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Buy These 4 S&P 500 Year-to-Date Laggards With Solid Near-Term Upside
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U.S. stock markets have been witnessing an impressive rally since the beginning of 2023 barring some minor hurdles. Wall Street’s bull run has got an added boost this year, to the surprise of a large section of financial pandits, who indiscriminately warned of overvaluation.
Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have advanced 11.8%, 21.1%, and 23.2%, respectively. Despite this strong northbound movement, more than 150 stocks within the broad-market index — the S&P 500 — significantly lagged the benchmark itself this year.
Year to date, these stocks have provided either negative returns or returns below 1%. However, these stocks have strong price upside potential for the short term. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
A Near-Term Positive
Last week, the Fed initiated the first cut interest rate since March 2020 with an aggressive reduction of 50-basis points. Further, the Fed’s latest “dot-plot” showed the possibility of another 50-basis points cut this year. These developments will enable Wall Street to maintain its northbound journey.
At the same time, the fundamentals of the U.S. economy remain rock solid. The U.S. GDP grew at 1.4% in first-quarter 2024. The second-quarter GDP was 3%. On Sept. 18, the Atlanta Fed GDPNow projected a 2.9% GDP growth rate for the third quarter. Investors seem convinced that the big rate cut by the Fed was to ensure the soft-landing of the U.S. economy.
Buy 4 S&P 500 Laggards With Solid Price Upside
These four S&P 500 laggards of this year have double-digit upside left for the rest of 2024.
The chart below shows the price performance of our four picks year to date.
Image Source: Zacks Investment Research
Carnival Corp. & plc
Carnival reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. This was driven by sustained demand strength and increased booking volumes at significantly higher prices. CCL reported strong booking momentum for 2025, with record volumes surpassing the 2024 levels in price and occupancy.
CCL’s focus on marketing campaigns and fleet-optimization efforts, along with fleet expansion initiatives is encouraging. Given the uptrend, CCL raised its fiscal 2024 adjusted EPS expectations to $1.18 from the previous expectation of $0.98.
Solid Earnings Estimate Revisions for CCL Stock
Zacks Rank #1 Carnival has an expected revenue and earnings growth rate of 15% and more than 100%, respectively, for the current year (ending November 2024). The stock has seen positive earnings estimate revisions for the current quarter, next quarter, current year and next year in the last 60 days.
Robust Price Upside for CCL Stock
Year to date, CCL has provided a return of 0.7%. The average price target of brokerage firms represents an increase of 25% from the last closing price of $18.68. The brokerage target price is currently in the range of $14-$27.
Pfizer Inc.
Pfizer is one of the largest and most successful drugmakers in the field of oncology. PFE’s position in oncology was strengthened with the addition of Seagen. Oncology sales comprise more than 26% of its total revenues. PFE’s oncology revenues grew 23% on an operational basis in the first half of 2024 driven by drugs like Xtandi, Lorbrena, Braftovi-Mektovi combination and Seagen’s cancer drugs.
Pfizer has committed significant resources toward the development of treatments in the fields of oncology, internal medicine, rare diseases, immunology, inflammation, vaccines and hospitals.
PFE Shares’ Earnings Estimate Revisions on the Rise
Zacks Rank #2 Pfizer has an expected revenue and earnings growth rate of 5.1% and 42.4%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, next quarter, current year and next year in the last 60 days.
Solid Price Upside Potential for PFE Shares
Year to date, PFE has provided a return of 0.6%. The average price target of brokerage firms represents an increase of 15% from the last closing price of $28.97. The brokerage target price is currently in the range of $27-$45.
Zoetis Inc.
Zoetis has benefited from increased companion animal product sales. ZTS has an innovative pet care parasiticides portfolio, including Simparica Trio and key dermatology products, which are maintaining their momentum.
The strong uptake of Librela and Solensia in Europe, ZTS’ new monoclonal antibody therapies for osteoarthritis pain in dogs and cats, has boosted sales. The launch of Librela in the U.S. market is fueling growth. ZTS announced a 15% hike in dividend payments from the quarterly rate paid in 2023, starting first-quarter 2024.
Strong Earnings Estimate Revisions for ZTS Stock
Zacks Rank #2 Zoetis has an expected revenue and earnings growth rate of 7.5% and 9.6%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the next quarter, current year and next year in the last 60 days.
Impressive Price Upside Potential for ZTS Stock
Year to date, ZTS has provided a negative return of 1.3%. The average price target of brokerage firms represents an increase of 14.9% from the last closing price of $194.87. The brokerage target price is currently in the range of $196-$248.
Teledyne Technologies Inc.
Teledyne Technologies’ growth prospects remain solid, backed by the encouraging U.S. defense spending provisions as well as solid projections for commercial air travel. Increasing global geopolitical instability has led to solid order flows for TDY.
Apart from generating organic growth, TDY has also been gaining substantially from strategic acquisitions. TDY holds a strong solvency position, at least in the near term. Our model predicts total revenues to increase in the 2025 and 2026 period.
Positive Earnings Estimate Revisions for TDY Shares
Zacks Rank #2 Teledyne Technologies has an expected revenue and earnings growth rate of 5.1% and 11.5%, respectively, for next year. The stock has seen positive earnings estimate revisions for the next quarter, current year and next year in the last 30 days.
Strong Price Upside Potential for TDY Shares
Year to date, TDY has provided a negative return of 2.3%. The average price target of brokerage firms represents an increase of 10.1% from the last closing price of $436.19. The brokerage target price is currently in the range of $450-$520.
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Buy These 4 S&P 500 Year-to-Date Laggards With Solid Near-Term Upside
U.S. stock markets have been witnessing an impressive rally since the beginning of 2023 barring some minor hurdles. Wall Street’s bull run has got an added boost this year, to the surprise of a large section of financial pandits, who indiscriminately warned of overvaluation.
Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have advanced 11.8%, 21.1%, and 23.2%, respectively. Despite this strong northbound movement, more than 150 stocks within the broad-market index — the S&P 500 — significantly lagged the benchmark itself this year.
We have narrowed our search to five such stocks — Carnival Corporation & plc (CCL - Free Report) , Pfizer Inc. (PFE - Free Report) , Zoetis Inc. (ZTS - Free Report) and Teledyne Technologies Inc. (TDY - Free Report) .
Year to date, these stocks have provided either negative returns or returns below 1%. However, these stocks have strong price upside potential for the short term. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
A Near-Term Positive
Last week, the Fed initiated the first cut interest rate since March 2020 with an aggressive reduction of 50-basis points. Further, the Fed’s latest “dot-plot” showed the possibility of another 50-basis points cut this year. These developments will enable Wall Street to maintain its northbound journey.
At the same time, the fundamentals of the U.S. economy remain rock solid. The U.S. GDP grew at 1.4% in first-quarter 2024. The second-quarter GDP was 3%. On Sept. 18, the Atlanta Fed GDPNow projected a 2.9% GDP growth rate for the third quarter. Investors seem convinced that the big rate cut by the Fed was to ensure the soft-landing of the U.S. economy.
Buy 4 S&P 500 Laggards With Solid Price Upside
These four S&P 500 laggards of this year have double-digit upside left for the rest of 2024.
The chart below shows the price performance of our four picks year to date.
Image Source: Zacks Investment Research
Carnival Corp. & plc
Carnival reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. This was driven by sustained demand strength and increased booking volumes at significantly higher prices. CCL reported strong booking momentum for 2025, with record volumes surpassing the 2024 levels in price and occupancy.
CCL’s focus on marketing campaigns and fleet-optimization efforts, along with fleet expansion initiatives is encouraging. Given the uptrend, CCL raised its fiscal 2024 adjusted EPS expectations to $1.18 from the previous expectation of $0.98.
Solid Earnings Estimate Revisions for CCL Stock
Zacks Rank #1 Carnival has an expected revenue and earnings growth rate of 15% and more than 100%, respectively, for the current year (ending November 2024). The stock has seen positive earnings estimate revisions for the current quarter, next quarter, current year and next year in the last 60 days.
Robust Price Upside for CCL Stock
Year to date, CCL has provided a return of 0.7%. The average price target of brokerage firms represents an increase of 25% from the last closing price of $18.68. The brokerage target price is currently in the range of $14-$27.
Pfizer Inc.
Pfizer is one of the largest and most successful drugmakers in the field of oncology. PFE’s position in oncology was strengthened with the addition of Seagen. Oncology sales comprise more than 26% of its total revenues. PFE’s oncology revenues grew 23% on an operational basis in the first half of 2024 driven by drugs like Xtandi, Lorbrena, Braftovi-Mektovi combination and Seagen’s cancer drugs.
Pfizer has committed significant resources toward the development of treatments in the fields of oncology, internal medicine, rare diseases, immunology, inflammation, vaccines and hospitals.
PFE Shares’ Earnings Estimate Revisions on the Rise
Zacks Rank #2 Pfizer has an expected revenue and earnings growth rate of 5.1% and 42.4%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the current quarter, next quarter, current year and next year in the last 60 days.
Solid Price Upside Potential for PFE Shares
Year to date, PFE has provided a return of 0.6%. The average price target of brokerage firms represents an increase of 15% from the last closing price of $28.97. The brokerage target price is currently in the range of $27-$45.
Zoetis Inc.
Zoetis has benefited from increased companion animal product sales. ZTS has an innovative pet care parasiticides portfolio, including Simparica Trio and key dermatology products, which are maintaining their momentum.
The strong uptake of Librela and Solensia in Europe, ZTS’ new monoclonal antibody therapies for osteoarthritis pain in dogs and cats, has boosted sales. The launch of Librela in the U.S. market is fueling growth. ZTS announced a 15% hike in dividend payments from the quarterly rate paid in 2023, starting first-quarter 2024.
Strong Earnings Estimate Revisions for ZTS Stock
Zacks Rank #2 Zoetis has an expected revenue and earnings growth rate of 7.5% and 9.6%, respectively, for the current year. The stock has seen positive earnings estimate revisions for the next quarter, current year and next year in the last 60 days.
Impressive Price Upside Potential for ZTS Stock
Year to date, ZTS has provided a negative return of 1.3%. The average price target of brokerage firms represents an increase of 14.9% from the last closing price of $194.87. The brokerage target price is currently in the range of $196-$248.
Teledyne Technologies Inc.
Teledyne Technologies’ growth prospects remain solid, backed by the encouraging U.S. defense spending provisions as well as solid projections for commercial air travel. Increasing global geopolitical instability has led to solid order flows for TDY.
Apart from generating organic growth, TDY has also been gaining substantially from strategic acquisitions. TDY holds a strong solvency position, at least in the near term. Our model predicts total revenues to increase in the 2025 and 2026 period.
Positive Earnings Estimate Revisions for TDY Shares
Zacks Rank #2 Teledyne Technologies has an expected revenue and earnings growth rate of 5.1% and 11.5%, respectively, for next year. The stock has seen positive earnings estimate revisions for the next quarter, current year and next year in the last 30 days.
Strong Price Upside Potential for TDY Shares
Year to date, TDY has provided a negative return of 2.3%. The average price target of brokerage firms represents an increase of 10.1% from the last closing price of $436.19. The brokerage target price is currently in the range of $450-$520.