3 Stocks with Big Expectations in 2022

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This story originally appeared on MarketBeat

Time flies when you’re having fun. For many stock investors 2021 has been another year to remember with the major indices up yet again.

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It’s hard to believe we are a week away from entering the fourth quarter. Time to start getting ready for the holiday season. For investors it’s also time to start thinking about tax loss harvesting and getting the portfolio spruced up for the new year.

Among the things to be thankful for this time of year are family, friends, health—and earnings outlooks. While consensus earnings estimates may rank lower on the list, if you’re an investor interested in where companies are headed in 2022, analysts’ forecasts are one of the best guides we have.

Here are three stocks that the Street has high hopes for in the coming year.

Is Hilton Worldwide Holdings Still a Good Reopening Play?

Hilton Worldwide Holdings (NYSE: HLT) has rebounded nicely this year after barely eking out a profit in 2020. Loosened COVID-19 restrictions and vaccination progress have revived the hospitality industry and with it Hilton’s financial results. After posting EPS of $0.58 in the first half of 2021, analysts are expecting profitability to accelerate in the second half as pent-up demand for leisure travel continues to unfurl.

As one of the world’s leading hotel operators, Hilton offers a range of hotel brands that cater to the budget-conscious, the luxury seekers and everyone in between. This allows it to capture a large chunk of consumer and corporate spending on vacations, business conferences, and other group events.

In 2022, the Street is forecasting that Hilton will generate EPS of $4.21. This represents 91% bottom-line growth compared to the estimate for this year. This bullish outlook hinges greatly on vaccine rollouts and progress in the fight against COVID-19. Simply put, higher demand for Hilton’s nearly 900,000 rooms translates to higher earnings.

Of course, a slowdown on the pandemic front would be devastating for a hotel industry that has finally gained traction in 2021. But with virtually all of its properties reopened, Hilton is in a strong position to see the ‘no vacancy’ signs and its earnings go up in 2022.

What is General Electric’s 2022 Earnings Forecast?

A rebound in industrial activity has General Electric (NYSE: GE) on the comeback trail. The S&P 500 mainstay is reaping the benefits of conservative fiscal management during the pandemic and increasing demand from its diverse end markets.

Following an unusual 1-for-8 reverse stock split last month, the stock is trading around $100 for the first time since the dot com bubble. While investors shouldn’t be fooled by the recent share price shenanigans that make the stock look more robust, they should pay attention to where GE is headed.

Earnings are forecast to more than double to $4.22 next year based on the opinions of 16 Wall Street analysts. Much of the growth is expected to come from the Renewable Energy business which will likely continue to see strong order flow for wind turbines as the world advances its green energy plans. The recovery in air travel also has the Aviation business humming again. And even the battered Power segment is expected to build off a solid 2021.

Much work remains for GE’s new management team, but it has made progress with its turnaround plan and has the wind at its back heading into 2022. Broad-based growth and a healthier balance have analysts re-energized about the company’s earnings prospects in 2022. This along with the steady dividend make GE a solid investment for a long-term growth and income portfolio.

Is Pioneer Natural Resources a Good E&P Pure Play?

Pioneer Natural Resources (NYSE: PXD) stock has tripled off its March 2020 bottom but appears to have a return to the $200 level in its plans. Amid a sharp rebound in commodity prices, the Dallas-based oil and gas producer has returned to profitability in a big way. This year’s EPS is forecast to come in at $12.35, more than sevens times the amount recorded in 2020.

As a leading player in the resource-rich Permian Basin, Pioneer Natural Resources is one of the lower cost producers in the region. So, with production rates expected to ramp higher in 2022 and crude and natural gas pricing expected to remain elevated, profits are expected to take another big leap. The current sell-side consensus for next year’s EPS implies 50% growth off a good base.

Aside from the more favorable energy environment, Pioneer has another growth catalyst up its sleeve. Its $7.6 billion acquisition of Parsley Energy will give a greater presence in the Delaware Basin portion of the Permian region and more diversified revenue streams. The company took on $3.1 billion in debt to acquire Parsley but has the balance sheet strength to handle the added debt load.

When comes to large-cap pure plays in the exploration and production space, it doesn’t get any better than Pioneer Natural Resources. It’s low breakeven rate, industry-leading balance sheet, and diversified business model make it a slick way to invest in the energy sector rally. The 8x P/E ratio for 2022 and rising dividend aren’t too shabby either.

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