(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 SPX, -0.35% 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 DJIA, -0.41%.
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 TMUBMUSD10Y, 0.946%.
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:
- Tesla Inc. TSLA, +5.96% 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.
- Shares of Zoom Video Communications Inc. ZM, +1.09% 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. GM, -2.43% 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:
- Salesforce.com CRM, +0.67% 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 AMZN, -1.06% 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.
- Facebook FB, +0.70% 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.