The S&P 500 is up 8% since June 16, when it closed at its lowest point this year. While the benchmark is still down 17% this year, analysts expect it to soar 21% over the next 12 months.
Not all sectors have concentrated. For example, the energy sector of the S&P 500 retreated 8% from June 16 to July 22. Again, it remains the best performing sector this year, with a gain of 28%.
Below is a list of stocks in the S&P 500 SPX, -0.03% that analysts expect to see more upside after the rally of the past five weeks. And then there’s a breakdown of sentiment across the index’s 11 sectors.
Ned Davis Research analysts Ed Clissold and London Stockton wrote in a July 25 note to clients that an analysis of NDR Cycle Composite data spanning more than 100 years showed patterns that indicated weakness from the first half of this year would likely be followed by a stronger second half. , even with “weakness at the end of the third quarter”. They also wrote that a “less hawkish” Federal Reserve and “reduced recession risks would support the case for the current recovery to continue through the end of the year.”
These favored S&P 500 stocks have more potential
Among the S&P 500, here are the 20 stocks with majority “buy” ratings or equivalent that are expected to rise the most over the next 12 months, based on consensus price targets among analysts polled by FactSet:
Company Ticker Price Change: June 16 to July 22 Price Change: 2022 to July 22 Closing Price: July 22 Consensus Price Target 12-Month Implied Upside Potential “Buy” Ratings ” of shares Royal Caribbean Group RCL, -1.46% -1% -55% $34.87 $76.42 119% 56% Dish Network Corp. Class A DISH, -2.17% 12% -42% $18.70 $38.53 106% 68% Warner Bros. 52% Caesars Entertainment Inc. CZR, -1.30% 13% -54% $42.65 $79.50 86% 94% MGM Resorts International MGM, -0.92% 13% -31% $30.94 $51.92 68% 63 % APA Corp. 22% 21% $32.41 $53.46 65% 55% News Corp. Class A NWSA, +0.15% 9% -24% $16.88 $27.33 62% 82% Halliburton Co. HAL, +3.22% -18% 20% 23.81% $27,416 Delta Air Lines Inc. DAL, +0.03% 6% -20% $31.35 $49.41 58% 85% Generac Holdings Inc. GNRC, -0.66% 7% -32% $239.93 $373.84 56% 96% 96% Diamondback Energy Inc.91% +5 FANG, Diamondback Energy Inc. -15% 5% $113.43 $176.61 56% 88% Marathon Oil Corp. MRO, +6.41% -15% 32% $21.75 $33.64 55% 57% Metaplatforms In c. Class A META, -1.75% 5% -50% $169.27 $260.68 54% 72% Alaska Air Group Inc. ALK, +2.07% 11% -18% $42.75 $65.73 54% 92% Match Group Inc. MTCH, -1.12% -1% -45% $72.21 $110.79 53% 95% Penn National Gaming Inc. PENN, -0.04% 26% -35% $33.79 $51.76 53% 74% Signature Bank SBNY, +2.71% 5% -46% $175.82% $176.82 $99 % General Motors Co. GM, -0.46% 10% -41% $34.67 $52.85 52% 71% SVB Financial Group SIVB, +7.91% -7% -47% $361.36 $538.91 49% 71% EOG Resources, +4% EOG, Inc. -16% 14% $101.00 $149.62 48% 66% Source: FactSet
Click on the tickers to learn more about each company.
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S&P 500 Sector Breakdown
Here’s a summary of the performance of S&P 500 sectors and analysts’ average price targets. The sectors are arranged alphabetically:
S&P 500 Sector Price Change: June 16 to July 22 Price Change: 2022 to July 22 Closing Price: July 22, 2022 Average Price Target 12-Month Implied Upside Potential Communication Services 4 % -30% 187.88 248.51 32% Consumer discretion – 32% 25% 1,214.18 1,514.14 25% Basic consumption 6% -5% 761.15 844.13 11% Energy -8% 28% 542 .80 707.75 30% Finance 7% -16% 544.15 844.13% Health 614.18% 614.18% Health 614.18% 707.75 30% % -15% 764.72 895.29 17 % Information Technologies 11% -21% 2,400.75 2,953.57 23% Materials 1% -17% 472.06 582.84 23% Real Estate 9% -19% 26% -19% Utilities 26% -19% 21 .3% 32.962 32.3% 472.06 582.84 23% S&P 500 8% -17% 3,961.63 4,781.45 21% Source: FactSet
Note that analysts working for brokerage firms tend to accentuate the positive. For the entire S&P 500, the average price target suggests a potential upside of 21% over the next 12 months.
The easiest way to play the benchmark is by buying shares of an exchange-traded fund that tracks it. The largest is SPDR S&P 500 ETF Trust SPY, -0.03% .
You might be surprised that the favorite sector among analysts is communications services. On the other hand, this sector includes Meta Platforms Inc. META, -1.75% , which is down 50% this year, but topped the previous list.
This sector also includes Google’s holding company Alphabet Inc. GOOG, -0.54% GOOGL, -0.79%. Among analysts polled by FactSet, 94% rate Alphabet’s Class A shares a buy or the equivalent; its consensus price target of $150.74 implies a 40% upside from the closing price of $107.90 on July 22.
An easy way to gain exposure to this sector is the Select Communications Services Sector SPDR ETF XLC, -0.55% , which is 41% concentrated in Meta and the two Alphabet share classes.
The energy sector fared better than West Texas crude CL.1, +2.22% , which fell 19.5% from June 16 to July 22, according to front-month contracts. But analysts still love the sector and see 30% upside during a period of high demand and tight supply.
Two easy ways to invest in energy producers as a group include the Energy Select Sector SPDR ETF XLE, +3.61% , which holds all 21 stocks in the S&P 500 energy sector, and the iShares Global Energy ETF IXC, +3.20%, which owns …