Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

2 Sectors, 2 Top Stocks for 2018: Apple Inc. (AAPL), Facebook Inc (FB)

Here are the Street's favorite "Strong Buy" stocks per sector for 2018.

Each sector has a number of top stock picks waiting for the savvy investor to find. These are the top sector stocks that the best analysts on Wall Street are bullish on, and they all have serious upside potential to boot.

Here I focus on stocks that look set to outperform both in the next couple of months and through into the new year as well.

Using TipRanks’ powerful stock screener, I set out to find the best stock in each sector that presents a compelling opportunity for investors in 2018. I filtered by sector and for stocks with only a “strong buy” analyst consensus rating. To get the best results, I selected ratings from analysts with a high success rate and average return per recommendation.

Now let’s delve into the top picks for the tech and consumer goods sectors:

Top Sector Stocks — Tech: Facebook

If you track one tech stock into 2018, make it Facebook Inc (NASDAQ:FB). This “strong buy” stock has received 30 buy ratings from analysts over the last three months — vs just one hold and one sell rating. And the best part is that these analysts say FB can soar by almost 18% over the next twelve months.

Top RBC Capital analyst Mark Mahaney says FB is the “best growth story in tech.” And in light of the stock’s impressive earnings results for Q3, he has ramped up his price target to $230 from $195. This new price target is FB’s highest yet. Plus is comes in at 28% above the current share price. “FB reported a very strong Q3, with results coming in well ahead of expectations and growth trends remaining very impressive” comments Mahaney on November 2.

He also sees plenty of room for expansion: “We believe that FB’s current low market shares — less than 20% of Global Online Advertising & mid-single-digit % of Global Total Advertising — will help it maintain premium growth for a long time. And FB still has several new large revenue growth drivers (Instagram monetization, Messaging Platform monetization, Camera/AR, AI AND Video).”

Note that Mahaney has a strong track record on his FB recommendations. According to TipRanks he has a 97% success rate and 29% average return across 29 FB ratings.

 Top Sector Stocks- Consumer Goods: Apple

iPhone giant Apple Inc. (NASDAQ:AAPL) is still a prime stock to track into 2018. With a “strong buy” consensus rating, analysts have published 24 buy ratings and 5 hold ratings on AAPL over the last three months. These analysts say Apple can move higher by over 8.5% in the next 12 months.

Some top analysts are much more bullish. One of these is five-star analyst Brian White from Drexel Hamilton. He has just published the stock’s highest price target yet of $235 — a whopping 35% upside from the current share price. He explains: “With a strong start to the iPhone X, an excellent 4Q:FY17 report, and trading just over 12x our CY:18 EPS estimate (ex-cash), we believe Apple has attractive upside over the next 12 months.”

Encouragingly for investors, Apple’s post-earnings call “was the most upbeat that we have heard in quite some time” says White. Better-than-expected results include 4Q:FY17 sales of $52.6 billion (up 12% YoY) and pro forma EPS of $2.07. This easily beat the Street EPS estimate of just $1.87. He attributes this to “the momentum of this iPhone cycle, combined with the positive trends across the company’s non-iPhone portfolio. [And] after falling for six consecutive quarters, Greater China revenue returned to growth (up 12% YoY) in 4Q:FY17.”