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5 Year-to-Date Laggards to Buy Amid Solid Near-Term Upside Potential
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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 14.7%, 24.8%, and 28.6%, respectively. Despite this strong northbound movement, a long list of stocks significantly lagged this year.
Nevertheless, an interesting observation is that a handful of these laggards, providing double-digit negative returns year to date, have the potential to return double-digit gains in the short term. Five such stocks with a favorable Zacks Rank are Adobe Inc. (ADBE - Free Report) , Pfizer Inc. (PFE - Free Report) , Dollar General Corp. (DG - Free Report) , Snap Inc. (SNAP - Free Report) and Ryanair Holdings plc (RYAAY - Free Report) .
Buy 5 Laggards of 2024 With Strong Short-Term Upside Potential
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Adobe Inc.
Zacks Rank #2 Adobe has extensively implemented AI applications across its flagship products, such as Photoshop, Illustrator, Lightroom, and Premiere. Earlier this year, ADBE introduced generative AI-driven Adobe Firefly. Moreover, Adobe Acrobat and Reader AI Assistant help users summarize documents and answer questions, saving time and helping users accomplish tasks faster.
Using its new AI-driven cloud-based platform, ADBE is also diversifying into digital marketing services, offering data mining services that help businesses measure page views, purchases and social media sites. Adobe Marketing Cloud enables marketers to deliver personalized web experiences across multiple devices, manage multichannel campaigns and optimize media monetization.
ADBE has launched Adobe Express, an application for quick editing effects. Leveraging generative AI, this tool is useful for short-form video content like Instagram Reels. Adobe also launched an AI-based Express app for iOS and Android.
Impressive Price Upside Potential for ADBE Stock
The stock price has plummeted 16.2% year to date. The average short-term price target of brokerage firms represents an increase of 22% from the last closing price of $499.61. The brokerage target price is currently in the range of $440-$703. This indicates a maximum upside of 40.7% and a maximum downside of 12%.
Pfizer Inc.
Pfizer’s non-COVID operational revenue growth is improving, driven by its key in-line products like Prevnar, Vyndaqel and Eliquis, new launches, and newly acquired products, including those from Seagen. Although revenues from PFE’s COVID-19 products are declining due to lower demand, huge profits from COVID products have strengthened its cash position.
The funds are being used to make acquisitions, increase dividends, buy back shares and reduce debt. Seagen’s acquisition has strengthened PFE’s position in the oncology market. Continued growth in non-COVID sales and significant cost-reduction measures should drive PFE’s profit growth.
Huge Price Upside Potential for PFE Shares
The stock price has dropped 12.8% year to date. The average short-term price target of brokerage firms represents an increase of 29.1% from the last closing price of $25.10. The brokerage target price is currently in the range of $25-$45. This indicates a maximum upside of 79.3% and no downside.
Dollar General Corp.
Dollar General remains a compelling growth story in the retail space, despite immediate margin pressure and a tough consumer environment. Thanks to its value-creating initiatives, defensive product mix and real estate growth strategy, DG has the capability to gain market share. DG’s commitment to better pricing, private label offerings, effective inventory management and merchandise initiative should drive sales.
We remain encouraged by the host of initiatives such as DG Fresh, SKU rationalization, digitization and the expansion of private fleets that should yield same-store sales improvements and margin expansion. The company emphasizes maintaining and improving cash flow in 2024. Mirroring this optimism is our expectation of same-store sales growth of 1.2% and 1.9% for the current and next fiscal year, respectively.
Attractive Price Upside Potential for DG Stock
The stock price has plunged 43.7% year to date. The average short-term price target of brokerage firms represents an increase of 24.8% from the last closing price of $76.50. The brokerage target price is currently in the range of $73-$125. This indicates a maximum upside of 63.4% and a maximum downside of 4.6%.
Snap Inc.
Snap reported strong third-quarter 2024 results. Solid daily active user growth was attributed to the steady adoption of Augmented Reality Lenses, Spotlight and AI chatbot. The Snapchat+ subscription service reached more than 12 million paying subscribers in the third quarter.
SNAP made considerable progress in diversifying revenues with Snapchat+ through new artificial intelligence-enabled features. SNAP authorized a new share repurchase program of $500 million. We expect 2024 net sales to rise 15.4% from 2023.
Excellent Price Upside Potential for SNAP Shares
The stock price has collapsed 37.9% year to date. The average short-term price target of brokerage firms represents an increase of 24.6% from the last closing price of $10.51. The brokerage target price is currently in the range of $8-$18. This indicates a maximum upside of 71.3% and a maximum downside of 23.9%.
Ryanair Holdings plc
Ryanair Holdings provides scheduled-passenger airline services in Ireland, the United Kingdom, Spain, Italy, and internationally. RYAAY’s measures to expand its fleet, to cater to rising travel demand, look encouraging. The passenger volume has been robust at Ryanair over the past few months owing to the rebound in air-traffic from COVID-19 lows.
RYAAY is also involved in the provision of various ancillary services, such as non-flight scheduled and Internet-related services, as well as in-flight sale of beverages, food, duty-free, and merchandise, and markets car hire, travel insurance, and accommodation services through its website and mobile app.
Robust Price Upside Potential for RYAAY Stock
The stock price has tumbled 15.6% year to date. The average short-term price target of brokerage firms represents an increase of 27.3% from the last closing price of $45.02. The brokerage target price is currently in the range of $52-$62. This indicates a maximum upside of 37.7% and a maximum downside of 15.5%.
