In this article, we will discuss the 10 Best Beaten Down Stocks to Buy According to Analysts.
JPMorgan released a market update where it highlighted the US Fed’s recent decision to keep the rates unchanged. Also, the US Fed decreased the growth forecasts and increased the near-term inflation expectations. The futures markets are pricing 2 interest rate cuts this year and a ~50% chance of the third cut. Jose Torres, Senior Economist at Interactive Brokers, believes that stocks are being impacted as slowdown worries continue to pressure the outlook for broader corporate earnings growth. According to him, investors continue to pile up shares in the defensive consumer staple, utilities, and healthcare segments and the real estate and energy areas.
What Lies Ahead as Q1 2025 Approaches its End?
Reuters reported that analysts have been turning more cautious about the US corporate earnings for Q1 2025, as Trump’s policies continue to threaten to trigger a global trade war that can impact the broader economic growth. Reuters, while quoting Tajinder Dhillon (senior research analyst at LSEG), noted that S&P 500 forecasts for Q1 2025 have declined by 4.5 percentage points since January 1. Notably, this has been the largest downward revision since Q4 2023.
The earnings growth for the S&P 500 companies is expected at 7.7% YoY, marking the lowest since Q3 2023 as well as a significant decline from 17.1% in Q4 2024. The worries related to the import tariffs and retaliation by US trade partners, together with the government cutbacks, can push the broader economy into recession have witnessed an increase over the past few weeks, reported Reuters.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
What’s Next for the S&P 500?
CNBC, while quoting Scott Wren (senior global market strategist at the Wells Fargo Investment Institute), stated that numerous uncertainties can negatively impact the broader stock market, such as tariffs as well as a potential rebound in inflation. Furthermore, an increase in bond yields can also pose a headwind, as per Wren. Notably, increased yields can impact the demand for US stocks.
That being said, a favorable backdrop of healthy economic growth and consumer spending, together with relatively low unemployment, can help the S&P 500 to deliver ~12% in 2025. As per Wren, this would be marginally higher than the long-term historical average. The strategist thinks that the investors are required to be optimistic.
Amidst these trends, let us now have a look at the 10 Best Beaten Down Stocks to Buy According to Analysts.
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Our Methodology
To list the 10 Best Beaten Down Stocks to Buy According to Analysts, we used a screener and shortlisted the stocks that are trading close to their respective 52-week lows and that analysts see significant upside to. Next, the stocks were arranged in ascending order of their average upside potential, as of March 21. We also mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Beaten Down Stocks to Buy According to Analysts
10. Sealed Air Corporation (NYSE:SEE)
Stock Price as of March 21: $29.10
Average Upside Potential: ~32.3%
52-week Low: $28.67
Number of Hedge Fund Holders: 40
Sealed Air Corporation (NYSE:SEE) offers packaging solutions. Truist Securities reiterated a “Buy” rating on the company’s stock, maintaining a price objective of $44.00. The analysts mentioned the company’s strong performance in the Food division, and expect a significant positive change in the Protective division. Sealed Air Corporation (NYSE:SEE)’s emphasis on its turnaround efforts, mainly in the Protective segment, seems to be gaining traction, which supports Truist Securities’ confidence in the company’s prospects. This, together with the growth in the Food sector, can fuel its performance.
Sealed Air Corporation (NYSE:SEE)’s emphasis on value-added products and automation-friendly solutions can support in maintaining or expanding its presence in critical markets. By addressing the customer needs for efficiency and sustainability, the company can establish new growth vectors. Sealed Air Corporation (NYSE:SEE) remains focused on maximizing the potential of each business based on their respective end markets and portfolios. It continues to accelerate the momentum in Food by expanding further into higher growth end-markets with the case ready and fluids solutions, while continuing to stabilize Protective.
