Take a look at the S&P500’s top ten stocks that are expected to fall the most.
Moderna is at the top of the list of projected laggards. According to Vanda Research, the vaccine maker was the most popular buy among retail investors earlier this week. Analysts, on average, believe the pharmaceutical and biotechnology company will drop more than 25% in the next 12 months.
“We continue to be impressed with the underlying MRNA story, technology, and management execution. However, a rising valuation has outstripped our current assessments of the breadth and depth of this promising story,” Oppenheimer analysts said last week.
This year, Moderna stock has increased by nearly 280 percent. However, the stock was trading about 20% below its 52-week high of $497.49 on Friday. That record was set on Tuesday.
The steel company Nucor’s stock jumped more than 20% this week after the Senate passed a $1 trillion infrastructure package, which boosted industrial stocks. Nonetheless, analysts predict that Nucor will fall 11% in the next 12 months.
In 2021, the stock of grocery store behemoth Kroger outperformed the market. Its stock is up more than 34% this year, compared to the S&P500′s gain of more than 18%. Wall Street anticipates a 10% drop in the stock from here.
Other stocks that are expected to fall over the next year include Illumina, Oracle, and Rockwell Automation.
Climate change stocks
In a research note dated Aug. 9, Swiss bank UBS said it signals the start of a “intense season of climate newsflow” ahead of this fall’s climate talks known as COP26.
“IPCC reports are critical for financial markets. Policy change is sparked by the reports, and policy change creates momentum in the clean energy sector. The last major IPCC report… coincided with the beginning of a very strong period of trading in the clean energy theme, and this could happen again as we approach the COP 26 conference in Glasgow,” analysts led by Sam Arie stated.
According to the report, UBS’s buy-rated “clean energy” picks include Italian electricity and gas firm Enel, Spanish electricity company Iberdrola, Danish renewables firm Orsted, and German company RWE. NextEra Energy is its U.S. pick.
“won’t directly impact stocks,” but it has “the potential to influence climate policy globally, which will have implications for growth and returns in many sectors.”
When asked how investors can tell if a company is taking steps to reduce its carbon footprint or if its statements are “greenwashing,” Alsford said, “Over time, investors will be able to see whether company emissions are indeed falling and falling at the necessary speed that is required to achieve the Paris Agreement.”
The Paris Agreement is a 2015 international climate change treaty that pledged to limit temperature increases to 1.5 degrees Celsius above pre-industrial levels.
Alliance Bernstein analysts chose stocks in a research note published ahead of the United Nations’ climate report that they say can assist investors in “separating climate leadership from greenwashing for your net-zero portfolio.” Bernstein identified companies that have established “science-based targets” that are in line with the Paris Agreement.
The companies on Bernstein’s list also provide “climate incentives” to senior executives, some of which are financial in nature — the bank’s analysis suggests that companies that incentivize employees in this way are more likely to stick to emissions reduction targets.
Among the companies on Bernstein’s list of “leaders in climate action” are Covid vaccine makers AstraZeneca and Pfizer, retailers Walmart, Inditex (owner of fashion brand Zara), and British grocer Sainsbury’s, as well as telecom firms AT&T, Vodafone, and Telefonica.
KFC owner Yum Brands, engineering consultancy WSP, and data center company Equinix are among the companies on Bernstein’s list that have set science-based targets in recent months. Mastercard, Adobe, and Microsoft were also mentioned by Bernstein.
Global robot and health stocks could be the best stocks to buy in the coming weeks
In a note to investors on Aug. 9, Jefferies analysts led by Simon Powell predicted that the global population would peak at 9.7 billion in 2064 — and then fall — citing research from the University of Washington. “This is in contrast to many studies that appear to suggest that population continues to rise to 10 billion and beyond,” they added, citing falling birth rates in China and India as the reason. The analysts chose stocks that will benefit from China’s aging population, claiming that the demographic trend will provide a “significant tailwind” for some companies.
“Aging populations are not a new topic, but the sheer number of elderly people is likely to surprise on the positive side. The global population of seniors aged 65 and up has increased by more than 350% in the last 60 years and is expected to increase by another 100 percent or more in the next 30 years, according to Jefferies analysts.
Analysts believe that China’s declining birthrate will have an impact on available labor, which will be “detrimental” to the country’s economic growth. Meanwhile, Africa’s population, particularly in Nigeria, is expected to surpass China’s by 2100, reaching 4.3 billion.
“We prefer robots, real estate, and select consumer stocks. The scarcity of working-age people will be a strong tailwind for the robotics theme. As older population numbers surprise to the upside, we like healthcare and real estate focused on that demographic, according to Jefferies analysts.
The following are the bank’s picks:
Robotics and health care
Fanuc Corporation and Yaskawa Electric were highlighted as hold-rated stocks by Jefferies. Siemens is its buy-rated robotics stock. Analysts are optimistic about the robotics industry. “Robotics has been a rapidly growing industry in order to compensate for labor shortages and to assist in the care of the elderly,” the analysts stated.
The bank also rated Biogen, a neuroscience company based in the United States, and CSL, a biotech company based in Australia, as buys, stating that “aging populations globally drive increased demand for healthcare.” This is particularly true in developed markets.”
Analysts at Jefferies rate Chinese stocks as buy, including medical provider EC Healthcare and pharmaceutical company Shanghai Fosun Pharmaceutical. “Chinese consumers are beginning to prefer to exercise more and eat more healthily… As the population ages, there will be more retired people with time for travel, recreation, and healthy lifestyles,” analysts wrote about how people will act in the future.
Property and consumer goods
Analysts at Jefferies believe skincare company Beiersdorf will benefit from an aging population, and they have also recommended Indian stocks Hindustan Unilever and consumer goods company ITC. “India’s middle-class growth will continue long after China’s middle-class growth has slowed. “There may be a shift away from Chinese consumer staples and toward Indian consumer staples,” the bank’s analysts wrote.
It chose Indian developer Godrej Properties as its top pick in the property sector. ”[Godrej Properties] is the only national player who focuses solely on residential development. It is also India’s largest developer in terms of pre-sales. The company has significant capital-raising advantages, according to the analysts. Jefferies has a buy rating on Indian real estate firms DLF and Oberoi.