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5 Year-to-Date Laggards to Buy Amid Solid Near-Term Upside Potential
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 14.7%, 24.8%, and 28.6%, respectively. Despite this strong northbound movement, a long list of stocks significantly lagged this year.
Nevertheless, an interesting observation is that a handful of these laggards, providing double-digit negative returns year to date, have the potential to return double-digit gains in the short term. Five such stocks with a favorable Zacks Rank are Adobe Inc. (ADBE - Free Report) , Pfizer Inc. (PFE - Free Report) , Dollar General Corp. (DG - Free Report) , Snap Inc. (SNAP - Free Report) and Ryanair Holdings plc (RYAAY - Free Report) .
Buy 5 Laggards of 2024 With Strong Short-Term Upside Potential
These five laggards of this year have double-digit upside left for the rest of 2024. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Adobe Inc.
Zacks Rank #2 Adobe has extensively implemented AI applications across its flagship products, such as Photoshop, Illustrator, Lightroom, and Premiere. Earlier this year, ADBE introduced generative AI-driven Adobe Firefly. Moreover, Adobe Acrobat and Reader AI Assistant help users summarize documents and answer questions, saving time and helping users accomplish tasks faster.
Using its new AI-driven cloud-based platform, ADBE is also diversifying into digital marketing services, offering data mining services that help businesses measure page views, purchases and social media sites. Adobe Marketing Cloud enables marketers to deliver personalized web experiences across multiple devices, manage multichannel campaigns and optimize media monetization.
ADBE has launched Adobe Express, an application for quick editing effects. Leveraging generative AI, this tool is useful for short-form video content like Instagram Reels. Adobe also launched an AI-based Express app for iOS and Android.
Impressive Price Upside Potential for ADBE Stock
The stock price has plummeted 16.2% year to date. The average short-term price target of brokerage firms represents an increase of 22% from the last closing price of $499.61. The brokerage target price is currently in the range of $440-$703. This indicates a maximum upside of 40.7% and a maximum downside of 12%.
Pfizer Inc.
Pfizer’s non-COVID operational revenue growth is improving, driven by its key in-line products like Prevnar, Vyndaqel and Eliquis, new launches, and newly acquired products, including those from Seagen. Although revenues from PFE’s COVID-19 products are declining due to lower demand, huge profits from COVID products have strengthened its cash position.
The funds are being used to make acquisitions, increase dividends, buy back shares and reduce debt. Seagen’s acquisition has strengthened PFE’s position in the oncology market. Continued growth in non-COVID sales and significant cost-reduction measures should drive PFE’s profit growth.
Huge Price Upside Potential for PFE Shares
The stock price has dropped 12.8% year to date. The average short-term price target of brokerage firms represents an increase of 29.1% from the last closing price of $25.10. The brokerage target price is currently in the range of $25-$45. This indicates a maximum upside of 79.3% and no downside.
Dollar General Corp.
Dollar General remains a compelling growth story in the retail space, despite immediate margin pressure and a tough consumer environment. Thanks to its value-creating initiatives, defensive product mix and real estate growth strategy, DG has the capability to gain market share. DG’s commitment to better pricing, private label offerings, effective inventory management and merchandise initiative should drive sales.
We remain encouraged by the host of initiatives such as DG Fresh, SKU rationalization, digitization and the expansion of private fleets that should yield same-store sales improvements and margin expansion. The company emphasizes maintaining and improving cash flow in 2024. Mirroring this optimism is our expectation of same-store sales growth of 1.2% and 1.9% for the current and next fiscal year, respectively.
Attractive Price Upside Potential for DG Stock
The stock price has plunged 43.7% year to date. The average short-term price target of brokerage firms represents an increase of 24.8% from the last closing price of $76.50. The brokerage target price is currently in the range of $73-$125. This indicates a maximum upside of 63.4% and a maximum downside of 4.6%.
Snap Inc.
Snap reported strong third-quarter 2024 results. Solid daily active user growth was attributed to the steady adoption of Augmented Reality Lenses, Spotlight and AI chatbot. The Snapchat+ subscription service reached more than 12 million paying subscribers in the third quarter.
SNAP made considerable progress in diversifying revenues with Snapchat+ through new artificial intelligence-enabled features. SNAP authorized a new share repurchase program of $500 million. We expect 2024 net sales to rise 15.4% from 2023.
Excellent Price Upside Potential for SNAP Shares
The stock price has collapsed 37.9% year to date. The average short-term price target of brokerage firms represents an increase of 24.6% from the last closing price of $10.51. The brokerage target price is currently in the range of $8-$18. This indicates a maximum upside of 71.3% and a maximum downside of 23.9%.
Ryanair Holdings plc
Ryanair Holdings provides scheduled-passenger airline services in Ireland, the United Kingdom, Spain, Italy, and internationally. RYAAY’s measures to expand its fleet, to cater to rising travel demand, look encouraging. The passenger volume has been robust at Ryanair over the past few months owing to the rebound in air-traffic from COVID-19 lows.
RYAAY is also involved in the provision of various ancillary services, such as non-flight scheduled and Internet-related services, as well as in-flight sale of beverages, food, duty-free, and merchandise, and markets car hire, travel insurance, and accommodation services through its website and mobile app.
Robust Price Upside Potential for RYAAY Stock
The stock price has tumbled 15.6% year to date. The average short-term price target of brokerage firms represents an increase of 27.3% from the last closing price of $45.02. The brokerage target price is currently in the range of $52-$62. This indicates a maximum upside of 37.7% and a maximum downside of 15.5%.