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The Pros’ Picks: 22 Top Stocks to Invest In for 2022 | Kiplinger

22 best stocks to buy 2022

Wall Street’s analyst community is broadly optimistic about the market’s prospects for the year ahead – but they’re torn about where exactly those gains will come from. In other words, 2022’s top stocks to invest in could come from numerous corners of the market.

Just consider the headwinds that the pros are factoring in as the new year approaches. Inflation. Supply-chain chaos. The potential for more COVID disruptions. Sky-high equity valuations. And none of that accounts for potential “black swan” events in 2022.

Still, the consensus direction for the stock market’s arrow remains up for 2022. Infrastructure spending and a resumption of the economy’s rehabilitation should help prop up equities in general, goes Wall Street’s thinking.

“We expect solid economic and earnings growth in 2022 to help U.S. stocks deliver additional gains next year,” says Ryan Detrick, chief market strategist for LPL Financial, the largest independent broker-dealer in the U.S. “If we are approaching – or are already in – the middle of an economic cycle with at least a few more years left (our view), then we believe the chances of another good year for stocks in 2022 are quite high.”

Also noteworthy is LPL’s S&P 500 target for 2022, which stands at 5,050 at the midpoint. That represents a roughly 10% gain from when the call was made Dec. 20, but closer to 5% from today’s prices. Plenty of other Wall Street strategists have similar targets. Thus, if you want anything more than a mid-single-digit return in 2022, you might need to stray from the index and instead delve into individual picks.

But where should you begin?

Here are 22 of the pros’ highest-conviction stocks to invest in for 2022. We used TipRanks data to unveil the crème de la crème, as viewed by Wall Street’s analyst community. Each stock currently earns a consensus Strong Buy rating based on opinions from analysts surveyed by TipRanks. 

As of today, these stocks are expected to produce upside of between 10% and 82% over the next 12 months – handily more than consensus S&P 500 projections. And like Kiplinger’s best stocks for 2022, they represent just about every corner of the market.

Data, including consensus price targets and ratings, is as of Dec. 28. Stocks listed in reverse order of projected 2022 returns.

1 of 22

Charles Schwab

Two women walking by a Charles Schwab sign
  • Market value: $161.6 billion
  • TipRanks consensus price target: $95.80 (10% upside potential)
  • TipRanks consensus rating: Strong Buy

Financial stocks can thrive in an environment of rising interest rates and high liquidity. Banks can earn even more on their lending products (think mortgages and car loans), and services firms that make money from trading volumes will collect more in fees. One firm that has done particularly well is Charles Schwab (SCHW, $85.50), which is involved in both these services, as well as wealth management.

SCHW shares, which are poised to finish 2021 up by about 60% or so, aren’t expected to have as explosive a 2022, but they’re still among the pros’ favorite stocks to invest in.

Deutsche Bank’s Brian Bedell, who calls SCHW stock a “top pick,” is encouraged by Schwab’s “balanced focus on organic growth, client service, [and] merger integration,” as well as its “ability to generate significant financial operating leverage to higher interest rates and client asset growth.”

He also sees much more upside to shares than the analyst average price target, which implies 10% returns over the next 12 months. Bedell’s $120 PT would see Schwab shares return another 40% from current prices.

Jefferies also calls Schwab a “top pick” among brokers, asset managers and exchanges. “Areas where SCHW could flex its muscle on the competition include: options pricing, payment for order flow (PFOF) practices, deposit pricing as well as asset management products (both third party and advice services),” Jefferies’ analyst team says.

Wall Street is plenty bullish in general, with eight of 10 covering analysts issuing Buy calls on SCHW over the past three months. See which other analysts are in the Schwab Buy camp on TipRanks.

2 of 22

Applied Materials

Solar wafer inspection
  • Market value: $141.8 billion
  • TipRanks consensus price target: $175.84 (10% upside potential)
  • TipRanks consensus rating: Strong Buy

A perfect storm materialized for the semiconductor industry over the past couple years: a digital transformation and ecommerce boom for electronics combined with shipping backlogs and work shortages.

Among the beneficiaries has been Applied Materials (AMAT, $159.64).

The California-based integrated circuit producer has been integral to the domestic tech industry, as the majority of chip manufacturing is located in Taiwan and elsewhere overseas. The boom in the importance of data centers, 5G, and the Internet of Things (IoT) has kept demand for AMAT’s products strong.

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CFRA recently added Applied Materials to its favorite chip stocks to invest in, upgrading shares from Buy to Strong Buy.

