We recently compiled a list of the 12 Best S&P 500 Stocks to Invest in According to Analysts. In this article, we are going to take a look at where Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) stands against the other S&P 500 stocks.
2024 was a memorable year for the broad market index, which posted a gain of 23.31%, building on the 24.2% return in 2023. The two-year surge of over 53% is the best performance for the index since the 66% rally between 1997 and 1998.
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The stock market benefited from a resilient economy that avoided recession, declining interest rates, and waning inflation. Analysts are projecting continued growth in 2025 amid strong economic data and optimism about a business-friendly Trump administration returning to power.
The broader market rose 0.5% on January 23, going past its peak in December to a new record high. The gain added to the week-long winning momentum after data showed inflation slowing in the country more than economists had anticipated. With this rise, the index is up 4% since the start of the year.
Investor sentiment has also been bolstered with President Trump reiterating his commitment to lowering oil prices and further cutting interest rates. The 78-year-old is also taking his time over tariffs by holding them off until February. Analysts believe a less aggressive approach than some had expected has helped the market move higher. Here is what Larry Tentarelli, chief technical strategist at the Blue Chip Daily Trend Report, had to say:
“He really can’t control interest rates, but the market likes to hear that kind of stuff. So far, the market does seem to like what Trump’s policies are going to be, so we’ll just have to see if there’s some follow-through.”
A string of strong corporate earnings reports has also supported the gains in January. According to data from FactSet, earnings for companies listed on the index are on track to grow by over 12% for the fourth quarter compared to the same period in the prior year. If that happens, this would mark the best quarter for company profits since 2021.
While the overall outlook for the stock market looks encouraging, analysts are also cautious about the rally having gone too far, and a correction is in the offing this year. The threat of fierce trade wars sparked by tariffs, ongoing geopolitical conflicts, and broader inflationary pressures could also hurt the market.
Jurrien Timmer, Director of Global Macro for Fidelity Management & Research Company wrote the following in a note on December 18.
“Personally, I am bullish on stocks for 2025, though with valuations high and the bull market maturing, I don’t think investors should expect quite such spectacular returns next year as we have seen this past year. And I think there are important risks from inflation, and the market’s concentration, to be aware of.”
Methodology
For this article, we went through the list of large cap stocks on the broader market index and picked the top 12 with the highest average share price upside potential. All data is as of the close of the day on Friday, January 31, 2025. The stocks are listed in ascending order of their share price upside potential.
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 pharmacist in a lab coat carefully analyzing a vial of medicine for its quality.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Average Share Price Upside Potential as of January 31: 50.85%
Market Cap: $73.95 billion
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is an American biotechnology company that is focused on developing and commercializing medicines for patients with a range of diseases, including eye, cancer, cardiovascular, metabolic, and neurological conditions.
During its recent Q3 2024 earnings call on October 31, the company announced that it has around 40 programs in clinical development, with pivotal data for itepekimab in COPD expected in 2025. Revenue for the quarter was posted at $3.7 billion, up 11% from last year, driven by a robust performance across its product portfolio. It was another strong quarter for Dupixent – a drug for inflammatory diseases that it develops with Sanofi – which saw a 24% year-over-year surge in global revenue.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) generated around $2.6 billion in free cash flow during the first nine months of 2024 and ended the quarter with $15.6 billion of cash and marketable securities less debt. The company also repurchased $1.6 billion of shares during the first nine months, including $738 million in Q3.
Wall Street analysts are bullish on the stock, with a consensus Buy rating and an average share price upside potential of 47.45%. Investor sentiment also remains strong. Baron Health Care Fund stated the following regarding Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) in its Q3 2024 investor letter:
“We purchased Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), a biopharmaceutical company that was built on a foundation in basic scientific research and antibody development. The company has successfully developed several blockbuster medicines, including Eylea and Eylea HD for retinal diseases (such as wet age-related macular degeneration, diabetic macular edema, and diabetic retinopathy) and Dupixent for immunological and inflammatory diseases (such as atopic dermatitis, asthma, and COPD). While Eylea is nearing the end of its patent life and faces potential biosimilar competition, the company has been transitioning patients to Eylea HD, which is a higher dose, longer-acting formulation of Eylea, and Dupixent is growing rapidly through indication expansion. Beyond the current product portfolio, Regeneron has an exciting new product pipeline with over 35 candidates in various stages of development, including a novel treatment for treating severe food allergy, a combination checkpoint inhibitor therapy for melanoma, lung cancer and other solid tumors, biospecific antibodies for blood cancers, and Factor XI antibodies for blood clot prevention, among others. Based on Regeneron’s track record of success discovering and developing new drugs, we are optimistic the pipeline will deliver some successes, which we think will drive upside in the stock.”
Overall REGN ranks 9th on our list of the best S&P 500 stocks to invest in according to analysts. While we acknowledge the potential of REGN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than REGN 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.