The Federal Reserve’s interest rate hikes have made markets volatile, but some stocks have still managed to outperform. The S & P 500 is down 6.6% since March 15, 2022 — one day before the central bank began its campaign to push interest rates to almost 5% today from near 0% a year ago. Fed Chairman Jerome Powell told Congress Tuesday that rates will likely continue higher for longer to contain inflation, fueling a selloff in stocks. Against such a backdrop, CNBC screened for stocks that have outperformed in the past year and are poised to see continued gains even as monetary policy stays tight. The following stocks are up more than 10% since the day before the Fed began its current policy last March. Analysts are also bullish on the stocks, with more than 70% rating them buy and consensus price targets offering upside of 10% or more. Here are some of the stocks that can continue to gain even as the Fed lifts its likely peak interest rate, and where analysts expect the stocks to trade in the future. Several energy stocks made the list of winners over the past year, including Schlumberger N.V. , EQT and Diamondback Energy . Schlumberger has surged 38% since rates began to rise, and has an average price target of $64, which implies an upside of 22% from its closing price on Tuesday. Although the stock has dipped 2% in 2023, more than three quarters (77%) of analysts covering SLB rate it a buy. Diamondback Energy has an average upside of about 25% based on analysts’ average price targets. Three-quarters of analysts on the stock give it a buy rating. The stock is up almost 3% in 2023, after rallying 26.8% last year and more than doubling in 2021. Credit Suisse analyst Bill Janela said in February that Diamondback also has an attractive relative valuation, adding that “while M & A headline risk was the frequent pushback on FANG for much of last year, acquisitions made in 4Q22 were sufficiently accretive and well received by the market such that the M & A concerns have been alleviated.” Analysts are optimistic that Delta Airlines will manage to continue its gains — 86% of analysts rate the stock a buy. Shares have already jumped 20% in 2023 as demand and ticket prices remain elevated post-pandemic. Evercore ISI upgraded Delta on Tuesday to outperform from in line, saying it anticipates several positive catalysts ahead for the carrier and encouraged investors to buy the dip. Technology companies Synopsys , CoStar , Monolithic Power Systems , EPAM Systems and CDW Corporation were also on the list. EPAM Systems shares have rallied almost 36% during the Fed’s rate hike cycle, but have fallen 9% year-to-date. —CNBC’s Michael Bloom contributed to this report.
These stocks are winning even as Fed hikes rates — and Wall Street sees the gains continuing