If S&P 500 investors just learned something from earnings season — it’s that they should have expected even more. And analysts aren’t wasting any time catching up.
Wall Street analysts upped their price targets on eight S&P 500 stocks, like industrial Generac (GNRC), tech Gartner (IT) and IBD Long-Term Leader Charles River (CRL) by 15% or more in the past 30 days, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Best of all, each of these S&P 500 stocks with boosted price targets still have room to run until hitting analysts’ higher forecasts.
Strong S&P 500 profit is overpowering most of investors’ other concerns. “Thus far the market has largely shrugged off this weaker data in favor of much better-than-expected corporate earnings,” says Stock Trader’s Almanac in a note to clients.
S&P 500 Profits Are Soaring
It’s a race for analysts to boost their 12-month price targets on S&P 500 stocks. Analysts boosted their price targets on 370 S&P 500 stocks, or nearly three-quarters of the index, in the past 30 days.
And these aren’t small target hikes. Analysts took up their 12-month price targets on these S&P 500 stocks by nearly 5%, on average. Targets jumped 10% or more for roughly a tenth of those companies.
Why such good vibes? S&P 500 profits are blowing away even analysts’ wildest dreams so far. Nearly 90% of the S&P 500 companies to report second-quarter profit topped expectations, says John Butters, analyst at FactSet. In fact, he found that’s the highest percentage of companies surpassing profit forecasts since at least 2008.
Surprisingly higher profit means many S&P 500 companies are worth more than analysts thought just a month ago.
Analysts Scramble To Keep Up With S&P 500 Leader Generac
Analysts boosted their 12-month price target on the S&P 500 stock by nearly 19% in the past 30 days to 495.13. If they’re right, that means there’s still more than 19% upside in the stock. It closed Friday at 415.04.
Much of analysts’ bullish reaction is to the company’s July 28 second-quarter earnings report. Profit came in 3% ahead of forecasts. But more importantly, analysts think Generac will make $10.10 a share in 2021. That’s 56% more than it made in 2020.
Finding Upside Off Beaten Path In S&P 500
Tech and biotech stocks are flying higher. But many are now extended and past analysts’ target prices. So finding angles in the S&P 500 is taking more effort.
Take Gartner, a leader in tech consulting. Analysts bumped up their price target on the stock by nearly 26% in the past 30 days to 311.86. Wall Street is trying to stay ahead of the stock’s 82.8% gain this year so far. Interestingly at the new price target, that still leaves nearly 7% upside from Friday’s closing price of 292.89.
It’s a similar story for medical testing company Charles River, helmed by top-notch management. Shares are up more than 60% this year to Friday’s close at 408. But analysts jacked up their 12-month price target by more than 15% in the past four weeks. That means there’s still nearly 3% upside until the stock hits the new target of 418.69.
Perhaps S&P 500 analysts are still too cautious. But they’re clearly showing their hand on the stocks they think it’s worth paying more for.
Analysts pushed up 12-month targets by 15% or more in the past 30 days, still have upside
|Company||Ticker||Stock YTD % ch.||Price target % change (past 30 days)||Potential gain to new target||Sector|
|HCA Healthcare||(HCA)||52.1%||19.3||5.5%||Health Care|
|Charles River Laboratories||(CRL)||63.3%||15.8||2.6%||Health Care|
|Bio-Rad Laboratories||(BIO)||29.2%||15.5||2.4%||Health Care|
|Edwards Lifesciences||(EW)||26.3%||19.3||2.3%||Health Care|
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
YOU MAY ALSO LIKE: