Remember when Tesla (TSLA) was a hot S&P 500 stock everyone wanted to own? How things have changed — and analysts think it’s going to stay that way.
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The S&P 500 is storming higher this year. But 11 formerly hard-charging S&P 500 companies — including communications services Activision Blizzard (ATVI), consumer discretionary Tesla (TSLA) and information-technology play Enphase Energy (ENPH) — are lagging this year, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
All these S&P 500 stocks jumped more than 40% in 2020. That’s an impressive showing vs. the S&P 500’s 16.3% rise in that time. But it’s a completely different story this year so far. All these formerly leading stocks are up 1% or less — or even down for the year — while the S&P 500 is up nearly 20%.
Interestingly, though, analysts see rebounds coming in twelve months for all but two of them: Tesla and industrial company Rollins (ROL).
S&P 500: A Few Past Leaders Fizzle Out This Year
You’d think the fast-jumping S&P 500 would bring along all past leaders, too. But that’s not the case.
Already this year, the S&P 500 is up an impressive 19%. It has more than doubled from its low-water mark last March. It’s a broad rally, too. More than 420 S&P 500 companies, or nearly 85% of the stocks in the index, are higher this year. And of those more than 240 are beating the S&P 500.
It’s a rush higher for the history books. The S&P 500, just this year, notched 50 all-time closing highs, says Ryan Detrick, strategist at LPL Financial. At this pace, the S&P 500 would set 78 new highs. That would just top the previous record of 77 all-time highs in 1995.
“There’s a long way to go, but this has been an amazing year and this is yet another way to show it,” Detrick said.
But it’s interesting to see past winners missing out on the S&P 500 rally that’s lifting most stocks.
Video Gaming Stocks Hit Pause
It’s starting to look like a return to in-person school isn’t bullish for makers of video games. But analysts think the pause is temporary.
Shares of “Call of Duty” maker Activision Blizzard jumped 56.3% in 2020, turning it into one of the top stocks of 2020. And “Grand Theft Auto” publisher Take-Two Interactive (TTWO) also saw its shares soar nearly 70% in 2020. Both companies’ benefited from more people staying at home during the week and playing video games.
But the high scores for video game stocks are disappearing. It’s temporary, though, analysts say.
Facing internal strife over working conditions, Activision Blizzard stock is down nearly 13% this year. But analysts are sticking with it. They say the stock should be worth up to 41% more in 12 months than it is now. That’s a larger-than-expected jump than from any other stalled S&P 500 leader. Additionally, they’re calling for the company to make $3.81 a share this fiscal year, up nearly 9% from 2020’s gangbuster year.
It’s a similar tale at Take-Two. Analysts think the company’s stock will jump more than 33% in the next 12 months.
A New Phase For Enphase?
Home solar company Enphase dimmed a great deal this year. But analysts are still hopeful.
The company’s stock is down nearly 2% in 2021 so far. That might not seem so bad. But keep in mind the S&P 500 is up nearly 20% in that time. Also, we’re talking about an S&P 500 stock that soared a blistering 572% in 2020.
Analysts, though, are hopeful Enphase will shine again. They’re calling for the stock to jump 14% over the next 12 months. And profit is seen growing by even more: 50%.
But the same can’t be said for Elon Musk’s Tesla. Yes, the glowing profit-growth forecasts are there for Tesla. Analysts think the electric-car maker will earn $5.45 a share in 2021, up more than 140% from 2020. But analysts think the stock will only be worth 686.09 a share in 12 months. That’s down 2% from Thursday’s 699.81 a share closing price. What do the chart and fundamentals say about Tesla stock now?
And, in many ways, Tesla might be the victim of too much enthusiasm last year as it joined the S&P 500. Tesla jumped more than 740% in 2020, making it one of the index’s top stocks. But this year? It’s down 1%.
Maybe the skid will end later in 2022?
Stalled S&P 500 Winners
All are up less than 1% this year, despite jumping more than 40% in 2020
| Company | Ticker | Stock % change in 2020 | % change in 2021 | Analysts’ expected upside | Sector | Composite Rating |
|---|---|---|---|---|---|---|
| Activision Blizzard | (ATVI) | 56.3% | -12.5% | 40.4% | Communication Services | 52 |
| Take-Two Interactive Software | (TTWO) | 69.7% | -23.5% | 33.2% | Communication Services | 39 |
| IPG Photonics | (IPGP) | 54.4% | -24.2% | 31.9% | Information Technology | 44 |
| Teradyne | (TER) | 75.8% | -2.2% | 25.9% | Information Technology | 67 |
| Penn National Gaming | (PENN) | 237.9% | -6.4% | 25.5% | Consumer Discretionary | 48 |
| Qualcomm | (QCOM) | 72.7% | -6.6% | 24.4% | Information Technology | 88 |
| Enphase Energy | (ENPH) | 571.5% | -1.7% | 14.0% | Information Technology | 96 |
| Ansys | (ANSS) | 41.3% | -0.4% | 4.0% | Information Technology | 82 |
| MarketAxess Holdings | (MKTX) | 50.5% | -16.5% | 0.9% | Financials | 46 |
| Tesla | (TSLA) | 743.4% | -0.8% | -2.0% | Consumer Discretionary | 89 |
| Rollins | (ROL) | 76.7% | -2.0% | -4.7% | Industrials | 87 |
Sources: IBD, S&P Global Market Intelligence, based on analysts’ 12-month price targets
Follow Matt Krantz on Twitter @mattkrantz
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