General Motors: Implied Upside of 170%
Automaker General Motors (GM) is one of the S&P 500 components that analysts believe could experience triple-digit growth in the coming year. Citigroup analyst Itay Michaeli recently raised the firm’s price target on GM to an impressive $95 per share, indicating potential upside of up to 170% based on the stock’s current price of $35.23.
Despite anticipated labor expenses, GM has reinstated its full-year 2023 guidance for net income and plans to implement shareholder-focused initiatives such as a $10 billion accelerated share repurchase program and a 33% increase in quarterly dividend for 2024. To avoid profitability challenges, General Motors is focusing on aligning production with deliveries and improving manufacturing efficiencies for its electric vehicles. Furthermore, the untapped potential of the Chinese auto market presents an additional growth opportunity for the company.
Considering GM’s attractive valuation, with a price-to-earnings (P/E) ratio of 5, long-term investors may view the stock as a compelling investment opportunity.
Moderna: Implied Upside of 127%
Biotech company Moderna (MRNA) is another S&P 500 stock that analysts believe has substantial upside potential in 2024. Goldman Sachs analyst Salveen Richter set a price target of $231 per share for Moderna, suggesting possible growth of up to 127% based on the stock’s current price of $101.92.
While Moderna’s success with COVID-19 vaccines is well-known, Richter highlights the company’s expansion into other areas, including influenza, respiratory syncytial virus (RSV), and various cancer indications, as reasons for continued growth. The company’s mRNA-1345 vaccine for RSV has shown positive results in late-stage trials, demonstrating high efficacy rates. Additionally, experimental combination therapies, such as the one involving Moderna’s mRNA-4157 and Merck’s Keytruda, have exhibited significant potential in reducing risk and boosting revenue.
However, it’s important to note that Moderna’s COVID-19 vaccine sales have declined as the pandemic situation improves. Consequently, achieving the $231 price target in 2024 may prove challenging.
Warner Bros. Discovery: Implied Upside of 128%
Media giant Warner Bros. Discovery (WBD) is the third S&P 500 stock identified by analysts as having substantial upside potential in the new year. Benchmark analyst Matthew Harrigan established a price target of $24 per share for the company, suggesting potential growth of up to 128% relative to the stock’s closing price on Jan. 23.
While Warner Bros. Discovery’s networks segment experienced a decline in ad revenue in the September-ended quarter, it is expected that political ad spending will boost revenue during the election year of 2024. Additionally, historical data indicates that most recessions are relatively short-lived, with economic expansions lasting longer.
The company’s direct-to-consumer (DTC) segment has also shown promise, with strong pricing power and growing average revenue per user. However, Warner Bros. Discovery’s high net debt of over $41 billion poses a potential risk to its turnaround efforts.
Considering the company’s current circumstances, investors should approach Warner Bros. Discovery with realistic expectations for modest returns in 2024.
In conclusion, these three S&P 500 stocks have captured the attention of Wall Street analysts, who see significant upside potential in each. However, it’s important for investors to carefully evaluate these opportunities and manage their expectations accordingly.