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After a dazzling 2021, Apple and Tesla stocks are expected to be duds in 2022

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A report from Goldman Sachs shows how much of investors’ money is concentrated in only five high-flying stocks. And a screen of the biggest contributors to this year’s excellent performance for the S&P 500 index highlights two that are expected not to perform well in 2022: Apple and Tesla.

Just five stocks — Microsoft Corp. MSFT, Alphabet Inc. GOOGL, Apple Inc. AAPL, Nvidia Corp. NVDA and Tesla Inc. TSLA — contributed over a third of the S&P 500 Index’s SPX 26% total return for 2021 through Dec. 9, according to analysts at Goldman. And from the end of April through Dec. 9, they contributed 51% of the index’s 13% return.

Moreover, only 25 stocks accounted for 58% of the index’s gains, including reinvested dividends, through Dec. 9, Goldman said. Its list of those stocks is below, along with screens of Wall Street analysts’ expectations for the group as we look ahead to 2022 and 2023.

The analysts, led by David Kostin, pointed out that “market breadth has narrowed substantially” over the past several months. In other words, investors have concentrated more of their money (and risk) in the largest tech companies, by market capitalization.

That said, the Goldman analysts continue to recommend that long-term investors “own high-growth, high-margin stocks.”

Digging into the 25 biggest contributors to the S&P 500’s returns this year

This list shows each of the 25 stocks and their “contributions” to the gains, expressed in basis points. (A basis point is one 100th of a percent. ) The table also includes pricing information — closing prices as of Dec. 14 with declines from 52-week highs and the dates of those highs.

Company
Ticker
Total return – 2021 through Dec. 9
Contribution to S&P 500’s return for 2021 through Dec. 9 (basis points)
Closing Price – 12/14/21
Decline from 52-week high
Date of 52-week high
Microsoft Corp.
MSFT
51%
271
$328.34
-6.1%
11/22/2021
Alphabet Inc. Class A
GOOGL
68%
224
$2,878.14
-4.7%
11/19/2021
Apple Inc.
AAPL
32%
217
$174.33
-4.3%
12/13/2021
Nvidia Corp.
NVDA
134%
137
$283.37
-18.2%
11/22/2021
Tesla Inc.
TSLA
42%
71
$958.51
-22.9%
11/04/2021
Home Depot Inc.
HD
58%
52
$402.20
-4.4%
12/06/2021
Meta Platforms Inc. Class A
FB
21%
43
$333.74
-13.2%
09/01/2021
UnitedHealth Group Inc.
UNH
37%
39
$479.46
-0.7%
12/14/2021
Bank of America Corp
BAC
50%
36
$44.13
-9.4%
11/03/2021
JPMorgan Chase & Co.
JPM
29%
36
$159.13
-8.0%
10/25/2021
Exxon Mobil Corp.
XOM
61%
34
$61.54
-7.3%
11/08/2021
Berkshire Hathaway Inc. Class B
BRK
23%
32
$295.03
-0.5%
12/14/2021
Amazon.com Inc.
AMZN
7%
31
$3,381.83
-10.4%
07/13/2021
Pfizer Inc.
PFE
47%
30
$55.54
-0.7%
12/14/2021
Wells Fargo & Co.
WFC
67%
26
$48.89
-7.0%
11/03/2021
Chevron Corp.
CVX
47%
24
$116.22
-2.5%
12/08/2021
Intuit Inc.
INTU
76%
24
$639.48
-10.8%
11/19/2021
Lowe’s Companies Inc.
LOW
63%
23
$252.46
-4.1%
12/13/2021
Accenture Plc Class A
ACN
44%
23
$369.73
-3.0%
12/13/2021
Thermo Fisher Scientific Inc.
TMO
37%
22
$632.11
-5.2%
11/26/2021
Costco Wholesale Corp.
COST
40%
21
$545.34
-2.8%
12/10/2021
Broadcom Inc.
AVGO
36%
20
$614.91
-4.6%
12/10/2021
Adobe Inc.
ADBE
26%
20
$614.86
-12.1%
11/22/2021
Danaher Corp.
DHR
44%
20
$307.70
-7.9%
09/10/2021
Eli Lilly and Co.
LLY
46%
19
$249.38
-9.6%
08/17/2021
Sources: Goldman Sachs, FactSet

We included the declines from 52-week highs through Dec. 14 to illustrate how volatile the stocks of rapidly growing tech giants can be. Shares of Nvidia, for example, were down 18% from the high reached Nov. 22. Tesla has tumbled into bear-market territory three times in 2021 and is down 23% from its high reached Nov. 4.

