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Philip van Doorn

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April 20, 2022, 6:42 a.m. EDT

These 20 highly rated stocks are expected to rise at least 70% over the next year

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By Philip van Doorn

A sliding stock market means many companies are on sale, which spells opportunity for investors with investment horizons of several years.

A list of the most favored names among analysts, along with consensus price targets, is below. All have fallen significantly this year but are expected by investment analysts to roar back.

Finding potential winners in a field of 1,000 stocks

To list the favorite stocks among analysts working for brokerage firms (known as sell-side analysts), we looked beyond the benchmark S&P 500 /zigman2/quotes/210599714/realtime SPX +3.06% to the Russell 1000 Index /zigman2/quotes/210598144/delayed RUI +3.14% , which represents about 90% of the U.S. public equity market. For the Russell component list, we used the holdings of the iShares Russell 1000 ETF /zigman2/quotes/209973077/composite IWB +3.10% .

Analysts tend to lean positive — “sell” ratings are relatively uncommon, in part because the stock market reacts quickly to bad news, usually in a harsh manner. So by the time an analyst downgrades a stock, its valuation to expected earnings or sales may be low enough that a negative rating isn’t warranted. A breakdown of ratings among the Russell 1000 is below.

Even among the Russell 1000, some stocks are thinly covered by analysts. For a list of favored stocks, we wanted to have a solid set of data, so our initial screen was confined to the 875 companies in the index covered by at least nine analysts polled by FactSet.

In case you are wondering, the most widely covered stock among the Russell 1000 is Facebook holding company Meta Platforms Inc. . Among the 56 analysts covering the stock, two-thirds rate the shares a “buy” or the equivalent. The consensus price target for the stock is $309.84, implying upside of 47% over the next year from Meta’s closing price of $210.77 on April 18. The stock was down 37% for 2022 through April 18, after rising 23% during 2021.

Back to the list of 875 stocks, here are the 20 rated “buy” or the equivalent by at least 75% of analysts with the most upside potential implied by consensus price targets:

Company Ticker Share “Buy” ratings Closing price – April 18 Consensus price target Implied 12-month upside potential Price change – 2022
TuSimple Holdings Inc. Class A TSP-US 80% $10.74 $34.56 222% -70%
Natera, Inc. /zigman2/quotes/208435998/composite NTRA 91% $37.94 $112.20 196% -59%
Twilio, Inc. Class A /zigman2/quotes/205796518/composite TWLO 94% $131.61 $324.18 146% -50%
RingCentral Inc. Class A /zigman2/quotes/204236620/composite RNG 86% $102.62 $227.92 122% -45%
Iovance Biotherapeutics Inc. /zigman2/quotes/206632254/composite IOVA 86% $16.16 $35.08 117% -15%
10x Genomics Inc. Class A /zigman2/quotes/214109268/composite TXG 78% $62.19 $119.43 92% -58%
AZEK Co. Inc. Class A /zigman2/quotes/218913553/composite AZEK 94% $21.54 $40.76 89% -53%
Guardant Health Inc. /zigman2/quotes/201348336/composite GH 80% $71.35 $133.64 87% -29%
Uber Technologies Inc. UBER-US 91% $31.79 $59.21 86% -24%
Olaplex Holdings Inc. /zigman2/quotes/229722202/composite OLPX 100% $14.96 $27.83 86% -49%
Generac Holdings Inc. /zigman2/quotes/208144117/composite GNRC 86% $249.27 $453.12 82% -29%
Avalara Inc. /zigman2/quotes/204268432/composite AVLR 100% $88.19 $159.64 81% -32%
Repligen Corp. /zigman2/quotes/210324360/composite RGEN 89% $152.45 $272.63 79% -42%
XPO Logistics Inc. /zigman2/quotes/205483484/composite XPO 88% $55.02 $96.48 75% -29%
IAC/InteractiveCorp. /zigman2/quotes/205118493/composite IAC 94% $95.48 $166.43 74% -27%
Ultragenyx Pharmaceutical Inc. /zigman2/quotes/204970392/composite RARE 79% $78.44 $136.72 74% -7%
MKS Instruments Inc. /zigman2/quotes/208573663/composite MKSI 85% $114.99 $199.18 73% -34%
General Motors Co. /zigman2/quotes/205226835/composite GM 79% $40.63 $70.10 73% -31%
GXO Logistics Inc. GXO-US 80% $59.16 $101.50 72% -35%
Caesars Entertainment Inc. /zigman2/quotes/205281174/composite CZR 94% $68.37 $116.50 70% -27%
Source: FactSet

Click on the tickers for more about each company.

You should also read  Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

Ratings breakdown for the Russell 1000

The above list of favored names is rather selective, as it is limited to companies in the Russell 1000 covered by at least nine analysts.

Keeping in mind that “sell” ratings are rare, let’s accentuate the negative. Among the Russell 1000, only 10 stocks have 50% or more “sell” or equivalent ratings.”

Company Ticker % “Sell” ratings Number of analysts covering company Closing price – April 18 Consensus price target Implied 12-month upside potential
CDK Global Inc. /zigman2/quotes/204369085/composite CDK 100% 1 $54.44 #N/A N/A
Consolidated Edison Inc. /zigman2/quotes/207137172/composite ED 59% 17 $96.94 $82.14 -15%
Pinnacle West Capital Corp. /zigman2/quotes/202967011/composite PNW 56% 16 $77.14 $71.31 -8%
Avangrid Inc. /zigman2/quotes/201653155/composite AGR 55% 11 $48.53 $43.88 -10%
Southern Copper Corp. /zigman2/quotes/205202467/composite SCCO 53% 15 $73.22 $62.15 -15%
Clorox Co. /zigman2/quotes/206443229/composite CLX 53% 19 $143.52 $137.88 -4%
GameStop Corp. Class A GME-US 50% 2 $141.46 $69.23 -51%
Mercury General Corp. /zigman2/quotes/200837562/composite MCY 50% 2 $52.50 N/A N/A
ZimVie Inc. /zigman2/quotes/233006124/composite ZIMV 50% 2 $27.29 $34.00 25%
Ubiquiti Inc. /zigman2/quotes/202360275/composite UI 50% 2 $285.82 $279.50 -2%
Source: FactSet

Many of these companies have hardly any coverage by sell-side analysts. That includes GameStop Corp. /zigman2/quotes/203755179/composite GME -4.80% , one of the favorite names among day-traders making use of the WallStreetBets Reddit forum. The most widely covered name on this list is Clorox Co. /zigman2/quotes/206443229/composite CLX +0.46% , which flew high early during the coronavirus pandemic.

With the Russell 1000 “sell list” out of the way, and no minimum number of analysts for any company’s coverage, here’s a breakdown of percentages for some of the rating ranges. Some ranges overlap, and the ranges don’t add up to the full index:

Ratings range Percentage of Russell 1000
Majority “buy” or equivalent 61%
Majority neutral ratings 22%
Majority “sell” ratings 1%
100% “buy” 3%
75% or more “buy” 28%
50% to 74% “buy” 39%
25% to 49% “buy” 22%
Source: FactSet

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