S&P 500: Analysts say 12 stocks will rise sharply this year
I hope you’ve enjoyed the rally in S&P 500 stocks this year while it lasted. Analysts are already calling for some of the biggest gainers to fall.
shares of steel dynamics (STLD), Nukor (NUE) and CHRobinson (CHRW), all set to fall 2% or more over the next 12 months, according to an analysis by Investor’s Business Daily using data from S&P Global Market Intelligence and MarketSmith. That could disappoint some investors, who have seen these stocks soar 5.5% or more this year.
The sudden reversal in the S&P 500 in February and March is a bit of a wake-up call for investors who thought all systems were stocks. The Federal Reserve is still threatening higher short-term interest rates. Meanwhile, the White House is talking about higher taxes, including for companies.
“Unfortunately, we’re in a market environment where every data point feels like a no-brainer, red light green light,” said Liz Young, SoFi’s head of investment strategy. “The most recent market-moving event was Fed Chair Powell’s testimony before Congress, which sent fed funds futures quickly higher. Red light.”
S&P 500 gains for the year
In many ways, it’s surprising that the S&P 500 is down this year. The S&P 500 rose more than 6% in January on hopes that the Fed’s biggest rate hikes are over.
But now the whole S&P 500 jump thesis has faded. The S&P 500 is now barely holding on to an annual gain of just 2.4%. And now the average stock in the S&P 500 is just clinging to a 1.4% gain.
And one of the biggest risks is in the stocks in the S&P 500, which have risen the most.
Steel stocks in the S&P 500 are showing their rust
Talk about a stock that analysts think is on the decline. Shares in steel leader Steel Dynamics are up more than 31% this year to 128.19. That easily makes it one of the top stocks in the index.
But analysts believe there’s still a lot to fall. They claim the stock will be worth just $110.50 a share 12 months from now, or nearly 14% down. Much of the stock’s decline can be explained by the company’s fundamentals. The past year was boom time at Steel Dynamics. Adjusted earnings per share rose more than 40% on resilient demand. But this year is a very different story. Analysts expect the company’s earnings to fall by nearly half to $11.98 per share.
The situation is similar at the competing steel company Nucor. The stock is up more than 27% this year alone to $167.85 per share. But analysts think the stock will fall almost 12% to 148.13 in 12 months. The fundamentals show a similar trend. The company’s earnings grew more than 20% in 2022. But this year, slowing demand is likely to drag earnings down by more than half.
It’s not just steel
Steel stocks aren’t the only members of the S&P 500 that analysts are warning have risen too much. Logistics company CH Robinson is set to fall nearly 10% over the next 12 months, according to analysts. That would come as quite a surprise to investors who are excited about the stock’s nearly 13% gain this year.
Are All S&P 500 Stocks Facing a Drop This Year? Barely. Analysts are forecasting the average stock in the S&P 500 to rise at least 18% over the next year. So if they’re willing to unsubscribe you from some winners, it might be worth listening.
Analysts say these S&P 500 stocks will fall
All are expected to fall over the next 12 months, although they are up 5.5% or more this year
|Pursue||ticker||YTD % ch.||Implied disadvantage||sector|
|CH Robinson Worldwide||(CHRW)||12.9||-9.7||Industry|
|Expeditors International of Washington||(EXPD)||6.1||-9.5||Industry|
|first sun||(FSLR)||41.1||-4.9||information technology|
|Robert Half International||(RHI)||6.8||-4.3||Industry|
|Packaging Corp. from America||(PCG)||6.0||-3.3||materials|
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @dull wreath
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