Remember the S&P 500's ugly losses for 2020? They've completely vanished — but analysts still think some promising stocks were left behind.
The S&P 500 is back to break-even for the year along with more than a third of the stocks in the index. But most S&P 500 stocks are still down in 2020, even though analysts think many are worth much more.
Specifically, eight S&P 500 stocks, including information technology leader Applied Materials, health care leader Bristol Myers Squibb and financial company Loews, are still in the red for 2020. But analysts still think they'll be 14% or more higher in 12 months, according to an Investor's Business Daily analysis from S&P Global Market Intelligence and MarketSmith.
It's another reminder of how investors are looking for more S&P 500 stocks to join the rally after the top stocks already led the way. You can find the stocks leading the market on Leaderboard.
"The S&P 500 index has been quickly recouping its losses on the year on falling infection rates in major economies as lockdown restrictions are eased globally," said Edward Moya, senior market analyst at Oanda.
S&P 500 Stages Powerful 2020 Recovery
If you even blinked waiting for the S&P 500 stock recovery, you probably missed it.
Thanks to a powerful $11 trillion rally from the March 23 low, investors are now up $100 billion for the year, says Wilshire Associates. Keep in mind investors had lost more than 30% of their money, or $11 trillion, when the market hit bottom on March 23.
The S&P 500 is up 45% from the low.
Leading S&P 500 sectors are pulling more than their fair share. Four of the 11 S&P 500 sectors are up this year. The Technology Select Sector SPDR is tops in 2020, rising 11.2%. And the Consumer Discretionary Select Sector SPDR ETF is just behind with a 6.2% gain.
But that means plenty of S&P 500 sectors and stocks are left out, and analysts are scrambling to adjust their expectations. Bank of America on Monday upped its 2020 price target on the S&P 500 by 11.5% to 2900. BofA called it a "mea culpa."
"From March 23rd to now, the S&P 500's meteoric ascent has been driven by growth stocks like FANG and Tech," according to a report co-authored by BofA strategist Savita Subramanian. The authors added that the "S&P 500 is the ultimate beneficiary of Fed stimulus."
Applied Materials: S&P 500 Tech Winner With More Upside
Computer chipmaking equipment company Applied Materials is one of the S&P 500 tech stocks analysts think have room to run.
It's a leader with a 94 Composite Rating. Profit in the April quarter shot up 27% to 89 cents a share, while profit dropped at many other S&P 500 companies. And analysts think the company's profit will jump nearly 18% this fiscal year. S&P 500 profit is expected to drop this year.
Applied Materials' stock is up 49% from the March low. Even so, it's still down nearly 2% on the year at 59.90 a share. Analysts, though, think the stock will be worth 68.55 in 12 months, which would be 14% upside.
S&P 500: High Hopes For Health Care
Health care is a logical winner from the coronavirus aftermath. The S&P 500 sector will generate the treatments or cures that allow for the economy to fully open.
And so it's no surprise the Health Care Select Sector SPDR ETF is up 2% this year. But there's still opportunity. Bristol Myers Squibb stock is still down 4.3% this year, to 61.43 a share, despite rallying 32% from the March low. Coming off 56% first-quarter profit growth, the stock carries a 98 Composite Rating.
And analysts think the S&P 500 company is worth 17% more than it is now, or potentially 72.07 a share. What's supposed to be a strong year for profit helps, too. Bristol Myers Squibb's profit is seen jumping 32% this year.
So while the market is running higher, there are still opportunities to own leaders with upside.
S&P 500 Stock Down In 2020 Where Analysts See Upside
Analysts think there's 14% or more to go
| Company | Ticker | YTD % Ch. | Implied Upside To Price Target | Sector | Composite Rating |
|---|---|---|---|---|---|
| Loews | -23.9% | 47.7% | Financials | 20 | |
| Western Digital | -23.5% | 24.6% | Information Technology | 38 | |
| TechnipFMC | -52.8% | 22.1% | Energy | 4 | |
| Mosaic | -30.8% | 17.6% | Materials | 12 | |
| Bristol Myers Squibb | -4.3% | 17.3% | Health Care | 98 | |
| AES | -24.8% | 16.6% | Utilities | 26 | |
| Mylan | -6.6% | 15.7% | Health Care | 74 | |
| HCA Healthcare | -20.1% | 15.1% | Health Care | 33 | |
| Applied Materials | -1.9% | 14.4% | Information Technology | 94 | |
| WestRock | -23.1% | 14.1% | Materials | 45 | |
| S&P 500 | 0.0% |
Source: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
