We recently compiled a list of the 14 Best 52-Week High Stocks To Buy According to Analysts. In this article, we are going to take a look at where Eton Pharmaceuticals, Inc. (NASDAQ:ETON) stands against the other stocks.
After two years of substantial gains to record highs, exhaustion in the US equity markets is slowly kicking in. Pullbacks in various sectors have come into play amid growing concerns about overstretched valuations. Likewise, the pullbacks have come on bond yields surging to levels not seen in two months, triggering a selloff in growth-oriented stocks.
The 10-year yield touching highs of 4.79% has once again triggered demand for bonds at the expense of stocks, given the yields on offer. Additionally, the surge in bond yields comes on stronger-than-expected jobs reports that cast doubt on further interest rate cuts. The stock market rallied to record highs last year amid expectations that the Fed will embark on an aggressive easing push that involves interest rate cuts.
A spike in inflation levels amid a resilient US job market has once again averted the prospects of the Fed aggressively cutting interest rates. Consequently, the global rise in bond yields around the globe is being driven by expectations of fewer than expected interest rate cuts.
READ ALSO: 10 Best Blue Chip Stocks to Buy for 2025 and Billionaire Israel Englander’s Top 10 Stock Picks Heading Into 2025.
“With the 10-year yield potentially getting to 5%, I think it’s going to be very hard for the equity market to really gain any meaningful traction here until there’s — at minimum — stability in interest rates,” said Adam Turnquist, chief technical strategist at LPL Financial.
The sentiments echo serious concerns about stocks trading at 52-week highs after blockbuster moves last year. Given that valuations at 52-week highs often appear overstretched, there are growing concerns that some of the stocks could be the subject of significant pullbacks. Amid the concerns, Turnquist does not see the prospect of the market edging into bear territory even though the market appears to be in a correction phase.
Analysts at Goldman Sachs are also bullish about the equity market’s outlook and believe there is not enough reason to back away from investing. Additionally, the analysts don’t expect 2025 to be a problematic year for equity investments.
“Valuations are not a good timing signal. … There’s no clear relationship between your starting valuation and the returns one year later,” Brett Nelson, head of tactical asset allocation for the group, said
Goldman Sachs analysts expect the US economy to grow faster than Europe in 2025. A resilient US economy amid high interest rates should fuel stellar financial results characterized by revenue and earnings growth.
“We do think that the earnings advantage that the U.S. has will continue,” said Sharmin Mossavar-Rahmani, chief investment officer for the Goldman unit.
The prospect of the US economy staying clear of recession even with the Fed leaving interest rates at current levels should offer much-needed support to stocks trading at all-time highs. Analysts also expect friendly regulations and deregulation from the upcoming Republican administration to act as a tailwind to fuel further gains in the equity markets.
Our Methodology
To make the list of best 52-week high stocks to buy according to analysts, we scanned various screeners focusing on stocks trading close to their 52-week highs. We then settled on stocks trading close to 52-week highs (0-10% below high), which analysts believe boast of 25% or more upside potential as of January 14, owing to their solid underlying fundamentals. Finally, we ranked the stocks in ascending order based on their upside potential.
At Insider Monkey, we are obsessed with 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).
A biochemist in a laboratory performing research and development on a specialty pharmaceutical.
Eton Pharmaceuticals, Inc. (NASDAQ:ETON)
52 Week Range: $3.03 – $15.00
Current Share Price: $13.42
Stock Upside Potential: 31.77%
Number of Hedge Fund Holders: 8
Eton Pharmaceuticals, Inc. (NASDAQ:ETON) is a specialty pharmaceutical company that develops, acquires, and commercializes pharmaceutical products for rare diseases. It offers ALKINDI SPRINKLE, a replacement therapy for adrenocortical insufficiency. The stock exploded in 2024, rallying by 228%. The rally to 52-week highs came as the market reacted to an aggressive acquisition drive as the company continued to strengthen its product portfolio.
In addition, the stock has been trading higher owing to stellar financial results. Eton Pharmaceuticals, Inc. (NASDAQ:ETON) delivered a 15th consecutive quarter of revenue growth, with product sales increasing by 40% in the third quarter to $9.8 million. Eton has also moved to strengthen its revenue base with plans to acquire 10 commercial products with the prospects of generating $100 million in revenue in the rare disease portfolio.
As part of its acquisition drive, Eton Pharmaceuticals, Inc. (NASDAQ:ETON) has agreed to acquire US rights to Amglidia, a treatment developed for neonatal diabetes mellitus. The acquisition aligns with the company’s bid to strengthen paediatric endocrinology. In addition, it has completed the asset purchase of Increlex®, a biologic product used to treat pediatric patients 2 years of age and older struggling with insulin-like growth factor 1 deficiency (SPIGFD). ETON also plans to start commercializing Galzin, an FDA-approved maintenance treatment for patients with Wilson’s disease who have been initially treated with a chelating agent, as it looks to strengthen its revenue streams.
Overall ETON ranks 9th on our list of the best 52-week high stocks to buy according to analysts. While we acknowledge the potential of ETON as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ETON but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.