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  • Writer's pictureRealFacts Editorial Team

12 S&P 500 Stocks Likely to Underperform in 2024


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There have been recent reports on a select group of S&P 500 stocks that are projected to decline by 5% or more in the next 12 months. The following chart, produced by Investor's Business Daily’s (IBD) S&P Global Market Intelligence, highlights these leading companies.

 


List of 12 stocks in the S&P 500 likely to underperform

 

These companies are expected to decline even though the S&P 500 has recently been on an uptrend, frequently hitting all-time highs, and is up over 14.5% year-to-date. It’s crucial to note that analysts aren’t always correct and frequently err in their estimates, but investors must consider that analysts are nearly always bullish. More than 440 stocks in the S&P 500, accounting for nearly 90% of the index, are expected to see gains in the next 12 months, as forecasted by analysts. This should make investors realize that a caution flag should be raised if a stock they own is expected to fall over the coming 12 months. Some of these stocks aren’t expected to decline due to underlying issues with the company but rather because of already enormous valuations.


One of these companies is Teradyne (TER), which is expected to fall nearly 13% in the coming 12 months. Teradyne is a manufacturer of semiconductor and robotics testing equipment. The stock is up 36% year-to-date and is trading at 50 times its trailing earnings. Analysts don’t believe the stock can sustain such a high level of valuation. Other stocks forecasted to drop have underlying growth struggles, such as Southwest Airlines (LUV), which has already seen declines year-to-date and is expected to fall another 5.9% in the coming 12 months. Investors should watch analyst predictions for individual stocks' future performance and take them into account when determining whether or not to allocate funds to a specific company.

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