The S&P 500 has performed well so far in 2023, gaining about 15% year to date. The better the S&P 500 performs, the more difficult it can be for investors to beat the market. Stocks with the most potential upside typically come with more risk. However, some investors may be looking to get aggressive and take advantage of the market’s positive momentum. The outlook for the S&P 500 is uncertain, but analysts see significant upside for some of their top-rated stocks.
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Here are 10 S&P 500 stocks to buy with the most potential upside based on Bank of America analyst price targets:
| Stocks | Price target | Implied upside (as of July 7 close) |
| Paramount Global (ticker: PARA) | $32 | 96.4% |
| General Motors Co. (GM) | $72 | 81.8% |
| Warner Bros. Discovery Inc. (WBD) | $21 | 67.5% |
| KeyCorp (KEY) | $15 | 56.4% |
| Hess Corp. (HES) | $205 | 52.5% |
| AT&T Inc. (T) | $25 | 60.2% |
| APA Corp. (APA) | $57 | 63.3% |
| Progressive Corp. (PGR) | $206 | 56.9% |
| SolarEdge Technologies Inc. (SEDG) | $396 | 52.9% |
| Newmont Corp. (NEM) | $55 | 30.2% |
Paramount Global (PARA)
Paramount Global is a global entertainment company formed from the 2019 merger of Viacom and CBS. The company owns Paramount Pictures TV and movie studios, TV networks such as CBS and Comedy Central, and streaming platforms Paramount+ and Pluto TV. Paramount shares are down around 47% since the beginning of 2022, but Bank of America analyst Jessica Reif Ehrlich says the company has a unique, valuable portfolio of assets that could make the company an attractive buyout target for a major media or tech player. Bank of America has a “buy” rating and $32 price target for PARA stock, which closed at $16.29 on July 7.
General Motors Co. (GM)
General Motors is one of the largest legacy U.S. car and truck producers. Analyst John Murphy says GM is a market leader among legacy automakers in transitioning its business to an electric and autonomous future. GM’s core internal combustion engine business helped generate net income of $2.4 billion in the first quarter. Unlike other electric vehicle startups struggling to fund growth by relying on expensive debt, Murphy says GM’s profitable core business is helping to fund its investments in EV and AV technology. Bank of America has a “buy” rating and $72 price target for GM stock, which closed at $39.61 on July 7.
Warner Bros. Discovery Inc. (WBD)
Warner Bros. Discovery is a global entertainment company formed by the 2022 merger of Discovery programming content with WarnerMedia’s entertainment, sports and news businesses. The stock opened at $24.08 on its first day of trading in April 2022 but has since lost nearly half its value. Ehrlich says Warner Bros. shares are attractively valued given the long-term potential the company has to monetize its content portfolio. In addition, an impressive slate of film releases in the second half of 2023 could be a bullish catalyst. Bank of America has a “buy” rating and $21 price target for WBD stock, which closed at $12.54 on July 7.
KeyCorp (KEY)
KeyCorp is a U.S. regional bank that provides consumer and commercial banking services, including real estate capital and investment banking, in the West, Midwest and Northeast regions. Regional bank stocks have struggled in 2023 after slumping bond prices contributed to a banking crisis and the failure of a handful of major banks. Analyst Ebrahim Poonawala says KeyCorp still faces risks associated with higher-than-expected interest rates and the potential for a U.S. recession, but the stock offers a compelling risk-reward profile at its current value. Bank of America has a “buy” rating and $15 price target for KEY stock, which closed at $9.59 on July 7.
Hess Corp. (HES)
Hess is a global crude oil and natural gas exploration and production company. Analyst Doug Leggate says Hess’ Guyana properties could be a game-changer and pave the way for a positive inflection in Hess’ free cash flow (FCF) and share price. Leggate projects Payara could add $1 billion in operating cash flow at Brent crude oil prices of $60 per barrel. He projects a 25% compound annual FCF growth rate in coming years, allowing Hess to eliminate its debt and significantly reduce its share count. Bank of America has a “buy” rating and $205 price target for HES stock, which closed at $134.41 on July 7.
[2023’s 10 Best-Performing Stocks]
AT&T Inc. (T)
AT&T is a diversified U.S. telecommunications and technology company. Last year, AT&T received $40.4 billion in cash as part of the spinoff of its TimeWarner assets to Warner Bros. Discovery. Analyst David Barden says AT&T management is confident it will achieve its 2023 guidance of $16 billion in FCF, which should reassure investors after AT&T’s first-quarter earnings miss triggered a sell-off in the stock. Barden says AT&T’s core business is growing and its fundamental valuation is attractive. Bank of America has a “buy” rating and $25 price target for T stock, which closed at $15.61 on July 7.
APA Corp. (APA)
Formerly known as Apache, APA is a major U.S. oil and gas exploration and production company. Leggate says APA is significantly leveraged to commodity prices and it has unique catalysts that could help the stock outperform its peers. First, he says improved contract terms in Egypt could help improve APA’s valuation. Second, Leggate says exploration success in Suriname is not yet priced into the stock. He projects $1.32 billion in 2023 FCF and expects earning growth will bounce back to 32.1% in 2024. Bank of America has a “buy” rating and $57 price target for APA stock, which closed at $34.91 on July 7.
Progressive Corp. (PGR)
Progressive is one of the largest U.S. auto insurance companies, including motorcycle insurance and commercial auto insurance. Analyst Joshua Shanker says Progressive is positioned to deliver both premium growth and margin expansion in coming years. Shanker says Progressive’s stock price suggests investors don’t fully appreciate the company’s earnings potential. In fact, he projects earnings-per-share growth of 30.4% in 2023, 72.2% in 2024 and 33.9% in 2025. Progressive has also increased loss reserves by $1 billion in just three years. Bank of America has a “buy” rating and $206 price target for PGR stock, which closed at $131.26 on July 7.
SolarEdge Technologies Inc. (SEDG)
SolarEdge Technologies produces direct-current optimized inverter systems for the residential solar industry. Analyst Julien Dumoulin-Smith says SolarEdge is exposed to attractive markets and has a diversified business that positions the company to achieve at least the high end of its revenue and gross margin guidance for the second quarter. In addition, Dumoulin-Smith projects margin expansion will continue in the second half of the year as the company continues to generate impressive, sustainable growth. Solar energy storage could also be a significant growth opportunity for SolarEdge. Bank of America has a “buy” rating and $396 price target for SEDG stock, which closed at $258.94 on July 7.
Newmont Corp. (NEM)
Newmont is the world’s largest gold producer, and the price of gold is up 5.9% in 2023. Unfortunately, Newmont shares haven’t kept pace with rising gold prices and are actually down 33% year to date. Analyst Lawson Winder says Newmont’s recently announced acquisition of Newcrest Mining Ltd. (NCM) will enhance the overall quality and depth of Newmont’s asset portfolio. Winder says investors should expect robust free cash flow from Newmont in the current environment of elevated gold prices, and he has a long-term gold price target of $2,036. Bank of America has a “buy” rating and $55 price target for NEM stock, which closed at $42.24 on July 7.
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10 S&P 500 Stocks to Buy With the Most Upside originally appeared on usnews.com
Update 07/10/23: This story was previously published at an earlier date and has been updated with new information.
