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With December approaching, and 2022 on the horizon, here are some stock ideas to think about in the new year.

2022 stocks

Barclays picks out 2022’s potential big earners

Earnings season has come and gone. According to the latest data from FactSet, it’s been another successful quarter for Wall Street with the latest Q3 earnings report from S&P500 firms showing high growth.

FactSet reports that 82% of reporting S&P500 firms recorded per-share earnings growth above the mean EPS estimate.

Tesla, for example, had a robust third quarter with revenues and vehicle deliveries breaking records. That was just one of many megacaps reporting better-than-expected EPS performance in the third quarter.

Another includes Google parent Alphabet. The tech firm’s latest financials showed an earnings-per-share beat of $27.99 against $23.48 per share forecast.

However, many companies may run into difficulty next year. Earnings growth may be more modest. Recovery in major economies is not expected to match the rates we’ve seen so far this year. A fair few megacaps warned of slowing numbers, such as Disney and Netflix subscribers, in their Q4 guidance.

Wages have also been rising. In the US, for example, wage growth is up 4.9% year-on-year. That may put pressure on margins going forward too.

That said not all businesses are equal. Barclays’ investment division has eyeballed several overweight stocks that could deliver earnings growth in 2022. The banks has scoured the markets to find 35 equities worth looking at as reported by CNBC.

According to Barclays, the selected stocks may offer a 10% upside over their current target prices.

Of those 35, we’ve boiled then down into a further five.

2022 stocks to watch

These equities are drawn from a number of sectors, but the most common are energy, financials, information technology and consumer discretionary.

Halliburton and Schlumberger are two major energy stocks Barclays identifies as having high upsides over the next calendar year. Both are major players within the oilfield services industries and could be poised to make solid gains upon a wider crude oil recovery.

It should be pointed out, however, that COVID is still weighing heavily on the crude oil industry. The pandemic is far from over and rising global COVID cases are putting pressure on oil prices. Demand may take longer than expected to reach pre-pandemic levels.

In terms of price targets, Barclays is optimistic. Schlumberger has been set a $48 price target. At the time of writing, the stock was trading for around $31.25. For Halliburton, the target is $36 with it trading at $23.29 at the time of writing.

Ally Financial may have the biggest potential upside, representing the chief financial stock to watch for in 2022, at least according to Barclays. Upsides maybe as high as 36% for Ally in 2022. Barclays has set a $68 price target. At the time of writing, Ally was trading at around $51.05.

Moving away from financials, Barclays analysts have selected Dick’s Sporting Goods as its 2022 consumer discretionary stock of choice. The stock is already up 130% this year, driven by better-than-expected quarterly financial results.

The stock is down 5% in trading as of Thursday 25th November at around $127.49 – but Barclays believes it may reach as high as $173 across the next twelve months.

While Dick’s 130% year-on-year growth is impressive, it has been positively dwarfed by online personal loan providers Upstart. Upstart by name, upstart by nature it seems. The stock has skyrocketed an incredible 400% y-o-y in 2021.

It may still have plenty of room to grow. Barclays posits 44% share price growth across 2022 with a target price of $285 for Upstart. It is currently trading at $208.21.

Of course, it goes without saying that investing or trading any of the aforementioned stocks holds substantial risk of capital loss. Always do your research prior to committing any capital. Only trade or invest if you are comfortable with any potential losses.

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