As the dawn of a new year approaches, investors are reassessing their portfolios with the hope of identifying stocks poised for significant growth in the upcoming year. According to recent insights from financial services company Citi, 2024 has been exceptionally robust for the stock market, with major indices reflecting considerable gains over the year. This trend offers a promising backdrop as we look toward 2025 and beyond.
Market Performance: A Year in Review
Throughout 2024, each of the three predominant U.S. stock indices demonstrated impressive upward momentum. The tech-centric Nasdaq Composite led the charge, recording a remarkable surge of over 33%, while the broader S&P 500 climbed around 26%. In comparison, the traditional stalwart, the Dow Jones Industrial Average, reported a more modest yet noteworthy gain of approximately 15%. These statistics underline an overall bullish sentiment among investors, reflecting confidence in the market’s resilience and growth potential.
Given this positive marketplace atmosphere, Citi has updated its focus list of stocks deemed to have the highest conviction within North America. Over the last three months alone, this curated list has demonstrated impressive absolute returns, averaging a notable 26%, with even greater returns reported over a six-month period at 37.5%. Starting to assemble what could be termed “the next wave” of stock investments, Citi has made adjustments to their recommendations, adding companies like AT&T and Boston Scientific while removing others like Cheniere Energy and Atlassian.
AT&T: An Unexpected Contender for Growth
Among the newly spotlighted stocks is AT&T, whose performance has been somewhat inconsistent in December yet has outshone the general market with nearly 37% growth year-to-date in 2024. Citi analysts maintain a buy rating on this telecommunications giant, projecting further upside potential. The investment firm has set a favorable price target of $28 per share, indicating the possibility of a 22% price increase from its recent closing price.
Citi’s analyst, Michael Rollins, perceives that the market may be undervaluing AT&T’s capacity to generate sustained annual performance, especially in its mobility segment. In his analysis, he highlights an expected growth trajectory in service revenues, projecting a year-over-year increase of 2.4%. Additionally, Rollins notes that the company is likely to harness its strong position in mobile and broadband services to elevate financial performance, suggesting a multi-year growth opportunity for AT&T shareholders.
Another company touted by Citi is Boston Scientific, which has seen its stock prices skyrocket by over 58% this year. Citi has set an ambitious price target of $107 for this medical device manufacturer, reflecting a 17% potential increase from current levels. Citi analyst Joanne Wuensch points out that Boston Scientific is benefitting from a series of successful product launches, particularly in the burgeoning field of pulsed-field ablation (PFA) technologies.
With the medical device sector poised for growth, Boston Scientific is anticipated to achieve double-digit revenue and earnings growth. The company’s innovation strategy is expected to engage healthcare providers and patients alike, ultimately resulting in heightened market penetration and driving shareholder value.
Rounding out Citi’s focus list is Take-Two Interactive, a video game publisher known for its high-profile titles, including the much-anticipated Grand Theft Auto VI. With a 16% increase in stock price this year, analysts are optimistic about the company’s forward momentum, projecting even more growth as new releases come to market. Citi’s analyst, Jason Bazinet, posits that impending game launches will not only amplify revenue but also engage a vast user base, ensuring the company remains a key player in the entertainment sector.
As the markets approach a new fiscal year, the focus remains on identifying gems that can outperform amidst a sea of options. Investors should consider looking closely at companies such as AT&T, Boston Scientific, and Take-Two Interactive as potential frontrunners for the next year. These stocks showcase the characteristics of robust growth and strategic innovation, making them attractive choices for investors aiming to enhance their portfolios in 2025. As always, thorough research and careful consideration are paramount for making sound investment decisions.