JPMorgan’s top picks for 2023, including two stocks coming off their worst performances in decades

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JPMorgan is warning there could be further downward pressure on the market in 2023 before a recovery is felt. But the firm says there are still stocks to invest in. The firm expects the S & P 500 to re-test lows seen in 2022 as the Federal Reserve “overtightens” while trying to cool inflation. But JPMorgan analysts said that sell-off, paired with other indicators of a contracting economy, could push the central bank to start pivoting, in turn starting a recovery that may bring the S & P 500 to 4,200 points by the end of 2023. That’s nearly 10% higher than where the broad index closed Tuesday. “2022 was a year of macro and geopolitical shocks with sharply higher global rates and USD, stubbornly high inflation, China headwinds, and the largest conflict in Europe since WWII,” analysts said in a note to clients. “Investors responded to these events by derating S & P 500 P/E as much as 7x while some speculative growth segments have crashed 70-80% from highs. Although fundamentals have been resilient throughout these shocks, we do not expect this year’s constructive growth backdrop to persist in 2023.” JPMorgan put together a list of stocks it recommends in the challenging investing landscape. Here are 10 names that made the list: Amazon lost nearly 50% in 2022, making it the biggest one-year loss for the stock since 2000 . The sell-off came as investors rotated out of growth and into value as rising interest rates elevated concerns of a recession. As a company, Amazon was hit with a slowdown in sales with consumers shifting spending to services or pulling back entirely due to inflationary pressures. Yet JPMorgan analysts believe revenue growth can re-accelerate due to higher stock levels and faster delivery speed. Analysts also pointed to the possibility of continued penetration within groceries and the cloud that could give the company an additional boost. The firm has a $130 price target, implying the stock will gain 51.5% from Tuesday’s close. Target also made the list, even as market observers grow increasingly wary of retail stocks amid economic contraction. The company turned to promotions this year to move gluts of unwanted inventory while trying to contend with the same shifting consumer spending habits that hurt Amazon. The stock dropped more than 35% in 2022 for its worst year in decades. JPMorgan set a price target of $201, which shows a potential upside of 32.5% over Tuesday’s close. Disney ‘s stock tumbled nearly 44% in 2022, a dramatic year for the entertainment giant punctuated by the replacement of CEO Bob Chapek with his predecessor, Bob Iger . JPMorgan set a price target of $84.17, which implies the stock should gain 51.7% in the next 12 months. JPMorgan is bullish on the growth stock, calling Disney its “favorite Media name long term.” The firm says it expects a more “realistic” Disney+ subscriber target for 2024 and believes direct-to-consumer losses could halve by the fiscal third quarter. It also said Disney could accelerate buying Comcast’s stake in Hulu to provide more flexibility within its streaming business. Las Vegas Sands is expected to post a second year of gains in 2023 after getting beat down during the first two years of the pandemic. JPMorgan’s $55 price target reflects an 11.5% upside. The stock gained nearly 28% in 2022. JPMorgan said the stock should rise as China moves closer to a full reopening given the company’s operations in Macao. The Chinese government said it would remove quarantine requirements for inbound travelers starting Jan. 8 .