The S&P 500 has climbed 8% since June 16, when it closed at its lowest point this year. While the benchmark index is still down 17% this year, analysts expect it to soar 21% over the next 12 months.
Not every sector has rallied. For example, the S&P 500 energy sector pulled back 8% from June 16 through July 22. Then again, it is still the best-performing sector this year, with a 28% gain.
Below is a list of stocks in the S&P 500
SPX
that analysts expect to have the most upside following the rally of the past five weeks. And then there is a breakdown of sentiment for the index’s 11 sectors.
Ned Davis Research analysts Ed Clissold and London Stockton wrote in a note to clients on July 25 that an analysis of NDR Cycle Composite data stretching over 100 years showed patterns indicating the first-half weakness this year was likely to be followed by a stronger second half, even with “weakness into late Q3.” They also wrote that a “less hawkish” Federal Reserve and “reduced recession risks would support the case for the current rally to continue through year-end.”
These favored S&P 500 stocks have the most potential
Among the S&P 500, here are the 20 stocks with majority “buy” or equivalent ratings 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 through July 22 | Price change – 2022 through July 22 | Closing price – July 22 | Consensus price target | Implied 12-month upside potential | Share “buy” ratings |
| Royal Caribbean Group | RCL | -1% | -55% | $34.87 | $76.42 | 119% | 56% |
| Dish Network Corp. Class A | DISH | 12% | -42% | $18.70 | $38.53 | 106% | 68% |
| Warner Bros. Discovery Inc. Series A | WBD | 7% | -38% | $14.65 | $29.78 | 103% | 52% |
| Caesars Entertainment Inc. | CZR | 13% | -54% | $42.65 | $79.50 | 86% | 94% |
| MGM Resorts International | MGM | 13% | -31% | $30.94 | $51.92 | 68% | 63% |
| APA Corp. | APA | -22% | 21% | $32.41 | $53.46 | 65% | 55% |
| News Corp. Class A | NWSA | 9% | -24% | $16.88 | $27.33 | 62% | 82% |
| Halliburton Co. | HAL | -18% | 20% | $27.46 | $43.41 | 58% | 81% |
| Delta Air Lines Inc. | DAL | 6% | -20% | $31.35 | $49.41 | 58% | 85% |
| Generac Holdings Inc. | GNRC | 7% | -32% | $239.93 | $373.84 | 56% | 96% |
| Diamondback Energy Inc. | FANG | -15% | 5% | $113.43 | $176.61 | 56% | 88% |
| Marathon Oil Corp. | MRO | -15% | 32% | $21.75 | $33.64 | 55% | 57% |
| Meta Platforms Inc. Class A | META | 5% | -50% | $169.27 | $260.68 | 54% | 72% |
| Alaska Air Group Inc. | ALK | 11% | -18% | $42.75 | $65.73 | 54% | 92% |
| Match Group Inc. | MTCH | -1% | -45% | $72.21 | $110.79 | 53% | 95% |
| Penn National Gaming Inc. | PENN | 26% | -35% | $33.79 | $51.76 | 53% | 74% |
| Signature Bank | SBNY | 5% | -46% | $175.89 | $268.29 | 53% | 100% |
| General Motors Co. | GM | 10% | -41% | $34.67 | $52.85 | 52% | 71% |
| SVB Financial Group | SIVB | -7% | -47% | $361.36 | $538.91 | 49% | 71% |
| EOG Resources Inc. | EOG | -16% | 14% | $101.00 | $149.62 | 48% | 66% |
| Source: FactSet | |||||||
Click the tickers for more about each company.
You should also read Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.
Note: News Corp.
NWSA
is MarketWatch’s parent company.
S&P 500 sector breakdown
Here’s a summary of S&P 500 sectors’ performance and analysts’ median price targets. The sectors are sorted alphabetically:
| S&P 500 sector | Price change -June 16 through July 22 | Price change – 2022 through July 22 | Closing price – July 22, 2022 | Median target price | Implied 12-month upside potential |
| Communication Services | 4% | -30% | 187.88 | 248.51 | 32% |
| Consumer Discretionary | 15% | -25% | 1,214.18 | 1,514.14 | 25% |
| Consumer Staples | 6% | -5% | 761.15 | 844.13 | 11% |
| Energy | -8% | 28% | 542.80 | 707.75 | 30% |
| Financials | 7% | -16% | 544.18 | 644.05 | 18% |
| Health Care | 9% | -8% | 1,512.34 | 1,723.07 | 14% |
| Industrials | 6% | -15% | 764.72 | 895.29 | 17% |
| Information Technology | 11% | -21% | 2,400.75 | 2,953.57 | 23% |
| Materials | 1% | -17% | 472.06 | 582.84 | 23% |
| Real Estate | 9% | -19% | 264.62 | 308.96 | 17% |
| Utilities | 7% | -3% | 352.85 | 392.02 | 11% |
| S&P 500 | 8% | -17% | 3,961.63 | 4,781.45 | 21% |
| Source: FactSet | |||||
Keep in mind that analysts working for brokerage firms tend to accentuate the positive. For the entire S&P 500, the median price target suggests 21% upside potential over the next 12 months.
The easiest way to play the benchmark index is by purchasing shares of an exchange-traded fund that tracks it. The largest is SPDR S&P 500 ETF Trust
SPY.
You may be surprised that the favorite sector among analysts is communications services. Then again, this sector includes Meta Platforms Inc.
META,
which is down 50% this year but has made the list above.
This sector also includes Google holding company Alphabet Inc.
GOOG
GOOGL.
Among analysts polled by FactSet, 94% rate Alphabet’s Class A shares a buy or the equivalent; their consensus price target of $150.74 implies 40% upside over the closing price of $107.90 on July 22.
One easy way to gain exposure to this sector is the Communication Services Select Sector SPDR ETF
XLC,
which is 41% concentrated in Meta and the two Alphabet share classes.
The energy sector has held up better than West Texas crude oil
CL,
which has slumped 19.5% from June 16 through July 22, based on rolling front-month contracts. But analysts still love the sector and see 30% upside during a period of high demand and limited supply.
Two easy ways to invest in energy producers as a group include the Energy Select Sector SPDR ETF
XLE,
which holds all 21 stocks in the S&P 500 energy sector, and the iShares Global Energy ETF
IXC,
which holds all the stocks in XLE but adds large producers based outside the U.S., such as Shell PLC
SHEL,
TotalEnergies SE
TTE
and BP PLC
UK:BP.
The consumer discretionary sector is also heavily favored, with a median price target suggesting 25% upside. Together, Amazon.com Inc.
AMZN.
and Tesla Inc.
TSLA
make up 43% of the Consumer Discretionary Select Sector SPDR Fund
XLE.
Neither of those companies made the list above. For Amazon, 92% of analysts have favorable ratings and the consensus price target of $167.80 implies 37% upside for the stock over the closing price of $122.42 on July 22. By one measure, Amazon’s shares are trading at their cheapest level in six years. For Tesla, 65% of analysts rate the stock a buy or the equivalent, while the consensus price target of $930.91 implies 14% upside over the closing price of $816.73 on July 22.
