Give credit where it’s due. Analysts called the drops in Apple and Tesla stocks. And these S&P 500 giants’ stocks crashed enough now for analysts to see upside again.
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Analysts sounded alarm on the two megacap S&P 500 stocks coming into the year — right as most investors were snapping them up. Just as Apple (AAPL) busted through the $3 trillion market value barrier, analysts warned it wouldn’t last, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. And they were right: Apple is now down nearly 9% this year, making it worth nearly $360 billion less than it was just two months ago.
And analysts’ Tesla (TSLA) stock warning was even more scary. Back at the start of the year, analysts warned the electric-car maker’s shares were nearly 16% overvalued and would drop to 893.36 in 12 months. Reality was even worse: The stock is now down nearly 25% this year to 800.77.
Good calls, yes. But what are analysts saying now about these two important S&P 500 stocks?
S&P 500 Correction Puts Stocks In Target
It’s been a brutal year for S&P 500 stocks so far. And that applies especially to the megacaps everyone was loading up on for years.
Eight of the top 10 most valuable S&P 500 stocks are down this year. And not by a little: The 10 are off by an average 12.7%. Losses in 2022 are so bad that three of the top 10 most valuable S&P 500 stocks are now also down over the past 12 months.
One of the only megacap S&P 500 stocks still up on the year, ironically, is Warren Buffett’s Berkshire Hathaway (BRKB), which is benefiting from the sell-off of giant growth stocks and shift into value.
So, What About Apple Stock Now? Up 18% From Here
That’s history now, right? What do analysts think now? It’s bullish: They think Apple is going to retake the $3 trillion market cap level, and then some.
Current analysts’ targets call for shares of Apple to jump more than 17% over the next 12 months to 191.08 a share. That’s not just up from where Apple started the year, but enough to make the company worth $3.1 trillion again. If analysts are right, Apple would be the only S&P 500 company worth $3 trillion or more in a year’s time.
The company’s seemingly unassailable ability to charge whatever it wants for its smartphones makes it a company that’s hard to keep down for long. Analysts think the company’s adjusted profit per share will jump nearly 10% this fiscal year to $6.15. And revenue this year is expected to jump roughly 8% to $395.2 billion.
With growth like that, should you think about buying Apple stock now?
Analysts: Put On Your Seatbelts For 21% Jump In Tesla Stock
It’s long paid to simply ignore analysts’ calls on Tesla — except for Cathie Wood’s. But now the Tesla bulls might actually like what analysts are saying now about the stock.
Analysts now think Tesla’s shares should trade up 20.1% over the next 12 months to 961.70. If they’re right, it would mark a return to form for this volatile, but solid long-term outperformer. At that price, Tesla’s market value would hit $993.9 billion, just shy of the trillion-dollar mark and nearly $140 billion more than it’s worth now.
And it’s not just speculation on a bounce-back, which is a risky move in this S&P 500. Analysts think the company will make 55% more in profit this year than in 2021, or $10.50 a share. Meanwhile, revenue this year is seen jumping more than 50% to $81.8 billion.
Clearly, with war raging in Ukraine, all bets are off. And savvy investors know to cut their losses. But seeing S&P 500 analysts get bullish again on two of the most important stocks is worth noting.
Big Caps, Big Hopes
Analysts see upside for most megacap S&P 500 stocks
| Company | Symbol | Stocks YTD % ch. | Market value now ($ trillions) | Upside to analysts’ target |
|---|---|---|---|---|
| Apple | (AAPL) | -8.5% | $2.7 | 17.6% |
| Microsoft | (MSFT) | -12.4 | 2.2 | 26.8 |
| Alphabet | (GOOGL) | -8.4 | 1.8 | 31.8 |
| Amazon.com | (AMZN) | -9.2 | 1.5 | 36.4 |
| Tesla | (TSLA) | -24.2 | 0.8 | 20.1 |
| Berkshire Hathaway | (BRKA) | 2.5 | 0.7 | 11.1 |
| Nvidia | (NVDA) | -19.3 | 0.6 | 42.9 |
| Meta Platforms | (FB) | -38.3 | 0.6 | 62.6 |
| Visa | (V) | 0.3 | 0.5 | 24.4 |
| UnitedHealth | (UNH) | -9.2 | 0.4 | 14.9 |
Sources: IBD, S&P Global Market Intelligence, based on 12-month price targets
Follow Matt Krantz on Twitter @mattkrantz
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Source: https://www.investors.com/etfs-and-funds/sectors/sp500-analysts-called-the-apple-and-tesla-stock-drops-what-they-say-now/?src=A00220&yptr=yahoo