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Goldman Sachs: Buy these 15 stocks for market-beating returns of at least 40% in 2022 — far above the 7% return the S&P 500 is likely to deliver

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE).

Spencer Platt/Getty Images

  • Goldman Sachs expects the S&P 500 to rise 7% this year, down from 27% in 2021.
  • As 2022 begins, the firm’s strategists ranked the stocks in the index by how much upside they see.
  • The first trading days of the year have been tumultuous, and experts say that will continue.

Heading into the new year, a lot of experts said 2022 was going to be more volatile and less profitable than 2021. So far, it’s delivering on that promise.

Stocks plunged this week and interest rates rose after the Federal Reserve released minutes from its December meeting, which showed that the Fed might tighten monetary policy faster than investors had expected.

Last month the central bank said it would cut back on its bond purchases faster than it had originally planned, and the new minutes show it might start selling the bonds it bought earlier in the pandemic.

All of that could push interest rates higher and help contain inflation, but it would also cut back on the easy money companies and investors have gotten used to, making borrowing more expensive and potentially reducing spending. That, in turn, could slow down both the economy and the stock market.

In a recent survey, Deutsche Bank asked 750 investors what kind of returns they were expecting from stocks this year. The average response was a gain of 4.2%.

Goldman Sachs is a bit more optimistic than that, if only slightly.

“We expect EPS growth will lift the level of the index to 5100 by year-end 2022, representing a 7% year/year return,” said David Kostin, the firm’s chief US equity strategist.

That forecast is much less impressive than the S&P 500’s 27% return last year, and it’s slightly below the long-term average for the stock market. But picking the right stocks is one way to beat these low expectations, which is why Kostin and company have organized the components of the S&P 500 based on the upside their firm expects for each stock in 2022.

Below are the 15 stocks that Goldman Sachs expects to see the biggest gains based on its analysts’ target prices. They’re ranked from lowest to highest based on the difference between those targets and their closing prices on Wednesday.

As for the stocks to avoid, Goldman advises steering clear of A.O. Smith, HP, and Southern — its analysts see a downside of about 30% for all three.

15. United Airlines

United Airlines
United Airlines

Markets Insider



Ticker: UAL

Sector: Industrials

Market cap: $15.0 billion

Price target: $65

Upside to target: 42.0%

Source: Goldman Sachs

14. Norwegian Cruise Line Holdings

Norwegian Cruise Line
Norwegian Cruise Line

Markets Insider



Ticker: NCLH

Sector: Consumer discretionary

Market cap: $9.4 billion

Price target: $31

Upside to target: 43.1%

Source: Goldman Sachs

13. Boeing

Boeing
Boeing

Markets Insider



Ticker: BA

Sector: Industrials

Market cap: $125.8 billion

Price target: $305

Upside to target: 43.1%

Source: Goldman Sachs

12. Hess

Hess
Hess

Markets Insider



Ticker: HES

Sector: Energy

Market cap: $25.2 billion

Price target: $118

Upside to target: 45.9%

Source: Goldman Sachs

11. Vertex Pharmaceuticals

Vertex Pharma
Vertex Pharma

Markets Insider



Ticker: VRTX

Sector: Healthcare

Market cap: $56.5 billion

Price target: $326

Upside to target: 47.2%

Source: Goldman Sachs

10. Alaska Air Group

Alaska Air
Alaska Air

Markets Insider



Ticker: ALK

Sector: Industrials

Market cap: $7.0 billion

Price target: $88

Upside to target: 60.6%

Source: Goldman Sachs

9. Salesforce.com

Salesforce
Salesforce

Markets Insider



Ticker: CRM

Sector: Information technology

Market cap: $245.0 billion

Price target: $370

Upside to target: 62.5%

Source: Goldman Sachs

8. Activision Blizzard

Activision Blizzard
Activision Blizzard

Markets Insider



Ticker: ATVI

Sector: Communication services

Market cap: $52.4 billion

Price target: $111

Upside to target: 67.4%

Source: Goldman Sachs

7. SolarEdge Technologies

SolarEdge
SolarEdge

Markets Insider



Ticker: SEDG

Sector: Information technology

Market cap: $14.4 billion

Price target: $420

Upside to target: 68.1%

Source: Goldman Sachs

6. Enphase Energy

Enphase
Enphase

Markets Insider



Ticker: ENPH

Sector: Information technology

Market cap: $24.1 billion

Price target: $270

Upside to target: 71.8%

Source: Goldman Sachs

5. Las Vegas Sands

Las Vegas Sands
Las Vegas Sands

Markets Insider



Ticker: LVS

Sector: Consumer discretionary

Market cap: $29.6 billion

Price target: $67

Upside to target: 81.2%

Source: Goldman Sachs

4. Moderna

Moderna
Moderna

Markets Insider



Ticker: MRNA

Sector: Healthcare

Market cap: $94.7 billion

Price target: $395

Upside to target: 83.5%

Source: Goldman Sachs

3. Incyte

Incyte
Incyte

Markets Insider



Ticker: INCY

Sector: Healthcare

Market cap: $15.9 billion

Price target: $136

Upside to target: 93.0%

Source: Goldman Sachs

2. ViacomCBS

ViacomCBS
ViacomCBS

Markets Insider



Ticker: VIAC

Sector: Industrials

Market cap: $21.4 billion

Price target: $65

Upside to target: 98.7%

Source: Goldman Sachs

1. Penn National Gaming

Penn National Gaming
Penn National Gaming

Markets Insider



Ticker: PENN

Sector: Consumer discretionary

Market cap: $8.5 billion

Price target: $99

Upside to target: 112.4%

Source: Goldman Sachs

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