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

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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
SPX,
-0.02%

to the Russell 1000 Index
RUI,
-0.13%
,
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
IWB,
-0.11%
.

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.
FB,
+0.28%
.
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.

NTRA,
-4.00%

91%

$37.94

$112.20

196%

-59%

Twilio, Inc. Class A

TWLO,
-4.00%

94%

$131.61

$324.18

146%

-50%

RingCentral Inc. Class A

RNG,
-3.75%

86%

$102.62

$227.92

122%

-45%

Iovance Biotherapeutics Inc.

IOVA,
-8.29%

86%

$16.16

$35.08

117%

-15%

10x Genomics Inc. Class A

TXG,
-4.15%

78%

$62.19

$119.43

92%

-58%

AZEK Co. Inc. Class A

AZEK,
-0.51%

94%

$21.54

$40.76

89%

-53%

Guardant Health Inc.

GH,
-0.89%

80%

$71.35

$133.64

87%

-29%

Uber Technologies Inc.

UBER-US

91%

$31.79

$59.21

86%

-24%

Olaplex Holdings Inc.

OLPX,
-1.71%

100%

$14.96

$27.83

86%

-49%

Generac Holdings Inc.

GNRC,
-0.76%

86%

$249.27

$453.12

82%

-29%

Avalara Inc.

AVLR,
-3.62%

100%

$88.19

$159.64

81%

-32%

Repligen Corp.

RGEN,
-3.31%

89%

$152.45

$272.63

79%

-42%

XPO Logistics Inc.

XPO,
-3.10%

88%

$55.02

$96.48

75%

-29%

IAC/InteractiveCorp.

IAC,
-0.49%

94%

$95.48

$166.43

74%

-27%

Ultragenyx Pharmaceutical Inc.

RARE,
-8.15%

79%

$78.44

$136.72

74%

-7%

MKS Instruments Inc.

MKSI,
+0.41%

85%

$114.99

$199.18

73%

-34%

General Motors Co.

GM,
+1.25%

79%

$40.63

$70.10

73%

-31%

GXO Logistics Inc.

GXO-US

80%

$59.16

$101.50

72%

-35%

Caesars Entertainment Inc.

CZR,
-0.74%

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.

CDK,

100%

1

$54.44

#N/A

N/A

Consolidated Edison Inc.

ED,
-1.11%

59%

17

$96.94

$82.14

-15%

Pinnacle West Capital Corp.

PNW,
-0.52%

56%

16

$77.14

$71.31

-8%

Avangrid Inc.

AGR,
-0.82%

55%

11

$48.53

$43.88

-10%

Southern Copper Corp.

SCCO,
+0.59%

53%

15

$73.22

$62.15

-15%

Clorox Co.

CLX,
-1.41%

53%

19

$143.52

$137.88

-4%

GameStop Corp. Class A

GME-US

50%

2

$141.46

$69.23

-51%

Mercury General Corp.

MCY,
-2.05%

50%

2

$52.50

N/A

N/A

ZimVie Inc.

ZIMV,
-0.76%

50%

2

$27.29

$34.00

25%

Ubiquiti Inc.

UI,
-1.32%

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.
GME,
-6.17%
,
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.
CLX,
-1.41%
,
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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