You can click the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

Screening the 25 stocks: sales, earnings and ratings

Leaving the list in the same order, here are consensus estimates among analysts polled by FactSet for sales (in millions of dollars) for calendar years through 2023, with projected compound annual growth rates (CAGR):

Company
Ticker
Estimated revenue – 2021
Estimated revenue – 2022
Estimated revenue – 2023
Two-year estimated sales CAGR
Microsoft Corp.
MSFT
$182,593
$210,753
$240,396
14.7%
Alphabet Inc. Class A
GOOGL
$254,060
$296,677
$341,671
16.0%
Apple Inc.
AAPL
$369,729
$389,037
$413,789
5.8%
Nvidia Corp.
NVDA
$25,754
$31,175
$36,380
18.9%
Tesla Inc.
TSLA
$51,678
$73,183
$89,639
31.7%
Home Depot Inc.
HD
$148,615
$153,285
$158,252
3.2%
Meta Platforms Inc. Class A
FB
$117,569
$139,805
$164,737
18.4%
UnitedHealth Group Inc.
UNH
$286,410
$316,412
$342,740
9.4%
Bank of America Corp
BAC
$89,268
$93,591
$99,180
5.4%
JPMorgan Chase & Co.
JPM
$123,128
$123,405
$130,270
2.9%
Exxon Mobil Corp.
XOM
$294,130
$308,304
$292,830
-0.2%
Berkshire Hathaway Inc. Class B
BRK
$294,667
$294,894
$309,287
2.5%
Amazon.com Inc.
AMZN
$470,607
$553,097
$649,246
17.5%
Pfizer Inc.
PFE
$81,333
$92,070
$72,748
-5.4%
Wells Fargo & Co.
WFC
$76,024
$72,048
$75,462
-0.4%
Chevron Corp.
CVX
$155,748
$168,114
$159,898
1.3%
Intuit Inc.
INTU
$10,714
$12,980
$14,881
17.9%
Lowe’s Companies Inc.
LOW
$95,152
$97,459
$100,080
2.6%
Accenture Plc Class A
ACN
$52,819
$58,906
$63,622
9.8%
Thermo Fisher Scientific Inc.
TMO
$37,210
$39,493
$42,053
6.3%
Costco Wholesale Corp.
COST
$203,027
$222,877
$238,794
8.5%
Broadcom Inc.
AVGO
$27,976
$30,877
$32,521
7.8%
Adobe Inc.
ADBE
$15,957
$18,393
$21,000
14.7%
Danaher Corp.
DHR
$29,116
$30,792
$32,437
5.5%
Eli Lilly and Co.
LLY
$27,601
$27,774
$30,366
4.9%
Source: FactSet

Here’s another look ahead, this time at earnings-per-share estimates

Company
Ticker
Estimated EPS – 2021
Estimated EPS – 2022
Estimated EPS – 2023
Two-year estimated EPS CAGR
Microsoft Corp.
MSFT
$8.60
$9.85
$11.44
15.3%
Alphabet Inc. Class A
GOOGL
$108.65
$113.97
$130.48
9.6%
Apple Inc.
AAPL
$5.64
$5.85
$6.27
5.4%
Nvidia Corp.
NVDA
$4.18
$5.08
$6.15
21.3%
Tesla Inc.
TSLA
$5.99
$8.64
$11.46
38.3%
Home Depot Inc.
HD
$15.17
$16.13
$17.30
6.8%
Meta Platforms Inc. Class A
FB
$13.94
$14.24
$16.94
10.3%
UnitedHealth Group Inc.
UNH
$18.84
$21.63
$24.58
14.2%
Bank of America Corp
BAC
$3.52
$3.19
$3.63
1.5%
JPMorgan Chase & Co.
JPM
$14.98
$12.03
$13.23
-6.0%
Exxon Mobil Corp.
XOM
$5.03
$5.79
$5.59
5.4%
Berkshire Hathaway Inc. Class B
BRK
$11.65
$12.63
$14.13
10.1%
Amazon.com Inc.
AMZN
$41.31
$51.54
$76.68
36.2%
Pfizer Inc.
PFE
$4.19
$5.75
$4.87
7.8%
Wells Fargo & Co.
WFC
$4.63
$3.72
$4.41
-2.4%
Chevron Corp.
CVX
$8.36
$9.42
$8.78
2.5%
Intuit Inc.
INTU
$10.56
$12.51
$14.70
18.0%
Lowe’s Companies Inc.
LOW
$11.71
$12.86
$14.40
10.9%
Accenture Plc Class A
ACN
$9.25
$10.48
$11.59
11.9%
Thermo Fisher Scientific Inc.
TMO
$23.45
$21.17
$23.34
-0.2%
Costco Wholesale Corp.
COST
$11.63
$13.06
$14.33
11.0%
Broadcom Inc.
AVGO
$28.83
$33.53
$36.69
12.8%
Adobe Inc.
ADBE
$12.63
$14.47
$16.88
15.6%
Danaher Corp.
DHR
$9.82
$10.16
$10.72
4.5%
Eli Lilly and Co.
LLY
$8.02
$8.13
$9.71
10.1%
Source: FactSet

