In this article, we will take a look at 10 stocks with 50% upside potential according to analysts. To skip our analysis of the recent market activity, you can go directly to see the 5 Stocks with 50% Upside Potential According to Analysts.
This year turned out to be one of the strongest rallies in the US equity market, with technology, communication services, and consumer discretionary stocks notching significant gains in 2023. As of the end of November, the S&P 500 was already up by about 21%, outperforming its average annual return of about 10%.
The tech-heavy Nasdaq index is already up by more than 35% for the year, supported by the artificial intelligence frenzy that has seen most tech stocks rally by double-digit percentage points. It is a sharp contrast from the bear run in 2022 that saw the S&P 500 drop by 19% as the NASDAQ came under pressure and plunged 33%.
The US stock market recorded its best month of the year in November, breaking a three-month streak of decline in the third quarter. The S&P 500 fell 3.7%, and the NASDAQ dropped 3% as concerns that the Federal Reserve will continue to raise interest rates blighted the markets. Analysts were also wary that rising interest rates would trigger a recession and crater the stock market.
As the fears subsided, the NASDAQ rallied 10% in November and the S&P 500 by 9%, recording the best monthly gains since October 2022. One key factor that has helped support the impressive run in the market is a shift of focus from rising interest rates.
High-growth cyclical technology telecom and consumer discretionary have been the top-performing stocks on inflationary pressure subsiding significantly. In addition, the stocks have seen their sentiment and fortunes improve amid the rate cut talk. On the other hand, defensive sectors like utilities, healthcare, and consumer staples have lagged, given the high demand for risk in the market.
Similarly, the overall stock market rally has been buoyed by large-cap stocks led by NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:META), Amazon.com Inc (NASDAQ:AMZN), and Tesla, Inc. (NASDAQ:TSLA).
Many analysts are expecting another annual gain heading into 2024. Analysts at Bank of America, BMO Capital, and Deutsche Bank have been the most vocal, reiterating that the S&P 500 will advance again in 2024.
Even as strategists at Goldman Sachs and Societe Generale remain conservative, they believe the overall market will edge higher in 2024, even if it remains shy of its previous peak. Expectations are high that the S&P 500 will power through the 5,000 level, especially on the Fed cutting interest rates and the economy avoiding recession.
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Our Methodology
Most analysts are overly optimistic about the stock market outlook heading into 2024. After analyzing analysts’ top stock picks, we have compiled a list of large-cap stocks with 50% upside potential.
10. ZTO Express (Cayman) Inc. (NYSE:ZTO)
Market Capitalization as of December 8: $17.41 Billion
Stock Upside Potential: 50%
Number of Hedge Fund Holders: 21
ZTO Express (Cayman) Inc. (NYSE:ZTO) is an industrial company that provides express delivery and other value-added services. ZTO Express (Cayman) Inc. (NYSE:ZTO) offers freight forwarding and delivery services for e-commerce and traditional merchants.
While ZTO Express (Cayman) Inc. (NYSE:ZTO) has underperformed, going down 22% for the year, analysts on Wall Street rate it as a Buy. The company has a $31.97 price target, implying a 50% upside potential from current levels.
According to Insider Monkey’s third-quarter database, 21 hedge funds were bullish on ZTO Express (Cayman) Inc. (NYSE:ZTO), compared to 25 funds in the prior quarter. Kerr Neilson’s Platinum Asset Management is the company’s largest stakeholder, with 14.31 million shares worth $345.99 million.
9. Li Auto Inc. (NASDAQ:LI)
Market Capitalization as of December 8: $35.06 Billion
Stock Upside Potential: 51%
Number of Hedge Fund Holders: 28
Headquartered in Beijing, Li Auto Inc. (NASDAQ:LI) is a company that designs, develops, manufactures, and sells new energy vehicles. Li Auto Inc. (NASDAQ:LI) is a leading electric vehicle company that sells premium smart electric vehicles.
Li Auto Inc. (NASDAQ:LI) has been one of the high-flying EV companies, having delivered a record 41,000 units in November, up 2.7x compared to last year. The company is seeing robust demand for EV cars, which combine gasoline generators with batteries. While Li Auto Inc. (NASDAQ:LI) is up by about 66% for the year, analysts rate the stock as a Buy with a $53.75 price target, implying 51% upside potential.
