The S&P 500 is hitting all-time highs — and nothing seems to stand in its way. But analysts think you’re nuts if you insist on owning the wrong stocks.
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A dozen stocks in the S&P 500 — including Teradyne (TER), Expeditors International of Washington (EXPD) and Qualcomm (QCOM) — are expected to fall more than 5% in the next 12 months, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
Why put up with S&P 500 stocks seen dropping when the S&P 500 is up 14.2% this year?
Analysts Are Mostly Bullish
If you own stocks analysts think will drop, know you’re in the minority. More than 440 stocks in the S&P 500, roughly 90% of the index, are seen rising in the next 12 months.
But that’s not the case with Teradyne, a maker of robotics and semiconductor testing equipment. Analysts think the stock will drop nearly 13% in the next 12 months. That’s the largest plunge expected from any stock in the S&P 500.
But the pessimism isn’t due to problems with the company or stock. Analysts think the company will earn $3.10 a share this fiscal year, up roughly 6% from last fiscal year. Additionally, the stock is already up more than 36% this year. Seems like a valuation call. Teradyne is trading for more than 50 times its trailing earnings.
Similarly, analysts are signaling the 50% jump by mobile-chip maker Qualcomm so far this year is overdone. They’re forecasting the stock to drop 9.1% in the next 12 months. That fall is predicted even as the company’s profit is on track to rise nearly 18% this year.
Other Warnings From Analysts
Some of the S&P 500 stocks that analysts are negative on, though, are already struggling.
Three stocks analysts think will drop in the next 12 months are down this year. Take Expeditors International as an example. The shipping company’s stock is already off more than 2% this year. And analysts think it will fall an additional 11%.
It’s a similar situation with Skyworks Solutions (SWKS) and Southwest Airlines (LUV). Analysts think both stocks, down in 2024 so far, will drop an additional 6% apiece in 12 months.
To be sure, analysts aren’t always right and are often wrong. But they’re also nearly always bullish. So when they raise a caution flag, it might pay to listen.
Analysts Sound An S&P 500 Warning
Stocks expected to fall 5% or more in 12 months
| Company | Ticker | Downside forecast | Sector |
|---|---|---|---|
| Teradyne | (TER) | -12.7% | Information Technology |
| Expeditors International of Washington | (EXPD) | -10.9% | Industrials |
| Qualcomm | (QCOM) | -9.1% | Information Technology |
| Hewlett Packard Enterprise | (HPE) | -9.0% | Information Technology |
| Texas Instruments | (TXN) | -8.2% | Information Technology |
| Mettler-Toledo International | (MTD) | -8.1% | Health Care |
| Seagate Technology | (STX) | -7.8% | Information Technology |
| KLA | (KLAC) | -6.8% | Information Technology |
| First Solar | (FSLR) | -6.4% | Information Technology |
| Iron Mountain | (IRM) | -6.2% | Real Estate |
| Skyworks Solutions | (SWKS) | -6.0% | Information Technology |
| Southwest Airlines | (LUV) | -5.9% | Industrials |
Sources: IBD, S&P Global Market Intelligence
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