Analysts recommend these blue-chip stocks in 2022.
Investors who hold stocks of businesses that are reliable, consistent, profitable and defensible can sleep well at night no matter what’s going on in the macroeconomic environment. Blue-chip stocks are large companies with strong brands, financially sound businesses and consistent earnings and cash flows. They also often pay sizable dividends. Blue-chip companies are typically leaders within their given market sectors and have successfully navigated economic downturns in the past. Here are 10 blue-chip stocks to buy that CFRA Research analysts recommend and that also have S&P Global Market Intelligence quality ratings of A or A+.
Apple Inc. (ticker: AAPL)
Apple produces the iPhone and other high-end consumer electronics devices. It is also one of the most financially sound blue-chip companies in the world, generating $94.6 billion in net income in 2021. Analyst Angelo Zino says Apple has an impressive ecosystem of devices and services, a high customer retention rate and a growing addressable market. Apple’s stable product replacement cycles and robust free cash flow are also impressive. Services revenue was up 12% in the fiscal third quarter, a high-margin growth source for Apple. CFRA has a “buy” rating and $175 price target for AAPL stock, which closed at $156.90 on Sept. 20.
Microsoft Corp. (MSFT)
Microsoft is the world’s largest software company and is most known for its Windows operating system and Azure cloud services business. Analyst John Freeman says Microsoft’s transition to a cloud-based subscription business has been smooth, and it has successfully transitioned customers to cloud versions of Office, Dynamics, Teams and other services. In fact, revenue from cloud-based services now makes up about 65% of Microsoft’s total sales. Azure cloud services revenue is still growing at a 40% annual pace as of the most recent quarter. CFRA has a “strong buy” rating and $376 price target for MSFT stock, which closed at $242.45 on Sept. 20.
UnitedHealth Group Inc. (UNH)
UnitedHealth is the largest U.S. managed care company, providing health plans and health care services to millions of customers. Analyst Paige Meyer says UnitedHealth’s expansion into new Affordable Care Act exchanges is a growth catalyst, and its planned $8 billion acquisition of Change Healthcare Inc. (CHNG) could help UnitedHealth integrate valuable technology into its Optum business. Meyer says UnitedHealth should trade at a premium to its historical earnings multiple because of its solid growth prospects, and the company’s goal of between 13% and 16% earnings growth is reasonable. CFRA has a “strong buy” rating and $665 price target for UNH stock, which closed at $522.80 on Sept. 20.
Visa Inc. (V)
Visa is a global credit card leader and owner of the world’s largest electronic payment network. Analyst David Holt says Visa’s stable business model is resistant to inflationary pressures and macroeconomic headwinds. Holt says Visa’s diversified exposure to different consumer categories helps the company maintain earnings and revenue growth in many different types of economic conditions. In the long term, Holt says Visa can grow operating leverage and generate high returns on capital. In addition, he says Visa can potentially fuel future growth by expanding into adjacent payment verticals. CFRA has a “buy” rating and $265 price target for V stock, which closed at $192.07 on Sept. 20.
Mastercard Inc. (MA)
Like Visa, Mastercard is a leading credit card provider and technology-focused payment network. Holt says Mastercard is also insulated from supply chain disruptions and inflation, and its diversified business makes the company somewhat immune to the cyclical ups and downs in various market sectors. Holt says Mastercard is a significant beneficiary from the secular shift from analog check and cash payments to mobile and digital payments. In fact, he projects Mastercard will maintain annual revenue growth in the high-teen-percentage range through at least 2024. CFRA has a “buy” rating and $440 price target for MA stock, which closed at $313.27 on Sept. 20.
Home Depot Inc. (HD)
Home Depot is the leading North American home improvement retailer. The home improvement business boomed during the pandemic in 2020 and 2021 thanks to historically low mortgage rates and a rise in home improvement projects driven by social distancing. While mortgage rates have risen significantly in 2022, analyst Kenneth Leon says the home improvement market is less sensitive to interest rates than the rest of the housing market. In fact, the Joint Center for Housing Studies projects 17.4% home improvement spending growth in 2023. CFRA has a “buy” rating and $365 price target for HD stock, which closed at $274.17 on Sept. 20.
McDonald’s Corp. (MCD)
McDonald’s is the world’s largest fast-food company. Analyst Siye Desta says the company’s 10% same-store sales growth and declining revenue in the second quarter reflect an uneven recovery of its global business, with international numbers being dragged down by COVID-19 lockdowns in China and the conflict in Ukraine. However, investments in mobile ordering and delivery should help fuel digital sales growth, and Desta projects 9% to 11% full-year same-store sales growth in 2022. McDonald’s may also gain market share as inflation drives restaurant customers to value-oriented names. CFRA has a “buy” rating and $280 price target for MCD stock, which closed at $255.40 on Sept. 20.
Accenture PLC (ACN)
Accenture is an information technology services provider that offers consulting and outsourcing services for global clients. Holt says Accenture is a high-quality investment with a business model that is resistant to macroeconomic slowdowns. He says the blue-chip company has a sound balance sheet and a history of above-average earnings growth. Holt says Accenture is firing on all cylinders, generating double-digit growth in both its consulting and outsourcing segments as customers look to cut payroll costs. Accenture also reported 15% new-bookings growth in the fiscal third quarter. CFRA has a “buy” rating and $365 price target for ACN stock, which closed at $270.24 on Sept. 20.
Morgan Stanley (MS)
Morgan Stanley is one of the largest U.S. investment banks, offering a wide range of investment and wealth management services. Leon says Morgan Stanley has delivered impressive results in a challenging market in 2022, reporting consistent fee revenues and cash flows. He says elevated market volatility and investor activity are good news for trading volumes and fees. In addition, Leon says the challenged initial public offering underwriting market may start to improve along with the rest of the investment banking landscape in the second half of 2022. CFRA has a “buy” rating and $90 price target for MS stock, which closed at $87.19 on Sept. 20.
Comcast Corp. (CMCSA)
Comcast is a diversified media and entertainment company and the owner of TV, film and theme park assets. Analyst Keith Snyder says Comcast’s cable, NBCUniversal and Sky assets give the company geographical diversification. Comcast is pivoting its business more toward a broadband connectivity strategy, and Snyder says its nascent wireless offering has gained significant traction. Looking ahead, he expects Comcast to maintain a return on invested capital, or ROIC, in at least the high-single-digit percentage range. Snyder projects 4.7% revenue growth for Comcast in 2022. CFRA has a “buy” rating and $50 price target for CMCSA stock, which closed at $33.84 on Sept. 20.
10 of the best blue-chip stocks to buy for 2022:
— Apple Inc. (AAPL)
— Microsoft Corp. (MSFT)
— UnitedHealth Group Inc. (UNH)
— Visa Inc. (V)
— Mastercard Inc. (MA)
— Home Depot Inc. (HD)
— McDonald’s Corp. (MCD)
— Accenture PLC (ACN)
— Morgan Stanley (MS)
— Comcast Corp. (CMCSA)
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Update 09/21/22: This story was published at an earlier date and has been updated with new information.