Out of 910 hedge funds profiled by Insider Monkey at the end of the third quarter of 2023, 28 had stakes in Li Auto Inc. (NASDAQ:LI). The largest stakeholder was John Overdeck and David Siegel’s Two Sigma Advisors, which owned about 6.74 million shares of Li Auto Inc. (NASDAQ:LI) valued at $240.26 million.
8. Trip.com Group Limited (NASDAQ:TCOM)
Market Capitalization as of December 8: $21.26 Billion
Stock Upside Potential: 53%
Number of Hedge Fund Holders: 42
Trip.com Group Limited (NASDAQ:TCOM) is another top stock for anyone eyeing exposure in the Chinese travel industry. The company is a travel service provider offering accommodation reservations, transportation ticketing package tours, and corporate travel management. Trip.com Group Limited (NASDAQ:TCOM) offers integrated transportation and accommodation services, destination transportation and ticket, activity, insurance, visa, and tour guide services.
Analysts rate Trip.com Group Limited (NASDAQ:TCOM) as a Buy even though it is down by 5% year to date. Its consensus average price target on Wall Street is $50.81, implying a 53% upside potential.
As of September 2023 end, 42 out of the 910 hedge funds tracked by Insider Monkey were Trip.com Group Limited (NASDAQ:TCOM)’s investors. Gregard Heje’s Kontiki Capital owns the biggest stake among these which is worth $160.42 million.
7. JD.com, Inc. (NASDAQ:JD)
Market Capitalization as of December 8: $41.77 Billion
Stock Upside Potential: 53%
Number of Hedge Fund Holders: 53
JD.com, Inc. (NASDAQ:JD) is a Chinese consumer cyclical investment play that offers supply chain-based technologies and services. The company provides computers, communication, and consumer electronic products. JD.com, Inc. (NASDAQ:JD) also provides online marketplace services for third-party merchants, marketing services, and Omni channel solutions to customers and offline retailers.
JD.com, Inc. (NASDAQ:JD) has seen its fortunes turn sour, going by the 53% slide year to date. Amid the slide, analysts on Wall Street rate the stock as a Buy with a $40.49 price target, implying a 50.35% upside potential. The bullish sentiments also stem from JD.com, Inc. (NASDAQ:JD) offering a 2.30% dividend yield, ideal for generating passive income.
During this year’s September quarter, out of the 910 hedge funds profiled by Insider Monkey, 53 were the firm’s shareholders. JD.com, Inc. (NASDAQ:JD)’s largest hedge fund investor in our database was Chase Coleman and Feroze Dewan’s Tiger Global Management LLC via a $287.28 million investment.
Here is what Baron Funds, an investment management company said about JD.com, Inc. (NASDAQ:JD) in its first quarter 2023 investor letter:
“JD.com, Inc. (NASDAQ:JD) is one of the three largest e-commerce platforms in China. Shares declined after the company reported a slowdown in fourth quarter sales and commented that deliberate culling of unprofitable SKUs would also be a drag on headline revenue growth in the first half of 2023. We believe the slowdown was driven by the peak in Chinese COVID lockdowns, which have since ended, and the elimination or reduction of unprofitable business is better for long-term margins and returns on capital. We remain investors.”
6. Cenovus Energy Inc. (NYSE:CVE)
Market Capitalization as of December 8: $30.50 Billion
Stock Upside Potential: 53%
Number of Hedge Fund Holders: 41
Cenovus Energy Inc. (NYSE:CVE) is an energy company that produces, refines, transports, and markets crude oil and natural gas. Cenovus Energy Inc. (NYSE:CVE)’s oil sands segment develops and makes bitumen and heavy oil, while the conventional segment holds natural gas liquids and natural gas assets.
While Cenovus Energy Inc. (NYSE:CVE) is down by about 15% year to date, it yields 2.5%, offering an effective way of generating passive income. Cenovus Energy Inc. (NYSE:CVE) boasts of an average Strong Buy with an average price target of $24.60, implying a 53% upside potential.
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Disclosure: None. 10 Stocks with 50% Upside Potential According to Analysts is originally published on Insider Monkey.
