Wall Street Analysts Remain Bullish on U.S. Stocks

According to an analysis by FactSet’s John Butters, some analysts on Wall Street are maintaining their bullish outlook despite the relatively flat performance of U.S. stocks in 2023. Their projections indicate that the S&P 500 index could rise by 19% over the next 12 months, surpassing the milestone level of 5,000 for the first time.

In a note, Butters highlighted that on September 21, the bottom-up target price for the S&P 500 was 5,152.11, representing a 19.0% increase from the closing price of 4,330.00.

Analyzing the expected performance by sector, information technology is anticipated to lead the way with a projected gain of 22.8%. Following closely, consumer discretionary is expected to experience a gain of 22.7%, while real estate is projected to jump by 22.6%. Conversely, energy stocks are predicted to have the smallest expected price increase of just 10.7%, lagging behind the other sectors.

These expectations for index performance are primarily based on optimistic earnings growth forecasts, in contrast to the year-over-year earnings declines observed in the past three quarters. Analysts on Wall Street foresee earnings growth of 12.2% for calendar-year 2024, although this number was slightly revised downward last week for the first time in over two months.

Meanwhile, there has been a slight decrease of 0.2% in the bottom-up earnings estimate for the third quarter since June 30, with the median estimate now at $55.74, compared to $55.86 previously.

S&P 500: Stock Market Performances

The S&P 500 is a widely followed stock market index that provides insights into the overall performance of the US stock market. Analysts make projections for individual stocks, and based on these estimates, we can identify both optimistic and lagging stocks within the index.

Top Performers

Here are the top 10 stocks that Wall Street is most optimistic about:

1. SolarEdge Technologies, Inc. (SEDG) – Expected gain: 112.8%
2. Insulet Corporation (PODD) – Expected gain: 75.1%
3. DexCom, Inc. (DXCM) – Expected gain: 68.4%
4. FMC Corporation (FMC) – Expected gain: 67.6%
5. United Airlines Holdings, Inc. (UAL) – Expected gain: 67.1%
6. Moderna, Inc. (MRNA) – Expected gain: 66.6%
7. ResMed Inc. (RMD) – Expected gain: 65.4%
8. Etsy, Inc. (ETSY) – Expected gain: 63.4%
9. Alaska Air Group, Inc. (ALK) – Expected gain: 62.5%
10. MGM Resorts International (MGM) – Expected gain: 60.7%

Lagging Stocks

On the other hand, here are the 10 stocks that Wall Street expects to lag behind the rest of the index:

1. Expeditors International of Washington, Inc. (EXPD) – Expected loss: -5.3%
2. Tyson Foods, Inc. Class A (TSN) – Expected loss: -3.9%
3. Consolidated Edison, Inc. (ED) – Expected loss: -3.1%
4. Robert Half Inc. (RHI) – Expected loss: -2.1%
5. Amgen Inc. (AMGN) – Expected loss: -2.0%
6. Progressive Corporation (PGR) – Expected loss: -1.7%
7. International Business Machines Corp. (IBM) – Expected loss: -1.6%
8. Aon Plc Class A (AON) – Expected loss: -0.9%
9. Seagate Technology Holdings PLC (STX) – Expected loss: -0.7%
10. Cboe Global Markets Inc (CBOE) – Expected loss: -0.2%

Despite recent market declines in August, the S&P 500 has still had a positive performance, up 13% since the beginning of the year. As of Monday’s session, it closed at 4,337.44, according to FactSet data.

The recent slide in US stocks has been attributed to rising Treasury yields, particularly for the 10-year note and 30-year bond yields, which triggered the selloff in stocks.