Stocks in these weak sectors outperform the market and analysts love them
This year has been marked by large sell-offs in certain sectors as economic uncertainty and rising interest rates have led to sharp declines. However, there are still some stocks that are outperforming even as their peers are falling, and Wall Street analysts believe it’s not too late to focus on those names. The chart below, using data from FactSet as of Friday’s close, shows stocks in depressed areas of the market that have outperformed the S&P 500 this year. These names still have buy ratings from more than 50% of analysts. Source: FactSet The biggest outperformer on the list is T-Mobile, which is up more than 20% this year. T-Mobile doesn’t have the same presence in the cable TV or entertainment markets as many of its telecom peers, which could help it outperform. T-Mobile is also launching a 5G home internet product that could represent a growth opportunity in an otherwise mature market. Additionally, Morgan Stanley analyst Simon Flannery said in a note to clients last week that T-Mobile’s board of directors could approve a share buyback program in the coming months. Tech stocks have been hit hard this year, but the screen shows there have been a number of relatively strong stocks. SolarEdge Technologies has been boosted by the Biden administration’s clean energy spending initiatives. The company is also trading 29% below its average analyst target price, according to FactSet. Video game company Electronic Arts has also managed to hold its own in 2022. The stock has a Buy rating from more than 60% of its analysts. Following the company’s most recent earnings report earlier this month, Wedbush analyst Michael Pachter raised his target price and fiscal 2023 earnings estimates for EA, saying the company is “well positioned to meet or exceed its FY:23 guidance.” . Payments stocks are another bright spot on the list, as several high-profile names have outperformed the financials sector this year. Visa, Mastercard, and Global Payments are all popular with analysts, and are down less than 10% year-to-date, slightly outperforming the S&P 500. – CNBC’s Michael Bloom contributed to this report.
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