“We see upside to estimates driven by two trends: 1) AMAT continuing to gain market share in process control, more specifically wafer inspection and e-beam technology with leading-edge customers, and 2) demand from foundry/ logic capacity expansions evident in Intel’s higher capex guidance and Samsung’s plans to triple its foundry capacity by 2026,” says CFRA analyst Keven Young.

The analyst adds that demand also should be supported by the U.S. and Europe, which are “looking to boost their own chip manufacturing presences, which will likely be done via smaller and less efficient fabs, boosting WFE capital intensity and benefitting equipment suppliers.”

A solid 12 of 15 analysts covering AMAT shares have called it a Strong Buy or Buy, versus just three Holds and no Sells of any kind. Hear what else the pros have to say about AMAT on TipRanks.

3 of 22


cans of coke in ice
  • Market value: $253.3 billion
  • TipRanks consensus price target: $64.53 (10% upside potential)
  • TipRanks consensus rating: Strong Buy

Coca-Cola (KO, $58.65) has been slower than most to recover from its COVID-recession losses, but it’s primed to enter 2022 nipping at its previous all-time highs. The beverage maker has been experiencing strong momentum in sales of mini packs and Coke Zero Sugar, and expects significant growth from its recently acquired British coffee chain, Costa Coffee.

Evercore ISI analyst says that while KO would like to continue innovating on a meaningful level, the “vast majority of innovations don’t work.” The company is so well-entrenched in its consumers’ interests that changes to formulas in its syrups and new flavor options are often shunned for classic offerings.

Furthermore, along with rebounding sales from households, the reopening of restaurants and other food purveying establishments should result in higher sales volumes of Coca-Cola products, as these end markets make up a sizeable portion of KO’s profits.

Credit Suisse analysts (Outperform) believe KO is one of the best stocks to invest in among consumer staples picks, calling it a “top pick.”

“With the pandemic’s worst likely passed, we think Coke is now poised for a period of mid-single, maybe even double-digit topline growth and high-single digit bottom line growth (ahead of guidance),” says Credit Suisse (Outperform, equivalent of Buy). “In recent weeks, a series of meetings with management and industry participants affirmed this view.”

Six of eight analysts surveyed by TipRanks categorize Coca-Cola stock as a Buy. Check out their price targets and analysis at TipRanks

4 of 22


Lowe's store
  • Market value: $170.9 billion
  • TipRanks consensus price target: $280.44 (11% upside potential)
  • TipRanks consensus rating: Strong Buy

Home improvement boomed during the depths of the pandemic while individuals were stuck at home. Do-it-yourself trends and design interest pushed stocks like Lowe’s (LOW, $253.70) to new heights. Shares in the home improvement retailer have more than doubled from their pre-pandemic peak, and they could improve further still in 2022 as continued COVID flare-ups prompt homeowners to continue investing in their houses.

Wells Fargo Securities analyst Zachary Fadem is among 12 of 16 covering analysts who have said LOW stock is a Buy over the past three months.

“[The] LOW market delivery model is expanding nationwide in the next 18 months with long-term potential for higher conversion, margin expansion and higher inventory turns,” says Fadem, who has a $295 price target on Lowe’s stock, implying 16% upside across 2022.

“The key takeaway from LOW’s investor event was that it’s well positioned to gain market share next year independent of the macro backdrop,” adds UBS analyst Michael Lasser (Buy). “Plus, it has several levers that it can pull to generate margin expansion in a variety of top-line scenarios.”

Lasser also likes Lowe’s valuation, which is cheaper than both the overall market and rival Home Depot (HD). Check out Wall Street’s average, highest and lowest price targets for LOW on TipRanks.

5 of 22

Johnson & Johnson

Johnson & Johnson building
  • Market value: $446.7 billion
  • TipRanks consensus price target: $189.83 (12% upside potential)
  • TipRanks consensus rating: Strong Buy

Johnson & Johnson (JNJ, $169.67) could be set up as one of the best stocks to invest in well past 2022, forecasting high pharmaceutical sales growth through 2025 and limited impact from expiring patents.

Wells Fargo Securities analyst Larry Biegelsen (Overweight, equivalent of Buy) notes that J&J’s 2025 target for pharmaceutical revenues backing out COVID vaccine sales is $60 billion, which implies 5.7% compound annual growth and is better than consensus expectations for $55 billion.

Biegelsen is also optimistic about the company’s drug pipeline.

“Between now and 2025, JNJ expects roughly 50 approvals/filings, comprised of 36 line extensions of existing products and 14 novel therapies with $1 billion-plus peak sales potential each,” he says. “While there…

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