Shopping for stocks when markets are under increasing pressure might feel wrong, but don't forget that the idea is to buy low. Although valuations remain stretched, they are indeed more attractive these days, industry analysts say.
And besides, there are always select names set to outperform.
Although the Magnificent 7 stocks have done much of the bull market's heavy lifting, that hardly means these names are doomed to underperform from here. Indeed, as we'll see below, four of Wall Street's top-rated stocks to buy hail from the Magnificent 7. After all, if bulls liked these stocks at higher prices, they should love them now that they've cooled off. Companies from the health care, energy and industrials sectors are ably represented too.
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Here's how we found the top S&P 500 stocks to buy now. It's well known that industry analysts are reluctant to slap Sell ratings on the names they cover. There are a bunch of reasons for this, some more defensible than others. What's less commonly understood is that Strong Buy recommendations, while not nearly as rare as Sell calls, are in somewhat short supply too.
If you run a screen of the S&P 500 using data from S&P Global Market Intelligence, you'll see that analysts assign a consensus recommendation of Sell to a total of one stock. At the other end of the ratings spectrum stands the Street's highest recommendation of Strong Buy. A total of 17 stocks made the cut there, up from 14 a month ago, thanks partly to the down market making valuations more attractive.
But first a note on our methodology: S&P Global Market Intelligence surveys analysts' stock recommendations and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell. Any score of 2.5 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call.
In other words, lower scores are better than higher scores.
Have a look at the chart below to see the 17 stocks in the S&P 500 that score an elite Strong Buy recommendation from industry analysts. Investors who fear it's too late to buy Amazon.com (AMZN), Microsoft (MSFT) or Nvidia (NVDA) will be happy to see they easily made the list.
Company (ticker) | Analysts' consensus recommendation score | Analysts' consensus recommendation |
|---|---|---|
Erie Indemnity (ERIE) | 1.00 | Strong Buy |
UnitedHealth Group (UNH) | 1.25 | Strong Buy |
Synopsys (SNPS) | 1.33 | Strong Buy |
Nvidia (NVDA) | 1.34 | Strong Buy |
Delta Air Lines (DAL) | 1.35 | Strong Buy |
Amazon.com (AMZN) | 1.36 | Strong Buy |
Microsoft (MSFT) | 1.39 | Strong Buy |
DexCom (DXCM) | 1.42 | Strong Buy |
S&P Global (SPGI) | 1.42 | Strong Buy |
Wynn Resorts (WYNN) | 1.42 | Strong Buy |
Broadcom (AVGO) | 1.43 | Strong Buy |
Micron Technology (MU) | 1.46 | Strong Buy |
Meta Platforms (META) | 1.49 | Strong Buy |
Boston Scientific (BSX) | 1.50 | Strong Buy |
GE Aerospace (GE) | 1.50 | Strong Buy |
United Airlines (UAL) | 1.50 | Strong Buy |
West Pharmaceutical Services (WST) | 1.50 | Strong Buy |
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