Investor Alert

Deep Dive

Philip van Doorn

Dec. 1, 2021, 7:00 a.m. EST

These are Wall Street’s 20 favorite stocks as the Fed’s Powell jolts the market with taper talk

By Philip van Doorn

Investors unloaded stocks Tuesday after Federal Reserve Chairman Jerome Powell said it’s possible the central bank will remove stimulus faster than originally planned.

Powell, along with Treasury Secretary Janet Yellen, appeared before the Senate Banking Committee. He said it could make sense for the Federal Open Market Committee to wrap up its bond-buying program a few months earlier than anticipated, catching investors off-guard.

That would presumably accelerate the increase of long-term interest rates, setting up “competition” for the attention of income-seeking investors, who have looked to the stock market for yields during a long period of unprecedentedly low interest rates.

The Dow Jones Industrial Average (DOW:DJIA) was down as much as 662 points (1.9%), while the benchmark S&P 500 Index (S&P:SPX) was also down as much as 1.9%.

Read: Stock losses deepen as Powell says appropriate to consider faster taper

Over the coming weeks, if the Fed has a clear change in direction, a sustained downturn in stocks could create new buying opportunities for long-term investors.

For those who don’t want to wait, a list of Wall Street’s favorite stocks, based on 12-month price targets, is below.

Stock screen for taper time

The interest-rate landscape may look quite a bit different a year from now. Sell-side analysts (the ones working for brokerage firms) will incorporate their own expectations for interest rates and their effect on companies’ costs and (for the financial sector) interest margins.

Starting with the S&P 500, there are 92 stocks rated “buy” or the equivalent among at least 75% of sell-side analysts polled by FactSet. Here are the 20 among the 92 with the highest upside potential, based on consensus 12-month price targets and share prices at about 12:20 p.m. ET on Nov. 30:

Company Ticker Share “buy” ratings Price – 12:20 p.m ET Nov. 30 Consensus price target Implied 12-month upside potential
Global Payments Inc. (NYS:GPN) 85% $118.35 $198.79 68%
Alaska Air Group Inc. (NYS:ALK) 93% $47.85 $77.93 63%
Caesars Entertainment Inc. (NAS:CZR) 93% $87.76 $138.23 58%
T-Mobile US Inc. (NAS:TMUS) 84% $109.08 $168.08 54%
PayPal Holdings Inc. (NAS:PYPL) 83% $181.12 $276.54 53%
Fidelity National Information Services Inc. (NYS:FIS) 76% $103.37 $156.96 52%
PTC Inc. (NAS:PTC) 76% $106.52 $160.92 51%
Teleflex Inc. (NYS:TFX) 75% $301.03 $442.44 47%
News Corp. Class A (NAS:NWSA) 88% $21.58 $31.63 47%
Southwest Airlines Co. (NYS:LUV) 87% $43.49 $62.42 44%
Lamb Weston Holdings Inc. (NYS:LW) 78% $51.92 $73.57 42%
Visa Inc. Class A (NYS:V) 92% $193.97 $274.19 41%
Fiserv Inc. (NAS:FISV) 84% $95.32 $133.04 40%
Howmet Aerospace Inc. (NYS:HWM) 85% $27.88 $38.70 39%
Mastercard Inc. Class A (NYS:MA) 89% $313.46 $434.66 39%
Schlumberger Ltd. (NYS:SLB) 85% $28.61 $39.51 38%
Valero Energy Corp. (NYS:VLO) 81% $66.16 $90.76 37%
Boston Scientific Corp. (NYS:BSX) 86% $38.37 $51.64 35%
Cigna Corp. (NYS:CI) 77% $193.85 $260.54 34%
Leidos Holdings Inc. (NYS:LDOS) 77% $88.67 $116.90 32%

Click on the tickers for more about each company. Click  here  for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

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