Heartland Advisors, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Investors seem to be chasing momentum in Industrials, as evidenced by passive flows into sector ETFs, while showing little interest in packaging stocks, a subsector of materials. Throughout the year, we have been paying particularly close attention to possible opportunities within packaging in anticipation of renewed interest.
One leading producer, Sealed Air Corporation (NYSE:SEE), a global packager, caught our attention. After thorough research, we determined SEE was mispriced by Wall Street, selling substantially below its intrinsic worth and less than half the market’s price/earnings ratio.”
9. Omnicom Group Inc. (NYSE:OMC)
Stock Price as of March 21: $81.14
Average Upside Potential: ~34.1%
52-week Low: $78.69
Number of Hedge Fund Holders: 36
Omnicom Group Inc. (NYSE:OMC) provides advertising, marketing, and corporate communications services. The company and Interpublic announced that each company’s respective stockholders approved the former’s previously announced acquisition of Interpublic, with the companies remaining on track to complete the transaction in H2 2025. The combined company is expected to bring together the industry’s deepest bench of marketing talent, together with the broadest and most innovative services and products, fueled by the most advanced sales and marketing platform. Furthermore, Omnicom Group Inc. (NYSE:OMC)’s improved execution in recent years was the key driver of its strong performance.
The improved execution offers a healthy foundation for future growth as it allows Omnicom Group Inc. (NYSE:OMC) to capitalize on market opportunities more effectively as well as mitigate industry challenges with agility. Overall, the marketing and communications industry continues to experience rapid changes due to technological advancements, evolving client needs, and changes in consumer behavior. Omnicom Group Inc. (NYSE:OMC)’s ability to navigate such changes can help it achieve long-term growth. The company’s healthy organic growth and management’s confident outlook exhibit that it is well-placed to capitalize on emerging opportunities. As a result of the acquisition of Interpublic, Omnicom Group Inc. (NYSE:OMC) sees strong upside potential via expected revenue and cost synergies that can fuel growth.
8. ICON Public Limited Company (NASDAQ:ICLR)
Stock Price as of March 21: $184.8
Average Upside Potential: ~35.3%
52-week Low: $174.9
Number of Hedge Fund Holders: 46
ICON Public Limited Company (NASDAQ:ICLR) is a clinical research organization that is engaged in providing outsourced development and commercialization services. RBC Capital Markets has initiated coverage on the company’s stock, assigning an “Outperform” rating and setting a price objective of $263.00. The analysis hints at ICON Public Limited Company (NASDAQ:ICLR)’s significant role in supporting biopharmaceutical clients to expedite the drug market introduction via usage of its specialized data and technology capabilities, together with extensive global service offerings across the drug development process.
Michael Ryskin, an analyst from Bank of America Securities, maintained a “Buy” rating on the company’s stock. The analyst’s rating is backed by ICON Public Limited Company (NASDAQ:ICLR)’s robust competitive position and the relatively short-term nature of the headwinds it witnesses. Furthermore, the company’s strategic actions, including the stock buyback of $400 million in Q4 2024, reinforce the confidence in ICON Public Limited Company (NASDAQ:ICLR)’s long-term prospects, says Ryskin. The company’s cash management was robust in Q4 2024, resulting in the full-year FCF being in line with its targeted $1.1 billion.
Baron Funds, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“ICON Public Limited Company (NASDAQ:ICLR) is a leading contract research organization (CRO) that provides outsourced services to the biopharmaceutical industry. Shares fell on weak quarterly results and lowered 2024 guidance. Like other CROs, ICON is facing headwinds due to tighter management of R&D spend by pharmaceuticals, less biotechnology funding availability, a greater number of project delays and cancellations, and an industry shift in preferred business models from full to functional outsourcing. While we expect these headwinds will persist into at least the first half of 2025, we believe pharmaceutical R&D spend will continue to grow and global providers like ICON are well positioned to expand and gain share over time, returning to double-digit EPS growth. With the stock near all-time low valuations, we are holding.”
