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.

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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

Sources: S&P Global Market Intelligence, IBD