Top 11 ASX stocks from 2019: what’s the 2020 forecast?

Top ASX stocks from 2019

With 2019 now behind us, we take a look at the top eleven stocks that contributed most significantly to the ASX 200's performance in 2019 – broken down by sector – as well as examine how analysts expect these stocks to perform in 2020

Santos share price (Energy)

Crude oil prices witnessed modest gains in CY19, starting the year out at ~US$50 per barrel and ending at around the ~US$60 per barrel mark. Santos (ASX: STO) by comparison saw its share price far outpace the ASX 200 benchmark in 2019 – with the company handing investors total returns of 53.1% in that period.

Looking at analyst forecasts for the next 12-month period, we see that Santos currently has an average price target of $8.75 and a BUY rating, on average.

BHP Group share price (Materials)

A short-lived rally in iron prices which saw the mainstay commodity top-out at ~US$120 per tonne during mid-2019 helped push BHP Group (ASX: BHP) to a five-year share price high in CY19. As a result, BHP delivered investors total returns of 24.9% during the previous calendar year.

Though BHP proved a strong performer in 2019, analysts look mixed on the miner’s prospects over the next 12-months. The stock currently has an average 12-month price target of $36.42 and a HOLD rating on average.

Transurban share price (Industrials)

Commenting on the company’s FY19 results, Transurban's CEO, Scott Chalton said:

'Our continued focus on delivery and execution has seen the opening of new capacity on four major projects over the year,' adding that 'the community response to the opening of the New Mr Tunnels has been particularly positive with early traffic performance currently ahead of our investment case.'

This keen focus looks to have translated well into gains for Transurban (ASX: TCL) shareholders in CY19, with the company delivering total returns of 33.2% during the year.

In saying that, with an average 12-month price target of $14.04 per share and a HOLD rating on average, analysts look decisively mixed on Transurban’s prospects for the new year.

Wesfarmers share price (Consumer Discretionary)

Wesfarmers (ASX: WES) moved from strength to strength in 2019 – as the company pursued an investor-friendly agenda – returning roughly $3.2bn to shareholders during FY19, delivering 39.1% in total returns in the process.

In saying that, Wesfarmers currently has a HOLD rating on average, with an average 12-month price target of $35.47 – which suggests that analysts are currently expecting significant downside for the stock over the next year.

Woolworths share price (Consumer Staples)

Woolworths (ASX: WOW) used 2019 to refocus its business priorities, grow its online sales and return value to shareholders. As a result, WOW delivered total returns of 26.8% to investor in CY19.

Even so and like Wesfarmers, analysts currently have a bearish outlook on Woolworths (ASX: WOW): with 46.2% of analysts rating the conglomerate a SELL. If analysts are proven correct, the 12-month price target of $34.40 (on average) suggests some downside from current price levels.

CSL share price (Health Care)

CSL (ASX: CLS) proved popular amongst analysts in 2019, with a number of investment banks raising their price targets on the health care stock. As we wrote previously, Macquarie in particular ‘believes that strong immunoglobulin (IG) price growth is likely to help CSL’s earnings in the years ahead.’

Investors – both institutional and retail – seemed equally bullish on the healthcare stock in CY19 – with CSL delivering investors total returns of 50.8% – made up primarily of capital gains.

Though an average 12-month price target of $288.08 implies some downside for current investors, CSL remains overwhelming liked by analysts, with nine (64.3%) of analysts covering the stock still rating it a BUY.

Commonwealth Bank share price (Financials)

Though the Commonwealth Bank of Australia (ASX: CBA) was the best performing stock in the ASX 200 financials sector in CY19, according to Morgan Stanley – boasting a total return of 16.9% in that period, it is currently the least favoured by analysts amongst the big four banks, with a SELL rating on average.

In step with the above, analysts currently have a 12-month average price target of $75.03 on the biggest of the big four banks.

Xero share price (Information Technology)

Xero (ASX: XRO) – the cloud-based accounting software company looks to have hit its stride in 2019, with its share price almost doubling in price. When covering Xero’s first-half FY20 results in November, we previously wrote that the company’s ‘revenue soared 32% to reach $338.7m, that total subscribers grew 30% to reach 2.057m and that “EBITDA excluding impairments of $65.9 million almost doubled from $34.5 million in H1 FY19.”’

Though impressive growth figures, analysts look to be expecting some downside over the next 12-months for the fast-growing company, with a current average price target of $76.16 on the technology stock. In saying that, 60% of analysts covering the stock still rate it a BUY.

Goodman Group share price (Real Estate)

Buoyed by robust demand in the industrial property sector and growing land scarcity, the Goodman Group (ASX: GMG) handed investors impressive total returns during CY19 of 28.4%. As the company wrote in a recent update to the market, 'strong rental growth, high occupancy [are] encouraging us to increase the volume of development.'

These favourable trends look well-reflected in the current analyst consensus: with the stock rated a BUY on average. The current 12-month price target for Goodman Group is $15.53 (on average), which may suggest some upside potential for the stock over the next year, if analysts are proven correct.

Telstra share price (Communication Services)

Telstra (ASX: TLS) recorded strong gains in 2019, handing patient investors a total return of 30.2%, with the market seemingly pleased with progress the telco is making on its transformative T22 strategy.

Though the soon-to-be-decided TPG-Vodafone merger court case may increase competition in Australia’s already concentrated telecommunications markets, analysts remain bullish on the blue-chip telco’s prospects, with 66.7% of the analysts covering the stock rating it a BUY. Telstra currently has a 12-month price target of $3.90, on average.

APA Group share price (Utilities)

As Australia’s largest natural gas infrastructure company, APA Group’s (ASX: APA) low risk and modest growth business model looks to have attracted investors in 2019 – with its stock delivering strong total returns of 36.3% in that period.

Looking at financial performance, the company saw its revenue grow by 4.6% and profits (NPAT) rise by 8.8% in FY19. According to the ASX, APA Group has a current annual dividend yield of 4.29%.

Though APA Group delivered investors significant total returns in CY19, analysts look less positive about the company’s next 12-months: hitting the stock with a HOLD rating on average and a 12-month price target of $10.79 (also on average). Should analysts be correct in their estimates, investors may be looking at low single-digit downside of around ~5%.

How to buy 2019’s top contributing ASX stocks

Investors can buy any of 2019’s top eleven ASX 200 stocks we have looked at today through IG’s share trading platform by following the four simple steps:

• Open a share trading account with IG
• Log into the IG account and go to the ‘My IG dashboard’
• Fund your newly created share trading account. Open the classic platform on the share trading account, go to the 'finder' panel on the platform, type in and select which ASX 200 stock you would like to buy
• Click on the deal ticket: where the ‘on exchange’ option will appear. On exchange means interacting directly with the relevant exchange.

For investors who aren’t quite ready to commit real capital, click here to practise trading ASX stocks with an IG demo account now

^{The above list (including the total returns data used) was compiled based on Morgan Stanley research. Other price target and ratings data was taken from Bloomberg Data.}