MW These 10 most-loved S&P 500 stocks could see as much as 50% upside in 2025
By Philip van Doorn
Some of the highest-rated stocks are plays on rapid sales growth, but there are also value-oriented names on the list
A screen of Wall Street's favorite stocks in the S&P 500 includes familiar names, but a deeper look into valuations shows they are not all loved for the same reasons.
The following screen shows the stocks in the S&P 500 SPX that have the highest percentage of buy or equivalent ratings among analysts polled by FactSet. The data is presented in two tables to include valuations relative to consensus 2025 estimates for earnings and sales per share, as well as expected growth rates for those items.
We began by trimming the components of the large-cap U.S. benchmark index to 492 companies covered by at least nine analysts polled by FactSet. These are "sell-side" analysts - those who work for brokerage firms or for researchers who provide reports for brokers to share with their clients.
Among the 492 companies, these 10 have the highest percentage of buy or equivalent ratings among analysts polled by FactSet:
Company Ticker Share buy ratings Dec.10 price Consensus price target Implied 12-month upside potential 2024 total return through Dec. 10
Axon Enterprise Inc. AXON 100% $637.45 $606.92 -5% 147%
Delta Air Lines Inc. DAL 96% $62.77 $78.22 25% 58%
Microsoft Corp. MSFT 95% $443.33 $504.71 14% 19%
Amazon.com Inc. AMZN 94% $225.04 $237.63 6% 48%
Nvidia Corp. NVDA 92% $135.07 $172.97 28% 173%
Schlumberger Ltd. SLB 91% $40.87 $57.04 40% -19%
Micron Technology Inc. MU 91% $98.10 $147.25 50% 15%
Walmart Inc. WMT 90% $94.55 $98.88 5% 82%
GE Aerospace GE 90% $171.27 $212.93 24% 69%
Becton Dickinson & Co. BDX 89% $221.44 $276.54 25% -8%
Source: FactSet
You might need to scroll the table to see all of the data. Total returns for 2025 are in the right-hand column and they include reinvested dividends. Six of the 10 companies have had total returns this year exceeding the 28.2% return for the full S&P 500.
Leaving the companies in the same order, but with the S&P 500 added at the bottom of the table for comparison, let's look at valuation ratios and expected growth rates for earnings and revenue in 2025. The consensus estimates driving these figures are adjusted for the calendar year for companies (such as Microsoft $(MSFT)$ and Nvidia $(NVDA)$) whose fiscal years don't match the calendar.
Company Ticker Price/ est. 2025 EPS Price/ est. 2025 sales per share Expected 2025 EPS increase Expected 2025 revenue increase
Axon Enterprise Inc. AXON 101.6 19.0 22.3% 23.3%
Delta Air Lines Inc. DAL 8.5 0.7 21.3% 5.9%
Microsoft Corp. MSFT 31.4 11.0 13.2% 13.9%
Amazon.com Inc. AMZN 36.2 3.3 21.2% 10.9%
Nvidia Corp. NVDA 31.4 17.3 52.7% 55.1%
Schlumberger Ltd. SLB 11.2 1.5 7.1% 5.0%
Micron Technology Inc. MU 9.5 2.7 166.1% 38.6%
Walmart Inc. WMT 34.5 1.1 11.4% 4.2%
GE Aerospace GE 32.6 4.7 21.6% 12.5%
Becton Dickinson & Co. BDX 15.0 2.9 9.5% 7.9%
S&P 500 SPX 22.1 3.0 14.8% 5.6%
Source: FactSet
Axon Enterprise $(AXON)$ tops the list as the only stock with 100% buy or equivalent ratings. The stock's 147% return so far this year is the second-highest on the list, trailing only Nvidia's return of 173%.
Axon makes tasers used by law enforcement, along with other equipment and cloud and artificial-intelligence enabled systems for use in law-enforcement operations and investigations. In a note to clients in November, Jefferies analyst George Notter called Axon's new "AI Era" bundle of products and services a "blockbuster."
The new bundle includes Axon's Draft One, which uses body-camera data to provide transcriptions to police officers, thus cutting the amount of time needed to write reports. During the company's most recent earnings call, Axon's president, Joshua Isner, said that the current price for Draft One alone was $65 a month per officer, plus another $20 for the transcription service. He added that the company was "looking at the AI Era bundle price of $199, and the-sum-of-the-parts of that bundle is expected to be somewhere around $250 to $350 in terms of everything included in it," according to a transcript provided by FactSet.
So Axon has the highest price-to-earnings and highest price-to-sales ratios among the listed companies, based on Tuesday's closing prices and consensus estimates for 2025.
But there are also value plays on the list, with Delta Air Lines $(DAL)$, Schlumberger $(SLB)$, Micron Technology $(MU)$ and Becton Dickinson $(BDX)$ all having P/E ratios below those of the full S&P 500. And on a price-to-sales basis, there are five companies trading lower than the index, including Walmart $(WMT)$.
Impressive numbers for Delta: Why this airline's stock is expected to be a world leader through 2026
Having a high percentage of buy ratings can provide some comfort, but if you are considering any individual stock for investment, you should do your own research to form your own opinions about the company's business strategy. One way to begin that process is by clicking the tickers for more information.
Read: Tomi Kilgore's guide to the wealth of information available for free on the MarketWatch quote page
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-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 11, 2024 09:25 ET (14:25 GMT)
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