Phew. The S&P 500's horrible year that was 2022 is finally over. And analysts have picked their favorite spots to make money this year.
Analysts think nine stocks in the S&P 500, including Dish Network, Tesla and Amazon.com, will gain 60% or more in the next 12 months. These are the stocks analysts' price targets show the greatest potential to make money in 2023, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
The big looming question mark is whether recession will hit in 2023. And signs are starting to point to yes.
"Like a deflating holiday lawn ornament ... (Fed Chairman Jerome Powell's) news conference drained investor hopes of avoiding a recession, and showed that history may again prove correct in previously warning of a potential economic downturn," said CFRA strategist Sam Stovall.
And that means making money might be tough next year. But not impossible.
Looking For Opportunities In The S&P 500
Analysts are turning more bearish on 2023 as each week passes by. But they're still calling for some winners.
Hopes are highest for satellite communications firm Dish Network. Analysts think the S&P 500 stock, which cratered 57% since the end of 2021, will rise 130% this year. That's based on analysts' average 12-month price target of 32.43 a share, up from Tuesday's price of 13.92.
Dish Network is a deep value play. It's a member of the S&P 500 Pure Value index, which only owns stocks that line up completely as a value stock. Investors are only paying $4.79 for a claim to $1 dollar in earnings the past 12 months. That makes the stock very cheap compared to the S&P 500. Investors are paying $20, or roughly four-times more, for a claim to $1 of profit from S&P 500 companies.
But being a value play comes with risks, too. Analysts think Dish Network's adjusted profit will fall nearly 31% this year and another 36% in 2023.
Will Musk and Bezos Redeem Themselves In 2023?
Among all analysts' calls for the top stocks of 2023, Tesla and Amazon.com are among the most surprising. Both formerly red-hot stocks went south fast in 2022.
But could next year go better for them? For Tesla, analysts think the stock will rise nearly 118% in the next 12 months. That would be a welcome rally for a stock down 69% over the past 12 months. Tesla, too, has plenty of growth behind it. Analysts think the company's adjusted profit per share will jump more than 80% this year on more than 50% higher revenue of $83.3 billion.
And it's not just a lucky year. Analysts think Tesla's adjusted profit will rise another 37% in 2023. It's not easy to find S&P 500 companies posed to grow in a year possibly heading into a recession.
Analysts are almost equally bullish on Amazon.com's stock. Yes, shares of the online retailer are down 64% this year to 85.88. But analysts think in 12 months' time they'll be back up to 140.54 or nearly 64% 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 making a profit of $1.69 a share in 2023, after losing 9 cents a share in 2022.
What's Up For S&P 500 In 2023?
It's important to note, though, that analysts are quickly downgrading their expectations for 2023. And that means forecasts are just educated guesses at this point.
Analysts are now calling for an "impending earnings recession," Stovall said. For profit forecasts for the current fourth quarter of 2022 through the second quarter of 2023, "S&P 500 EPS estimates are flat to down, whereas their Sept. 30, 2022 forecasts showed gains for all three quarters."
That's not a great trend to trade.
2023 Looking Bright For These S&P 500 Stocks
Analysts see the most upside based on 12-month price targets
| Company | Symbol | Implied upside to analysts' 12-month targets | Stock ch. past 12 months | Sector |
|---|---|---|---|---|
| DISH Network | 130.1% | -56.6% | Communication Services | |
| Tesla | 117.7% | -69.2% | Consumer Discretionary | |
| Warner Bros. Discovery | 115.4% | -59.3% | Communication Services | |
| EQT | 79.2% | 45.8% | Energy | |
| Norwegian Cruise Line | 69.0% | -42.9% | Consumer Discretionary | |
| Catalent | 65.5% | -64.7% | Health Care | |
| Amazon.com | 63.6% | -48.5% | Consumer Discretionary | |
| Caesars Entertainment | 62.7% | -55.1% | Consumer Discretionary | |
| Match Group | 61.7% | -69.0% | Communication Services |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
