Investors love stocks that can produce big gains. They especially like it when those stocks are among the leaders of their industries, and the Dow Jones Industrial Average (^DJI -0.16%) includes the stocks of 30 of the finest companies in the world. Many investors see the Dow 30 as among the most secure and reliable stocks in the market.
After a strong 2020, some worry that the stock market might have come too far too quickly. For them, safer plays like blue-chip Dow stocks seem like a safer bet. Yet even within the Dow, you can still find companies that sport the kind of growth prospects that will support rising share prices. In fact, if the most bullish analysts on Wall Street are right about them, the following three stocks could see their share prices post gains of 40% or more in the near future.
Aerospace giant Boeing (BA 0.54%) is the archetypical value play for those seeking down-and-out stocks at a relative bargain. Hit with the one-two punch of having multiple accidents with its new 737 MAX aircraft model and then having air traffic slow to a near-halt during the COVID-19 pandemic, Boeing shares plunged almost 80% between their highs in early 2019 and their worst levels last March.
Yet Boeing has more than doubled from its lows, and some Wall Street analysts are highly bullish on the stock. While the average share price target of $230 is only about 7% higher than its most recent close, analysts at Baird upgraded the stock last November from neutral to outperform and set a price target of $306 per share. That would represent a 42% rise from here.
As Baird sees it, the return of the 737 MAX to service should lead to a return to long-term growth for the aircraft manufacturer. Moreover, favorable trends in COVID-19 case counts and the gradual progress in vaccinations could bode well for air travel to go back to past traffic levels sooner rather than later.
Boeing suffered huge losses in 2020 and faces more uncertainty ahead as airlines retrench and figure out how to move forward. Nevertheless, as one of two major global commercial aircraft manufacturers, Boeing should rebound as long as people don't give up on air travel for good.
2. Goldman Sachs
Goldman Sachs (GS 0.06%) has already given long-term investors a big reward for sticking with the investment banking giant over the past year. Although shares fell sharply at the beginning of the coronavirus crisis because of fears about massive unemployment causing major loan defaults and economic chaos, Goldman's stock started hitting new all-time highs at the beginning of 2021 and has already risen 13% in less than six weeks.
Analysts believe the good times could still be ahead for Goldman. An average price target of $334 per share is about 11% higher than current levels, but Oppenheimer has more ambitious ideas, with its outperform rating and $445 stock price target set in January representing a nearly 50% gain from current levels.
Oppenheimer was pleased to see Goldman do extremely well when it reported fourth-quarter financial results in January. In particular, the Wall Street bank's earnings came in a whopping 63% higher than most investors had expected, and Goldman was optimistic about how its prospects look for 2021.
Goldman Sachs essentially treaded water during much of the 2010s, and many believed that the bank's best days were behind it. But now, confidence in Goldman is back, and a push further into record territory is quite possible.
Finally, UnitedHealth Group (UNH -0.71%) has been an outstanding performer for years. The health insurance giant clawed back nearly all of its pandemic-crash losses in just a single month, and its stock is up about 10% over the past year.
Wall Street has high hopes for UnitedHealth. Even the average price target of $396 per share is 20% higher than current levels. The top call for $462 from analysts at Morgan Stanley is fully 40% higher.
Morgan Stanley actually has a couple of positive views on the health insurer. Its base target price complements its overweight rating on the stock, with reasonable assumptions in getting to the $462 number. Yet Morgan has also modeled a more bullish scenario under which it would predict a higher target price of $529 per share. That would be roughly 60% above current levels.
Investors are optimistic that UnitedHealth is positioned perfectly for a change in leadership in Washington, with new attention on healthcare that should complement its strategy of having a sizable presence in the Medicare and Medicaid insurance markets. The Optum health benefits and services unit has been an even bigger goldmine for UnitedHealth, and its prospects look strong regardless of what happens with federal healthcare policy. All in all, UnitedHealth is prepared for whatever's likely to come, and that's a good position for investors to be in.
Look to the Dow for great stocks
Just because a stock is a household name doesn't mean you can't make money investing in it. If Wall Street analysts are right, then gains for UnitedHealth, Goldman Sachs, and Boeing could be sizable in 2021 and beyond. That makes them deserving of a closer look from investors looking for good investment ideas.