As Dow retakes a record high, here are the stocks analysts believe will lead the next leg higher

Published Mon, Mar 8 20212:20 PM EST

Jesse Pound @/in/jesse-pound @jesserpound

The Dow Jones Industrial average recovered from a recent pullback to hit another record high on Monday . Wall Street analysts see several stocks leading the next leg higher in the blue-chip average, with some of the potential winners continuing a recent resurgence and others catching up to the Dow. The Dow has outperformed the S & P 500 and Nasdaq in 2021, with a higher percentage of its constituents better leveraged to the economic recovery. The chart below shows Dow stocks with buy ratings from more than 60% of analysts and upside to the average analyst price target, according to FactSet. The stock with the most upside according to analysts is enterprise software company Salesforce . The tech giant has struggled so far this year, shedding 5.3% as its sector appears to have fallen out of favor, but analysts think the slump will be short lived More than 70% of the analysts have buy ratings on the stock, with an average price target showing 30.2% upside. Other stocks on the list have already been winners in 2021. Microsoft and Disney have added 4.1% and 4.9%, respectfully, year to date, while shares of Goldman Sachs have jumped 24.1% as bank stocks surge. Microsoft earned a price target hike from Morgan Stanley last week, with the bank's analyst raising their target to $290 per share from $285 per share. Morgan Stanley said in a note that Microsoft has an "exceptional opportunity ahead." "With an accelerating pace of digital transformation ahead, the secular tailwinds behind the broader software segment grow even stronger post the COVID-crisis," the note said. "Within this improving demand environment, Microsoft stands well positioned to accrue an even larger share of the IT wallet, particularly as Cloud adoption picks up in larger enterprises." Microsoft is trading roughly 22% below its average price target, according to FactSet, with Merck and Nike also showing more than 20% upside. Disney also appears to have some tailwinds for its business as Covid restrictions are eased around the country. New York City allowed movie theaters to reopen last week, which should help Disney's film business, while California announced that theme parks could open with limited capacity next month . There is roughly 3% upside for Disney stock, according to FactSet's average analyst target.

Salesforce

Noam Galai | Getty Images

The Dow has outperformed the S&P 500 and Nasdaq in 2021, with a higher percentage of its constituents better leveraged to the economic recovery. The chart below shows Dow stocks with buy ratings from more than 60% of analysts and upside to the average analyst price target, according to FactSet.

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