Here’s a summary of Wall Street analysts’ opinions about the stocks:

Company
Ticker
Share “buy” ratings
Share neutral ratings
Share “sell” ratings
Closing price – 12/14/21
Consensus price target
Implied 12-month upside potential
Microsoft Corp.
MSFT
90%
10%
0%
$328.34
$366.41
12%
Alphabet Inc. Class A
GOOGL
94%
6%
0%
$2,878.14
$3,333.70
16%
Apple Inc.
AAPL
79%
19%
2%
$174.33
$174.35
0%
Nvidia Corp.
NVDA
81%
12%
7%
$283.37
$341.51
21%
Tesla Inc.
TSLA
43%
30%
28%
$958.51
$860.35
-10%
Home Depot Inc.
HD
65%
32%
3%
$402.20
$417.16
4%
Meta Platforms Inc. Class A
FB
76%
22%
2%
$333.74
$398.32
19%
UnitedHealth Group Inc.
UNH
85%
11%
4%
$479.46
$490.88
2%
Bank of America Corp
BAC
64%
25%
11%
$44.13
$49.83
13%
JPMorgan Chase & Co.
JPM
61%
32%
7%
$159.13
$179.70
13%
Exxon Mobil Corp.
XOM
39%
51%
10%
$61.54
$72.97
19%
Berkshire Hathaway Inc. Class B
BRK
43%
57%
0%
$295.03
$332.50
13%
Amazon.com Inc.
AMZN
94%
6%
0%
$3,381.83
$4,102.98
21%
Pfizer Inc.
PFE
38%
58%
4%
$55.54
$53.67
-3%
Wells Fargo & Co.
WFC
67%
33%
0%
$48.89
$54.90
12%
Chevron Corp.
CVX
68%
32%
0%
$116.22
$130.36
12%
Intuit Inc.
INTU
83%
13%
4%
$639.48
$756.29
18%
Lowe’s Companies Inc.
LOW
73%
24%
3%
$252.46
$272.43
8%
Accenture Plc Class A
ACN
70%
26%
4%
$369.73
$383.68
4%
Thermo Fisher Scientific Inc.
TMO
83%
13%
4%
$632.11
$682.47
8%
Costco Wholesale Corp.
COST
59%
35%
6%
$545.34
$551.75
1%
Broadcom Inc.
AVGO
84%
13%
3%
$614.91
$682.70
11%
Adobe Inc.
ADBE
81%
19%
0%
$614.86
$720.69
17%
Danaher Corp.
DHR
82%
14%
4%
$307.70
$350.29
14%
Eli Lilly and Co.
LLY
67%
28%
5%
$249.38
$279.72
12%
Source: FactSet

Here are six data highlights to consider:

Two of this year’s best performers are expected to be poor performers next year, based on the price targets: Apple and Tesla.
Apple is expected to show much slower sales and earnings growth than the rest of the top five companies on the list through 2023.
Tesla’s expected two-year sales CAGR of 31.7% is by far the highest on the list. But only 43% of analysts polled by FactSet rate the stock a “buy.”
Tesla also has the highest expected EPS CAGR through 2023 at 38.3%, but Amazon.com Inc. AMZN is right behind, with a projected EPS CAGR of 36.2%. Next on the list by this measure is Nvidia, at 21.3%.
From the price targets, Nvidia and Amazon are Wall Street analysts’ favorite stocks on the list, with implied 12-month upside of 21%.
Pfizer Inc.’s PFE sales are expected to rise in 2022 but fall in 2023 to a level below that of 2021, according to analysts polled by FactSet. That could reflect expectations that the coronavirus pandemic will be ending.

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