Barclays says buy these stocks with earnings upside for 2022

Published Wed, Nov 24 202111:24 AM EST

Barclays has highlighted several stocks poised for big earnings growth next year. Company earnings have been strong. Indeed, about 95% of the companies in the S & P 500 have reported earnings for the third quarter, according to the latest data from FactSet, with 82% reporting actual per-share earnings above the mean EPS estimate. In 2022, however, earnings growth could be more modest since companies will be going up against a strong year rather than the pandemic lows many had in 2020. Plus, it remains to be seen how sales growth slows after the fourth quarter and how rising wages could pressure margins. Barclays chose 35 overweight-rated stocks whose 2022 earnings estimates have been revised higher and for which the bank sees further upside. All of them have at least 10% upside to their price targets. Most of them fall into the energy, financials, information technology and consumer discretionary sectors. Here are 10 of them: Sarepta Therapeutics is the only stock representing the health care sector. Nutrien and Digital Realty Trust represent one of the few stocks in the materials and real estate sectors, respectively. Dick's Sporting Goods is one of the big consumer names on the list with a price target of $173. The stock closed at $134.55 on Tuesday. The retailer reported a stronger-than-expected quarter this week and hiked its annual forecast. The stock has risen almost 130% this year. Among financials, Ally has the biggest potential upside according to Barclays. Its price target on the stock is $68, about 36% from where the stock closed Tuesday. The Federal Reserve is expected to begin lifting interest rates next year, which tend to benefit banks by widening their spread, allowing for higher margins and profits. The online personal loan company Upstart is also one to watch for Barclays, which has a price target on Upstart of $285, which is about 44% from where it closed on Tuesday. The stock has soared this year, about 400%. Earning prospects for energy companies are also expected to improve next year as the economy continues its reopening and return to "normal," which should help push demand for oil back to pre-pandemic levels. Halliburton and Schlumberger are two of Barclays' picks. The firm has a positive outlook on both of them, while it maintains a neutral outlook on some of the other energy names. The bank set a price target of $36 on Halliburton, which closed at $22.97 on Tuesday. It also anticipates Schlumberger will rise to $48 a share; the company ended Tuesday's session at $31.18.

Signage outside a Dick's Sporting Goods store in Clarksville, Indiana, Nov. 9, 2020.

Luke Sharrett | Bloomberg | Getty Images

Barclays has highlighted several stocks poised for big earnings growth next year.