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Deep Dive

Philip van Doorn

Sept. 25, 2021, 9:09 a.m. EDT

These stocks are in bear-market territory, but Wall Street expects them to soar as much as 68%

By Philip van Doorn

This looks like another good year for the stock market — the benchmark S&P 500 is up 16%. But it turns out that scores of stocks are in bear-market territory. And among that beaten-down group, there are many stocks that Wall Street analysts expect to roar back.

A list of those stocks is below.

The power of index weighting

The S&P 500 (S&P:SPX) is having an excellent year, in part, because it is weighted by market capitalization. It turns out that among the 500 stocks, 96 are down this year and 99 are down at least 20% from their 52-week highs.

Now let’s look at the top five companies held by the SPDR S&P 500 ETF Trust (PSE:SPY) , which tracks the S&P 500. Together, they make up nearly 23% of the ETF’s portfolio and the S&P 500 Index:

Company Price change – 2021 Share of SPY
Apple Inc. (NAS:AAPL) 8.1% 6.1%
Microsoft Corp. (NAS:MSFT) 32.5% 6.0%
Amazon.com Inc. (NAS:AMZN) 2.7% 4.0%
Facebook Inc. Class A (NAS:FB) 30.9% 2.3%
Alphabet Inc. Class A (NAS:GOOGL) 58.7% 2.3%
Alphabet Inc. Class C (NAS:GOOGL) 59.4% 2.1%
Source: FactSet

Beloved stocks in bear markets

To broaden a list of large-cap stocks, the following screen began with the S&P 500 and the components of the Nasdaq-100 Index, which is made up of the 100 largest Nasdaq-listed companies by market capitalization. After removing duplicates, this left a list of 523 stocks.

Among the 523 stocks, 107 are in a bear market — that is, they were down at  least 20% from their 52-week highs through Sept. 21, according to data provided by FactSet.

Among the 107, there are 35 with “buy” or equivalent ratings from at least two-thirds of analysts polled by FactSet. Here they are, sorted by the 12-month upside potential implied by the consensus price targets:

Company Decline from 52-week high Closing Price – Sept. 21 52-week high Date of 52-week high Share “buy” ratings Consensus price target Implied 12-month upside potential
Western Digital Corp. (NAS:WDC) -29.1% $55.47 $78.19 06/04/2021 70% $93.39 68%
Baidu Inc. ADR Class A (NAS:BIDU) -55.8% $156.71 $354.82 02/22/2021 86% $258.24 65%
Micron Technology Inc. (NAS:MU) -25.6% $72.14 $96.96 04/12/2021 88% $114.03 58%
Activision Blizzard Inc. (NAS:ATVI) -30.1% $73.03 $104.53 02/16/2021 94% $115.34 58%
NetEase Inc. ADR (NAS:NTES) -40.5% $79.95 $134.33 02/11/2021 94% $125.11 56%
News Corp. Class A (NAS:NWSA) -20.6% $22.21 $27.97 05/10/2021 80% $32.86 48%
General Motors Co. (NYS:GM) -23.2% $49.37 $64.30 06/07/2021 92% $72.79 47%
Hess Corp. (NYS:HES) -26.1% $67.31 $91.09 06/23/2021 67% $99.13 47%
Global Payments Inc. (NYS:GPN) -29.1% $156.58 $220.81 04/26/2021 81% $227.15 45%
VF Corp. (NYS:VFC) -27.0% $66.25 $90.79 04/29/2021 67% $95.95 45%
Pinduoduo Inc. ADR Class A (NAS:PDD) -55.3% $95.10 $212.60 02/16/2021 79% $136.67 44%
Diamondback Energy Inc. (NAS:FANG) -21.9% $80.04 $102.53 07/01/2021 91% $114.09 43%
Take-Two Interactive Software Inc. (NAS:TTWO) -32.2% $145.72 $214.91 02/08/2021 67% $206.82 42%
Freeport-McMoRan Inc. (NYS:FCX) -33.9% $30.48 $46.10 05/10/2021 72% $43.21 42%
Vertex Pharmaceuticals Inc. (NAS:VRTX) -33.9% $185.80 $280.99 10/13/2020 74% $260.67 40%
Alaska Air Group Inc. (NYS:ALK) -24.4% $56.11 $74.25 04/07/2021 93% $78.71 40%
Lamb Weston Holdings Inc. (NYS:LW) -29.1% $61.26 $86.41 03/08/2021 78% $85.43 39%
Eastman Chemical Co. (NYS:EMN) -24.0% $99.18 $130.47 06/01/2021 73% $137.90 39%
PTC Inc. (NAS:PTC) -22.0% $119.93 $153.73 07/23/2021 76% $165.23 38%
Fidelity National Information Services Inc. (NYS:FIS) -22.2% $121.38 $155.96 04/29/2021 72% $165.93 37%
Halliburton Co. (NYS:HAL) -22.1% $19.48 $25.00 06/04/2021 69% $26.47 36%
Stanley Black & Decker Inc. (NYS:SWK) -20.0% $179.89 $225.00 05/10/2021 67% $241.71 34%
Schlumberger Ltd. (NYS:SLB) -27.0% $26.93 $36.87 06/04/2021 80% $35.90 33%
Newmont Corp. (NYS:NEM) -27.6% $54.51 $75.31 05/19/2021 71% $72.65 33%
Southwest Airlines Co. (NYS:LUV) -24.1% $49.15 $64.75 04/14/2021 82% $65.00 32%
Valero Energy Corp. (NYS:VLO) -25.5% $63.32 $84.95 06/03/2021 86% $83.41 32%
Zimmer Biomet Holdings Inc. (NYS:ZBH) -20.8% $142.76 $180.36 04/29/2021 77% $187.58 31%
FMC Corp. (NYS:FMC) -24.5% $93.31 $123.66 01/13/2021 68% $122.29 31%
Cigna Corp. (NYS:CI) -25.8% $202.39 $272.81 05/10/2021 83% $264.73 31%
Corning Inc. (NYS:GLW) -20.3% $37.31 $46.82 04/26/2021 67% $48.75 31%
Leidos Holdings Inc. (NYS:LDOS) -20.1% $90.90 $113.75 01/25/2021 83% $117.78 30%
WestRock Co. (NYS:WRK) -22.3% $48.19 $62.03 05/17/2021 67% $62.31 29%
Peloton Interactive Inc. Class A (NAS:PTON) -41.0% $100.92 $171.09 01/14/2021 74% $129.67 28%
FedEx Corp. (NYS:FDX) -21.2% $252.07 $319.90 05/27/2021 75% $321.15 27%
JD.com Inc. ADR Class A (NAS:JD) -32.1% $73.50 $108.29 02/17/2021 94% $93.11 27%
Source: FactSet

Click on the tickers for more about each company. The data above are limited, so the MarketWatch quote page can be an excellent start for your own research. Click  here  for Tomi Kilgore’s new, detailed guide to the wealth of information available for free on the quote page.

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