S&P 500's best performers are on track for gains of 50% or more this quarter

Published Thu, Dec 29 202212:05 PM ESTUpdated Thu, Dec 29 20222:03 PM EST

It has been a strong fourth quarter for the S & P 500 — and its leading stocks are poised for even larger gains. The S & P 500 is on pace to end the quarter up 6.2%, through Thursday's market open. That's sandwiched between the other two major averages, with the Dow Jones Industrial Average on track to gain 15% and the technology-heavy Nasdaq Composite set to lose 2.5%. As a result, the benchmark S & P 500 index will see its first quarterly advance this year, limiting the full-year loss to a little less than 20%. The quarter has proven a welcome respite from what will still end up as the largest annual decline for stocks since the global financial crisis of 2008. More than a fifth of all S & P 500 stocks climbed 20% or more in the last three months of the year as inflation cooled, the Federal Reserve slowed its campaign of higher interest rates and the job market stayed strong. CNBC Pro looked at the 10 best-performing stocks in the index this quarter, using data from FactSet through Wednesday's close. Universal Health Services led the way, adding 58.1% in the fourth quarter. While the wider market has had a dismal December, the health-care stock has seen a 6.5% rally this month that lifted it to a year-to-date advance of 7.5% in 2022. Hedgeye analyst Tom Tobin recently named UHS a long idea with a potential upside of as much as 40%, according to StreetAccount. Other analysts are less optimistic after the big run, with just 28% rating it buy or overweight, 50% a hold and 22% underweight or sell, FactSet data shows. The average analyst expects its price to drop almost 8% in the next 12 months. Boeing is close behind, soaring 55.6% this quarter. The jet maker and defense contractor had awaited a congressional extension requiring a new safety standard in 737 Max cockpits , which it received in December. The company's shares have slipped 6.4% this year. Boeing is favored on Wall Street. Nearly four out of every five analysts rate the company overweight or buy. The average analyst has a price target that implies an upside of 5.5%. "Global air travel has largely recovered, airlines are placing orders for new planes at a near-record pace, the MAX and 787 are delivering and production rates are ramping, and China is de-risked from the MAX skyline," said Goldman Sachs analyst Noah Poponak in a Dec. 14 note to clients. He called Boeing a top aerospace pick for 2023. Caterpillar is higher by about 46% in the fourth quarter, turning what had been a year-to-date decline into a 15.8% gain. The construction equipment maker popped in late October after third-quarter sales and earnings topped analyst estimates. About two out of every five analysts covering Caterpillar rate the stock overweight or buy. But the average analyst expects the price to be little changed over the coming year. — CNBC's Gina Francolla contributed to this report.