy” ratings with the most upside potential over the next 12 months implied by analysts’ consensus price targets:
Scroll the table to see all of the data.
It might surprise you to see General Motors Co.
on the list, but the company is making a tremendous push to release 30 all-electric vehicles by 2025. GM was included on this list of 20 electric-vehicle stocks besides Tesla and Nio that analysts expect to rise the most over the next year.
You might also be surprised to see these tech high-fliers expected to continue their outperformance next year:
is up 37% this year, and analysts expect the stock to rise 24% over the next 12 months, based on the consensus price target. Analysts estimate the company will increase its sales by 20% in calendar 2021. (All estimates in this article use calendar years; many companies have fiscal years that don’t match the calendar.)
Shares of Amazon.com
are up 69% this year — the best performance for any stock on the list. Analysts expect the company’s revenue to grow 18% in 2021.
is up 33% for 2020 and analysts expect its revenue to increase by 24% in 2021.
The Dow Jones Industrial Average returned 10.3% for 2020 through Dec. 11. Here are the 30 components of the Dow sorted by how well analysts expect the stocks to perform over the next 12 months:
This table includes a full ratings breakdown. Again, you will need to scroll to see all the data.