Wall Street analysts expect the S&P 500 to rise 19% over the next 12 months. Here are their 10 favorite stocks.

By Joseph Adinolfi

Outside of a handful of highflying technology stocks, U.S. stocks have been practically flat in 2023, but on Wall Street, some analysts remain as bullish as ever.

An analysis of their projections for individual stocks' performance over the next 12 months has the S&P 500 index rising 19% from its level on Sept. 21, when the index closed at 4,330, according to an analysis from FactSet's John Butters.

Achieving these projections would mean the S&P 500 has to break above 5,000 for the first time.

"On Sept. 21, the bottom-up target price for the S&P 500 was 5152.11, which was 19.0% above the closing price of 4330.00," Butters said in his note.

At the sector level, investors expect information technology to see the largest advance, with a projected gain of 22.8%. Consumer Discretionary comes next with a projected gain of 22.7%, followed by real estate with a 22.6% jump. On the other hand, analysts see energy stocks bringing up the rear with a gain of just 10.7%, the smallest expected price increase of the S&P 500's 11 sectors.

The index's expected performance is based on lofty earnings growth forecasts, which contrast sharply to the year-over-year earnings declines from the past three quarters.

Wall Street analysts expect earnings growth of 12.2% for calendar-year 2024, a number that was reduced slightly last week for the first time in more than two months.

Meanwhile, the bottom-up earnings estimate for the third quarter has decreased by 0.2% since June 30, with the aggregate median estimate falling to $55.74 from $55.86.

Since these estimates for the S&P 500 are based on an aggregate of sell-side analysts' projections for individual stocks, Butters was able to break out the 10 stocks that Wall Street is most optimistic about, and the 10 that Wall Street expects will lag behind the rest of the index.

The outperformers

SolarEdge Technologies, Inc. SEDG (expected gain: 112.8%)Insulet Corporation PODD (75.1%)DexCom, Inc. DXCM (68.4%)FMC Corporation FMC (67.6%)United Airlines Holdings, Inc. UAL (67.1%)Moderna, Inc. MRNA(66.6%)ResMed Inc. RMD (65.4%)Etsy, Inc. ETSY (63.4%)Alaska Air Group, Inc. ALK (62.5%)MGM Resorts International MGM (60.7%)

The laggards

Expeditors International of Washington, Inc. EXPD (-5.3%)Tyson Foods, Inc. Class A TSN (-3.9%)Consolidated Edison, Inc. ED (-3.1%)Robert Half Inc. RHI (-2.1%)Amgen Inc. AMGN (-2.0%)Progressive Corporation PGR (-1.7%)International Business Machines Corp. IBM (-1.6%)Aon Plc Class A AON (-0.9%)Seagate Technology Holdings PLC STX (-0.7%)Cboe Global Markets Inc CBOE (-0.2%)

U.S. stocks have been sliding since the start of August, with the S&P 500 having fallen 5.5% since then. Still, the index remains up 13% since the start of the year after finishing Monday's session at 4,337.44, FactSet data show.

Rising Treasury yields, particularly 10-year note BX:TMUBMUSD10Y and 30-year bond yields BX:TMUBMUSD30Y, have been widely blamed for triggering the selloff in stocks.

-Joseph Adinolfi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-27-23 0747ET

Copyright (c) 2023 Dow Jones & Company, Inc.