The major indexes are trading near record highs and valuations may be stretched, but industry analysts say dozens of quality stocks are priced for big upside in the next 12 months or so.
True, it's getting harder to spot bargains, what with the benchmark S&P 500 up by 38% on a price basis since its early April low. The "growthier" but riskier Nasdaq Composite gained more than 50% since it bottomed in spring.
That has taken a lot of potential upside out of many of Wall Street's top S&P 500 stocks. But a strong third-quarter earnings season and rising estimates for corporate profits have the bulls on the move.
A weaker dollar is another tailwind, as it makes U.S. companies' goods and services cheaper overseas. The fact that the Federal Reserve is expected to cut interest rates at least once more before the end of the year is also boosting stocks.
"U.S. trade deals with the U.K., E.U. and Japan have provided some stabilization after April’s tariff shock," writes Marc Nachmann, global head of Asset & Wealth Management at Goldman Sachs. "U.S. technology stock valuations have risen amid investor enthusiasm for AI, but we believe price appreciation primarily stems from fundamental growth and strong balance sheets, not irrational exuberance."
The bottom line is that although markets have been a bit choppy lately, the fundamental outlook for equities remains bright.
Analysts still spy big bargains
As long as a company's earnings prospects are rising faster than its share price, its stock can very much look like a bargain, and therefore a potential market beater. To get a sense of where to start digging for such finds, we screened the S&P 500 by implied upside to industry analysts' average price targets.
What we found: 33 stocks in the S&P 500 have implied upside of at least 33% over the next 12 months or so, according to data from S&P Global Market Intelligence.
But before we get to the S&P 500 stocks that could rally the most based on price targets, a caveat is in order.
Price targets are a blunt tool when it comes to sussing out cheap stocks. Committing capital based on a single data point is not an investment process.
It's also important to note that stocks with the most upside potential don't necessarily get consensus Buy recommendations from the very same analysts whose models spit out the target prices.
With that warning out of the way, if you're looking for widely traded stocks with the most upside potential, the names listed below aren't a bad place to start.
Company (Ticker) |
Price target |
Upside to price target |
Consensus recommendation score |
Consensus recommendation |
|---|---|---|---|---|
Oracle (ORCL) |
$336.95 |
62.2% |
1.79 |
Buy |
The Trade Desk (TTD) |
$62.33 |
61.4% |
2.11 |
Buy |
Charter Communications (CHTR) |
$314.94 |
57.5% |
2.71 |
Hold |
Axon Enterprise (AXON) |
$822.50 |
51.3% |
1.63 |
Buy |
Smurfit WestRock (SW) |
$53.73 |
48.8% |
1.31 |
Strong Buy |
Norwegian Cruise Line Holdings (NCLH) |
$27.93 |
48.3% |
1.71 |
Buy |
Super Micro Computer (SMCI) |
$48.53 |
44.1% |
2.58 |
Hold |
News Corp. (NWSA) |
$36.69 |
43.5% |
1.75 |
Buy |
Fiserv (FISV) |
$95.48 |
42.6% |
2.51 |
Hold |
Moderna (MRNA) |
$35.78 |
42.1% |
2.82 |
Hold |
Mosaic (MOS) |
$34.33 |
41.8% |
2.11 |
Buy |
Omnicom Group (OMC) |
$100.56 |
41.6% |
1.90 |
Buy |
LKQ Corp. (LKQ) |
$41.50 |
41.4% |
1.88 |
Buy |
Alexandria Real Estate Equities (ARE) |
$66.50 |
41.1% |
2.50 |
Buy |
Tyler Technologies (TYL) |
$649.83 |
40.7% |
1.78 |
Buy |
Nvidia (NVDA) |
$250.66 |
39.6% |
1.33 |
Strong Buy |
PG&E (PCG) |
$21.23 |
39.4% |
1.65 |
Buy |
Iron Mountain (IRM) |
$116.73 |
38.5% |
1.73 |
Buy |
Coinbase Global (COIN) |
$383.46 |
38.5% |
2.09 |
Buy |
Zebra Technologies (ZBRA) |
$358.47 |
38.2% |
1.82 |
Buy |
Weyerhaeuser (WY) |
$30.18 |
38.0% |
1.75 |
Buy |
ServiceNow (NOW) |
$1,147.35 |
37.8% |
1.46 |
Strong Buy |
Adobe (ADBE) |
$450.03 |
37.7% |
2.05 |
Buy |
Block (XYZ) |
$84.01 |
37.5% |
1.85 |
Buy |
Salesforce (CRM) |
$327.71 |
37.3% |
1.67 |
Buy |
Zoetis (ZTS) |
$165.36 |
37.0% |
1.89 |
Buy |
Carnival Corp. (CCL) |
$35.63 |
36.8% |
1.66 |
Buy |
Datadog (DDOG) |
$211.97 |
36.0% |
1.43 |
Strong Buy |
PayPal Holdings (PYPL) |
$82.75 |
35.1% |
2.45 |
Buy |
GoDaddy (GDDY) |
$175.20 |
34.7% |
2.12 |
Buy |
Vistra (VST) |
$230.71 |
34.4% |
1.55 |
Buy |
Sandisk (SNDK) |
$260.41 |
34.0% |
1.79 |
Buy |
Pool Corp. (POOL) |
$329.27 |
33.9% |
2.50 |
Buy |
Data as of December 4, courtesy of S&P Global Market Intelligence.
