U.S. stock markets have witnessed 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 13.6%, 25.1%, and 32.6%, 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 have the potential to return double-digit gains in the short term. Five such stocks with a favorable Zacks Rank are: Uber Technologies Inc. UBER, Ryanair Holdings plc RYAAY, Novartis AG NVS, Okta Inc. OKTA and Booz Allen Hamilton Holding Corp. BAH.
Buy 5 Laggards of 2024 With Strong Short-Term Upside Potential
These five laggards of this year have double-digit upside left in the near term. 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.
Zacks Investment Research
Image Source: Zacks Investment Research
Uber Technologies Inc.
Uber Technologies’ Delivery business benefits from robust online order volumes. UBER’s efforts to expand its delivery operations through successive acquisitions are encouraging. Continued recovery in Mobility operations is also aiding UBER. For fourth-quarter 2024, UBER expects gross bookings of $42.75-$44.25 billion.
Apart from the recovery in Mobility operations and the strong performance of the Delivery unit, UBER’s focus on financial discipline is encouraging as well. For fourth-quarter 2024, adjusted EBITDA is estimated between $1.78 billion and $1.88 billion.
Astonishing Price Upside Potential for UBER Shares
Uber Technologies has expected revenue and earnings growth rates of 16.4% and 34%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 0.4% over the last 30 days.
The average short-term price target of brokerage firms represents an increase of 52.4% from the last closing price of $60.73. The brokerage target price is currently in the range of $76 -$120. This indicates a maximum upside of 97.6% and no downside.
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 the 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
Ryanair Holdings has expected revenue and earnings growth rates of 8.1% and 30%, respectively, for next year (ending March 2026). The Zacks Consensus Estimate for next year earnings has improved 2.6% over the last seven days.
The average short-term price target of brokerage firms represents an increase of 27% from the last closing price of $44.70. The brokerage target price is currently in the range of $52-$62. This indicates a maximum upside of 38.7% and no downside.
Novartis AG
Novartis maintains strong momentum on the back of a strong and diverse portfolio with drugs like Entresto, Kesimpta, Kisqali, Cosentyx, Pluvicto and Leqvio. The label expansion of Kisqali further fuels sales of this drug. NVS recently increased its sales guidance for the mid-term due to the strong momentum of key drugs and upcoming launches.
The uptake of Pluvicto and Scemblix has been outstanding and should fuel NVS’ top-line growth. Approval of new drugs and label expansion of existing drugs should enable NVS to offset the adverse impacts from the generic competition of Tasigna, Promacta and Entresto. The recent spate of acquisitions and collaborations has strengthened NVS’ pipeline.
Huge Price Upside Potential for NVS Stock
Novartis has expected revenue and earnings growth rates of 5.2% and 10.3%, respectively, for 2025. The Zacks Consensus Estimate for 2025 earnings has improved 2.9% over the last 60 days.
The average short-term price target of brokerage firms represents an increase of 26.1% from the last closing price of $97.11. The brokerage target price is currently in the range of $120 to $125. This indicates a maximum upside of 28.7% and no downside.
Okta Inc.
Okta operates as an identity partner in the United States and internationally. OKTA offers a suite of products and services used to manage and secure identities, such as Single Sign-On, which enables users to access applications in the cloud or on-premises from various devices.
OKTA’s Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications, and data, while API Access Management enables organizations to secure APIs.
Access Gateway enables organizations to extend Workforce Identity Cloud, and Okta Device Access enables end users to securely log in to devices with Okta credentials. OKTA also provides Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization.
Excellent Short-Term Upside for OKTA Shares
Okta has an expected revenue and earnings growth rate of 7% and 4.9%, respectively, for the next fiscal year (ending January 2026). The Zacks Consensus Estimate for next-year earnings has improved 2.5% in the last 30 days.
The average short-term price target of brokerage firms represents an increase of 26.3% from the last closing price of $83.28. The brokerage target price is currently in the range of $75 to $140. This indicates a maximum upside of 68.1% and a downside of 9.9%.
Booz Allen Hamilton Holding Corp.
Booz Allen Hamilton Holding offers a solid investment option for those seeking stability, as the business is driven by long-term government contracts, and a strong reputation in defense and cybersecurity. BAH’s focus on operational efficiency, and investments in artificial intelligence and cybersecurity have positioned it for sustainable growth.
BAH is benefiting from its Vision 2020 strategy, which has accelerated organic revenue growth, strengthened its profitability and fetched significant headcount and backlog growth. BAH’s VoLT strategy focuses on integrating velocity, leadership and technology in the process of transformation.
Massive Short-Term Upside for BAH Stock
Booz Allen Hamilton Holding has an expected revenue and earnings growth rate of 12.6% and 13.6%, respectively, for the current year (ending March 2025). The Zacks Consensus Estimate for current-year earnings has improved 5% in the last 60 days.
The average short-term price target of brokerage firms represents an increase of 28% from the last closing price of $131.19. The brokerage target price is currently in the range of $140 to $210. This indicates a maximum upside of 60.1% and no downside.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
