We recently published a list of 12 High Growth Large Cap Stocks to Buy Now. In this article, we are going to take a look at where BeiGene, Ltd. (NASDAQ:BGNE) stands against other high growth large cap stocks.
BlackRock highlighted that its portfolio managers are broadly optimistic about US equities. Its portfolio managers opine that there is still some expected upside potential, despite the steep US stock valuations. However, the contrast between lagging European economic growth, and stock performance, is stark. The US Fed decided to reduce the policy rate by another 25 bps in a recent meeting as the apex bank sees inflation moving closer to its target of 2%.
However, the financial conditions remain loose after a historically sharp tightening cycle. The firm believes that such an unusual backdrop strengthens its view that the environment is being dominated by structural forces and not by a typical business cycle.
Overall, the firm remains overweight on the US given the positive view on the AI theme. The valuations for AI beneficiaries have strong backing as technology companies continue to beat high earnings projections. The asset manager believes that falling inflation continues to ease pressure on corporate profit margins.
High-Single Digit Growth in S&P 500
Goldman Sachs Research’s projections for the S&P 500 Index of stocks remain broadly the same as it was before Trump’s win. As per David Kostin, the chief US equity strategist at the firm, the S&P 500 is expected to reach 6,300 in the upcoming 12 months. The researchers expect growth in EPS of 11% in 2025 and 7% in the following year. That being said, David Kostin highlighted that the estimates might change as and when the new administration’s policy agenda gets revealed. Overall, strong earnings growth is expected to fuel continued equity market appreciation into next year.
Historically, the S&P 500 index generated a median return of 4% between election day in November and calendar year-end, as per Goldman Sachs. Together with the resilience in broader economic growth data and the expectation for further rate cuts, the near-term outlook for US equities remains healthy, as per Kostin.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
US Tariffs’ Impact
Several investors remain focused on trade policy, and Mr. Trump might have plans to implement some of the tariffs without legislation. Goldman Sachs believes that Trump will impose tariffs on imports from China. These are expected to average an additional 20 percentage points. Furthermore, European companies can face tariffs. The large investment bank also highlighted that, during Trump’s previous administration, domestic-facing and defensive industries, including utilities, telecom services, and real estate, outperformed. On the other hand, the stocks of automobiles, capital goods, and technology hardware underperformed.
The company believes that M&As might increase under Trump’s presidency. Though the policy uncertainty will take time to recede, there are expectations that antitrust regulation will be more relaxed. Moreover, the continued economic expansion and higher confidence among CEOs might result in increased corporate combinations. Approximately, $4 trillion of corporate spending in the next calendar year might roughly get evenly split between returning cash to shareholders and growth investments (such as CapEx, R&D, and M&A).
A graph plotting the trends and performance of stocks on the public equity markets.
Our Methodology
To list the 12 High Growth Large Cap Stocks to Buy Now, we sifted through several online rankings and a screener. We extracted the stocks that have a healthy 5-year revenue growth and a market cap of more than $10 billion. Finally, the stocks were ranked in ascending order of upside potential, as of 12th November.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
BeiGene, Ltd. (NASDAQ:BGNE)
5-Year Revenue Growth: ~48.1%
Average Upside Potential: ~45.6%
Market cap as of 12 November: $20.5 billion
BeiGene, Ltd. (NASDAQ:BGNE) is an oncology company, which is engaged in discovering and developing various treatments for cancer patients in the US and internationally.
BeiGene, Ltd. (NASDAQ:BGNE)’s in-house clinical operations team carries out trials throughout 5 continents, ensuring rigorous data quality via collaborations with regulators and investigators in more than 45 countries. This strategic approach tends to maximize resources by channeling data-gated investments into promising clinically differentiated candidates quickly and de-prioritizing others.
BeiGene, Ltd. (NASDAQ:BGNE)’s unique R&D and clinical advantages, together with the tremendous launch trajectory of BRUKINSA, should continue to strengthen the company’s global oncology leadership. In the US, BRUKINSA, with the broadest label of any BTK inhibitor, is the leader in new patient starts in both frontline and relapsed/refractory (R/R) CLL in addition to other approved B-cell malignancies.
In the solid tumor area, BeiGene, Ltd. (NASDAQ:BGNE) continues to expand its access to the PD-1 inhibitor, TEVIMBRA, for patients worldwide and is building global commercial capabilities to aid its prolific pipeline of potential cancer medicines.
BeiGene, Ltd. (NASDAQ:BGNE) has been laying the foundation for future franchises in breast, lung, and gastrointestinal cancers across 3 signature platform technologies such as multi-specific antibodies, protein degraders, and antibody-drug conjugates. Also, strategic partnerships with industry giants such as Amgen and Novartis fueled the commercial capabilities. In Q3 2024, it saw revenues of $1,002 million as compared to $781 million in the same period of 2023. This increase mainly stemmed from growth in BRUKINSA product sales in the US and Europe of 87% and 217% respectively.
Citigroup upped its price objective on shares of BeiGene, Ltd. (NASDAQ:BGNE) from $269.00 to $288.00, giving a “Buy” rating on 8th August. Baird Asset Management controlled Chautauqua Capital Management, a boutique investment firm, released the third-quarter 2024 investor letter. Here is what the fund said:
“BeiGene, Ltd. (NASDAQ:BGNE) is expected to have excellent top- and bottom-line growth over the next several years, driven by Brukinsa, their best-in-class product in several hematology cancers, with a global market size of approximately $9 billion in 2023. Even though the company is truly global in nature, incorporated in Switzerland and headquartered in Basal, Beijing, and Cambridge, MA, its valuation was depressed due to negative sentiment towards China, as it does have a large R&D and sales team in China. The recent rally in China stocks has somewhat reduced the extreme pessimism seen earlier in the year.”
Overall, BGNE ranks 4th on our list of 12 High Growth Large Cap Stocks to Buy Now. While we acknowledge the potential of BGNE as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than BGNE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.