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 Genmab A/S (NASDAQ:GMAB) 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 close-up of a security analyst using a calculator, reviewing stocks.
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).
Genmab A/S (NASDAQ:GMAB)
5-Year Revenue Growth: ~40.3%
Average Upside Potential: ~63.04%
Market cap as of 12 November: $14.5 billion
Genmab A/S (NASDAQ:GMAB) is engaged in developing antibody therapeutics for the treatment of cancer and other diseases primarily in Denmark.
In a significant move to further strengthen its position, Genmab A/S (NASDAQ:GMAB) completed a $1.8 billion acquisition of ProFound Bio. This was a strategic decision targeted at enhancing its market position and expanding its technological capabilities. Experts remain optimistic about this acquisition as the transaction provided Genmab A/S (NASDAQ:GMAB) worldwide rights to ProfoundBio’s portfolio of next-generation ADCs, further strengthening its clinical pipeline.
Additionally, the transaction provided the company with access to ProfoundBio’s novel ADC technology platforms. These complement Genmab A/S (NASDAQ:GMAB)’s already validated suite of proprietary technology platforms. The combination of technology platforms of both companies might create new opportunities to garner and develop new medicines with the potential to transform the treatment of cancer and improve patients’ lives.
The analysts believe that Genmab A/S (NASDAQ:GMAB)’s antibody therapeutics have placed it as a significant player in the field, with products such as Darzalex achieving commercial success. Moreover, the recent launch of Epkinly (epcoritamab) should act as a potential game-changer. Notably, this can become a backbone in diffuse large B-cell lymphoma (DLBCL) treatment. This places Genmab A/S (NASDAQ:GMAB) favorably against competitors in the lymphoma space.
Genmab A/S (NASDAQ:GMAB)’s continued innovation in antibody therapeutics is expected to lead to breakthrough treatments and should help it sustain a competitive edge. Analysts at BMO Capital Markets reissued an “Outperform” rating on the company’s shares, setting a price target of $48.00 (up from $46.00) on 8th November 2024.
Overall, GMAB ranks 3rd on our list of 12 High Growth Large Cap Stocks to Buy Now. While we acknowledge the potential of GMAB 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 GMAB 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.