Best Stocks to Buy in 2023, Including Meta Platforms: RBC

• RBC says its list of 30 favorite global stocks has steadily outperformed over the past 3 years.
• The firm thinks all 30 will return at least 13% in 2023 while benchmarks make minimal gains.
• RBC expects a return of almost 25% for Meta Platforms, which plunged 60% in 2022.

As it turns out, Wall Street prognosticators were much too optimistic at the beginning of 2022. A lot of leading firms predicted mid-single digit gains for US indexes, if not better; none came close to the almost 20% sell-off that ensued.

This year it doesn’t seem that excess positivity is going to be a problem. Predictions of a recession are widespread, and the upside for stocks seems lower because interest rates and bond yields are higher, making bonds more competitive as a potential investment. Inflation pressures seem to have eased, but they’re still higher than they were in years past.

“Our US Equity Strategy team’s analysis suggested a flattish or low single digit 12-month return in the S&P 500 and we expect choppy conditions over the next few quarters, between deeply bearish sentiment (a contrarian/bullish signal) and ongoing concerns about the outlook for the economy, the Fed, geopolitics, and earnings,” says a team of leading strategists for RBC.

The group is made up of Global Head of Research Graeme Pearson, Head of US Research Mark Odendahl, Head of Canadian & APAC Research André‐Philippe Hardy, and Head of European Research & Global Head of Research Product Management Michael Hall. They say that energy, financials, healthcare, technology and utilities should do best among US stocks.

Every quarter, the group updates its global list of 30 highly recommended stocks. This quarter, the collection includes greater weightings to tech, discretionary, and communications stocks and less exposure to energy, industrials, and utilities.

One interesting result of that update is that RBC now considers Meta Platforms a top idea. After a 60% sell-off in 2022, RBC says there’s reason to hope for a reset and some more optimism.

“Our channel checks suggest that Meta is improving its ad targeting and measurement, which we believe has the potential to restore its structural advantage and drive share gains in 2023 vs. other social and search players,” RBC says. “In addition, we see abating engagement share loss to TikTok driving a narrative shift leading to multiple expansion.”

In a rough year, RBC says its list of “Buy” rated stocks dipped 12.3%. Painful as that is, its benchmark, the MSCI World Net Total Return Index, suffered an even bigger loss of 18.4%.

Since the end of 2019, the firm adds that the top 30 list “has delivered a total return of +23.2%, above the benchmark at +15.6%.”

The 30 stocks are ranked here from lowest to highest based on the total return (share price and dividends) that RBC expects them to deliver in 2023. All numbers were calculated based on the stocks’ year-end closing prices.