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Are These Beaten-Down S&P 500 Members Worth a Buy?
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The performance of a few S&P 500 members in 2024 has left a sour taste in investors’ mouths, with beloved stocks such as Nike (NKE - Free Report) , Tesla (TSLA - Free Report) , and Apple (AAPL - Free Report) unable to gain any meaningful traction.
Image Source: Zacks Investment Research
The less-than-ideal performance raises a valid question: Is this a buying opportunity, or is there more weakness ahead? Let’s take a closer look at each.
Apple
Market heavyweight Apple, also a member of the beloved ‘Mag 7’ group, has struggled over the last year overall, essentially flat compared to the S&P 500’s 24% gain. Slowing growth paired with uncertainties concerning China sales have bogged down performance, though it’s critical to note that its Services portfolio has helped keep sentiment in check.
Image Source: Zacks Investment Research
Revenues in China totaled $20.8 billion throughout its latest period, moving 13% lower year-over-year. Still, Services revenue of $23.1 billion reflected a record and jumped 11.3% from the same period last year.
Analysts have taken a slightly bearish stance on the company’s current year outlook, with the $6.54 Zacks Consensus EPS estimate down roughly 2% over the last year. The stock is a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Tesla
Down nearly 40% in 2024, Tesla shares have faced a bumpy road, with lower margins, hybrid momentum, and recent layoff announcements affecting shares negatively. Analysts have taken note of the headwinds, lowering their earnings expectations across the board and pushing the stock into a Zacks Rank #5 (Strong Sell).
Image Source: Zacks Investment Research
The company is gearing up to unveil its next set of quarterly results next week on April 23rd, with current consensus expectations alluding to a 45% decline in earnings on 5% lower sales. Tesla unveiled its production and delivery results in early April; TSLA produced over 433k vehicles and delivered approximately 387k.
Top line revisions have also been taken lower for the quarter to be reported, with the $22.2 billion expected down 15% since the end of January.
Image Source: Zacks Investment Research
Nike
Nike shares have faced selling pressure over the last year but have overall displayed relative strength throughout April, gaining 1.3% compared to the S&P 500’s 4% decline. Slowing sales growth has negatively impacted performance, with shares seeing selling pressure following its latest set of quarterly results despite exceeding both EPS and sales expectations.
Image Source: Zacks Investment Research
Still, the company maintains a positive outlook, with CFO Matthew Friend stating ‘Our teams are focused on what matters most to return to strong growth. We are taking action to build a faster, more efficient NIKE and maximize the impact of our new innovation cycle.’
It’s worth noting that analysts have begun positively revising their current year earnings expectations, with the current $3.73 Zacks Consensus EPS estimate up nicely from $3.57 at the end of February. It’s reasonable to expect shares to continue trading favorably as long as earnings expectations remain on an upward trajectory.
Image Source: Zacks Investment Research
Bottom Line
The S&P 500’s performance has been bogged down by a few beloved stocks year-to-date, including Tesla (TSLA - Free Report) , Apple (AAPL - Free Report) , and Nike (NKE - Free Report) .
Concerning Apple, slowing sales in China undoubtedly remains a headwind, but robust Services results have kept its long-term story visibly bright.
Tesla, a current Zacks Rank #5 (Strong Sell), has seen its earnings outlook shift considerably negative, with uncertainties remaining to hang.
Nike has begun seeing positive revisions for its current fiscal year, which have coincided with relative strength in shares throughout April.
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Are These Beaten-Down S&P 500 Members Worth a Buy?
The performance of a few S&P 500 members in 2024 has left a sour taste in investors’ mouths, with beloved stocks such as Nike (NKE - Free Report) , Tesla (TSLA - Free Report) , and Apple (AAPL - Free Report) unable to gain any meaningful traction.
Image Source: Zacks Investment Research
The less-than-ideal performance raises a valid question: Is this a buying opportunity, or is there more weakness ahead? Let’s take a closer look at each.
Apple
Market heavyweight Apple, also a member of the beloved ‘Mag 7’ group, has struggled over the last year overall, essentially flat compared to the S&P 500’s 24% gain. Slowing growth paired with uncertainties concerning China sales have bogged down performance, though it’s critical to note that its Services portfolio has helped keep sentiment in check.
Image Source: Zacks Investment Research
Revenues in China totaled $20.8 billion throughout its latest period, moving 13% lower year-over-year. Still, Services revenue of $23.1 billion reflected a record and jumped 11.3% from the same period last year.
Analysts have taken a slightly bearish stance on the company’s current year outlook, with the $6.54 Zacks Consensus EPS estimate down roughly 2% over the last year. The stock is a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Tesla
Down nearly 40% in 2024, Tesla shares have faced a bumpy road, with lower margins, hybrid momentum, and recent layoff announcements affecting shares negatively. Analysts have taken note of the headwinds, lowering their earnings expectations across the board and pushing the stock into a Zacks Rank #5 (Strong Sell).
Image Source: Zacks Investment Research
The company is gearing up to unveil its next set of quarterly results next week on April 23rd, with current consensus expectations alluding to a 45% decline in earnings on 5% lower sales. Tesla unveiled its production and delivery results in early April; TSLA produced over 433k vehicles and delivered approximately 387k.
Top line revisions have also been taken lower for the quarter to be reported, with the $22.2 billion expected down 15% since the end of January.
Image Source: Zacks Investment Research
Nike
Nike shares have faced selling pressure over the last year but have overall displayed relative strength throughout April, gaining 1.3% compared to the S&P 500’s 4% decline. Slowing sales growth has negatively impacted performance, with shares seeing selling pressure following its latest set of quarterly results despite exceeding both EPS and sales expectations.
Image Source: Zacks Investment Research
Still, the company maintains a positive outlook, with CFO Matthew Friend stating ‘Our teams are focused on what matters most to return to strong growth. We are taking action to build a faster, more efficient NIKE and maximize the impact of our new innovation cycle.’
It’s worth noting that analysts have begun positively revising their current year earnings expectations, with the current $3.73 Zacks Consensus EPS estimate up nicely from $3.57 at the end of February. It’s reasonable to expect shares to continue trading favorably as long as earnings expectations remain on an upward trajectory.
Image Source: Zacks Investment Research
Bottom Line
The S&P 500’s performance has been bogged down by a few beloved stocks year-to-date, including Tesla (TSLA - Free Report) , Apple (AAPL - Free Report) , and Nike (NKE - Free Report) .
Concerning Apple, slowing sales in China undoubtedly remains a headwind, but robust Services results have kept its long-term story visibly bright.
Tesla, a current Zacks Rank #5 (Strong Sell), has seen its earnings outlook shift considerably negative, with uncertainties remaining to hang.
Nike has begun seeing positive revisions for its current fiscal year, which have coincided with relative strength in shares throughout April.