Phew. The horrible year for the S&P 500 that was 2022 is finally almost over. And analysts have picked their favorite places to make money next year.
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Analysts believe that 10 S&P 500 stocks, including Dish Network (PLATE), You’re here (TSLA) and Amazon.co.uk (AMZN), will gain 60% or more over the next 12 months. These are the price targets of stock analysts that show the greatest potential for making money in 2023, according to an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
The big question mark looming is whether the recession will hit in 2023. And the signs are starting to point to yes.
“Like a deflated holiday lawn ornament…[Fed Chairman Jerome Powell’s]press conference dashed investors’ hopes of averting a recession and showed that history could once again turn out to be correct in previously warning of a potential economic downturn,” said CFRA strategist Sam Stovall.
And that means making money could be tough next year. But not impossible.
Looking for opportunities in the S&P 500
Analysts are becoming more bearish on 2023 as the weeks go by. But they still call winners.
Hopes are highest for satellite communications company Dish Network. Analysts believe the S&P 500 stock, which has cratered 57% this year, will rise 134.7% next year. That’s based on analysts’ 12-month average price target of 32.43 per share, up from Monday’s close of 13.82.
Dish Network is a deep value game. It is part of the S&P 500 Pure Value Index, which only holds stocks that completely align with value stocks. Investors only pay $4.79 for a claim of $1 in income over the past 12 months. This makes the stock very cheap relative to the S&P 500. Investors pay $20, or about four times more, for a $1 claim of profit from S&P 500 companies.
But being a precious game also comes with risks. Analysts believe Dish Network’s adjusted earnings will fall nearly 31% this year and another 36% in 2023.
Will Musk and Bezos buy them back in 2023?
Of all the analyst calls for the best stocks of 2023, Tesla and Amazon.com are among the most surprising. The two once-hot stocks quickly trended south in 2022.
But could next year be better for them? For Tesla, analysts believe the stock will rise nearly 80% over the next 12 months. That would be a welcome rally for a stock that’s down 58% this year. Tesla too has a lot of growth behind it. Analysts believe the company’s adjusted earnings per share will jump more than 80% this year on more than 50% higher revenue to $83.3 billion.
And it’s not just a lucky year. Analysts believe Tesla’s adjusted earnings will grow another 37% in 2023. It’s not easy to find S&P 500 companies that are likely to grow a year from now, possibly before a recession.
Analysts are almost equally bullish on Amazon.com shares. Yes, the online retailer’s shares are down 49.2% this year to 84.61. But analysts believe that in 12 months they will rise to 141.68, almost 68% higher.
But in this case, analysts are banking on a comeback year in 2023 to follow a dismal 2022. Amazon is expected to return to earnings of $1.69 per share in 2023, after losing 9 cents per share in 2022.
What’s new for the S&P 500 in 2023?
It’s important to note, however, that analysts are rapidly reducing their expectations for 2023. And that means the forecasts are just educated guesses at this point.
Analysts are now calling for an “imminent earnings cut,” Stovall said. For the earnings forecast for the current fourth quarter of 2022 through the second quarter of 2023, “the S&P 500 EPS estimates are flat to lower, while their guidance for September 30, 2022 showed gains for all three quarters”.
It’s not a big trend to trade.
2023 is looking bright for these S&P 500 stocks
Analysts See Most Upside Based on 12-Month Price Targets
| Company | Symbol | Year-to-date % ch. | Reverse job | Sector |
|---|---|---|---|---|
| DISH Network | (PLATE) | -57.4% | 134.7% | Communication Services |
| Warner Bros. Discovery | (WBD) | -61.2% | 125.6% | Communication Services |
| You’re here | (TSLA) | -57.6% | 79.6% | Consumer Discretionary |
| Catalent | (CTLT) | -65.9% | 71.3% | Health care |
| Amazon.co.uk | (AMZN) | -49.2% | 67.5% | Consumer Discretionary |
| MatchGroup | (MTCH) | -69.7% | 65.6% | Communication Services |
| Generac Holdings | (GNRC) | -74.2% | 65.5% | Industrial |
| EQT | (EQT) | 65.5% | 63.9% | Energy |
| Global Payments | (GPN) | -31.3% | 62.4% | Computer science |
| Signature Bank | (SBNY) | -65.0% | 60.6% | finance |
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