Making sense of market moves
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You’ve probably done enough holiday shopping at this point to last you a lifetime. But how about bargain hunting for some stocks?
Sure, we highlighted the sectors that analysts think will take off in 2025—but within those broader themes, where are the undervalued opportunities?
Despite Brew Markets’ omnipresent awareness of everything in the world, we still defer to the experts when it comes to stock picks. Morningstar highlighted a few names that are undervalued based on their current valuations, some of which include:
- Devon Energy: “We view Devon as a steady, low-cost provider whose assets are on the low end of the US shale cost curve,” wrote Chief US Strategist for Morningstar David Sekera. Its average price target among analysts who cover the stock is $50—52% higher than shares trade today.
- Dow: “As a commodity chemicals producer, Dow’s results are subject to high operating leverage where a small increase in volumes would have a large impact on profits,” explained Sekera. Its average price target is $53, 32% higher than where shares trade now.
- “We also see a number of idiosyncratic opportunities where we don’t think the market is correctly valuing the value of drug markets pipelines such as Bristol-Myers, Amgen, and Gilead,” added Sekera.
Goldman Sachs also shone a spotlight on a few of its own top picks, including:
- Fluence Energy: Despite being down 30% in 2024, its average price target among analysts who cover the stock is $26—nearly 64% higher than where shares trade today.
- Enphase Energy: Goldman analysts see upside for the solar company, despite shares declining a staggering 43% over the past year. The average price target on the stock is $94—almost 37% higher than shares trade now.
- Advanced Micro Devices: Even though the stock declined about 8% in 2024, its average price target is $184, 52% higher than shares trade now. But not everyone is as optimistic about the stock: BofA recently downgraded AMD from “buy” to “neutral.”
Keep in mind: These are analysts’ best ideas based on valuations and fundamentals, but no matter how good of an investor you are, it’s still incredibly difficult to nail exactly which stocks are going to rise over the course of an entire year. At the end of the day, staying broad among key sectors will give you a better chance of long-term gains.
Just listen to Mark Haefele, CIO of Global Wealth Management at UBS: “As we consider a wider range of market outcomes ahead, the unpredictability of this decade so far should remind us of the importance of humility and market diversification."—LB