We recently compiled a list of the 12 Stocks That Will Double in 2025. In this article, we are going to take a look at where Cosan S.A. (NYSE:CSAN) stands against the other stocks that will double in 2025.
The Fed’s Probable Path and its Impact on Earnings
A lot is happening in the market, especially within the growth sectors. The launch of DeepSeek has caused significant uproar across the tech market in the United States, and with key names reporting earnings this week, investors are uncertain about how the market is going to play out in 2025. On top of that, the question mark on the Fed’s future actions poses yet another blow to investor sentiment. On January 30, Jim Bullard, former St. Louis Fed president, joined Market Domination on Yahoo Finance to discuss his market thesis amid the Fed’s decisions to keep rates steady.
Bullard suggested that the Fed has been signaling a slowdown in the easing cycle for the past 90 days and that the current situation is not unexpected. Speaking of voting changes, Bullard stated that this decision was more like an open-shut case meaning that any voting changes would have made no difference in the decision to keep rates steady. While some regard the Fed’s decision of a 100 basis point cut as hasty and “too much”, Bullard remains persistent that it was the “right call” and a step in the right direction.
As for the current policy rate, Bullard emphasized that the Fed is in great shape to keep rates steady and must wait for inflation data before any decisions have been made. He added that if inflation is sticky at where “it is right now” then a rate cut in 2025 is highly unlikely. On the flipside, he suggested that if inflation begins to rise again, the Fed may raise rates again.
Similarly, on January 29, Stuart Kaiser, head of US equity trading strategy at Citi, appeared in an interview on Yahoo Finance to shed light on the tech landscape and how the earnings may be impacted due to the Fed’s decision. Kaiser emphasized that the earnings season is very important, but the commentary of CEOs is more crucial at this point. He suggested, that CEOs will have to explain their capital expenditures and the value they expect to derive from these hefty expenses to garner positive investor sentiment.
While Kaiser is still positive about the sector, he stated that he is not an aggressive buyer and will likely remain cautious. He added that to circle back to buying into the sector, the need for market clarity is more crucial than ever, reiterating that commentary from CEOs is necessary. He also suggested that the DeepSeek development is huge for the AI market and puts pressure on only a handful of companies in the sector. While he remained cautiously bullish on the tech sector, he shared concern over utilities not being able to recover as much with a lack of incremental buying, despite having significant energy demand from AI use-cases.
Speaking of the Fed’s meeting, Kaiser suggested that the updated economic data has been in line with their forecasts, and while the decision matters, from a data perspective there is not much to say. Despite market volatility, some stocks are expected to perform exceptionally well in 2025 due to their exemplary positions in their respective industries.
Our Methodology
We used similar rankings on the internet to come up with a list of names expected to double in 2025. We only focused on companies with a market cap of at least $2 billion. We then examined the analyst upside surrounding 25 stocks and picked the 12 stocks with an upside of at least 100%, as of January 29, 2025. We have also included the hedge fund sentiment around each stock, as of Q3 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A petrol tanker truck refueling a highway service station, highlighting the fuel distribution arm of the company.
Cosan S.A. (NYSE:CSAN)
Analyst Upside as of January 29, 2025: 161%
Number of Hedge Fund Holders: 11
Cosan S.A. (NYSE:CSAN) is a natural gas distribution company that produces bioethanol, sugar, and energy. The company’s portfolio consists of 35 bioenergy parks, 14km of railway lines, 306 million hectares of land across 8 states, and a 25 million kilometers gas distribution network. CSAN also has a production capability of 3 billion liters of ethanol and a crushing capacity of 105 million tonnes of sugarcane across its 35 bioenergy complexes. The company is among the largest fuel distributors of fuel and producers of ethanol in Brazil.
Over the past few months, the company has shown incredible resilience against uncertain macroeconomic conditions, generating R$293 million in net income in the third quarter of 2024. To tackle market volatility and high future interest rates, the company has shifted its focus on managing its debt effectively and prioritizing strategic projects. To manage and reduce its gross debt, Cosan S.A. (NYSE:CSAN) eliminated amortization between 2024 and 2026. The company ended the quarter with results in line with its plans for the fiscal year and is actively implementing strategies to improve its financial position in 2025, explaining why analysts are bullish on the stock. Analysts’ median price target of $13.55 represents an upside of 161% from current levels.
Overall CSAN ranks 3rd on our list of the stocks that will double in 2025. While we acknowledge the potential of CSAN as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CSAN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
