Here are some of this year’s biggest market movers.
The S&P 500 is on track to finish a volatile and unpredictable year above 3,600 for the first time in history. The health crisis has completely disrupted industries such as travel, retail, and oil and gas, and many stocks in these sectors have taken big hits in 2020. However, the social distancing environment and massive government stimulus measures have also created opportunities for companies in cloud software, e-commerce, online communication and other fields. Here’s an overview of what analysts have to say about seven of the biggest stock winners and losers of 2020.
Winner: Etsy (ticker: ETSY)
Etsy is an online marketplace for unique handcrafted goods and vintage items. Etsy’s business has thrived in 2020. In the third quarter alone, Etsy reported 128% revenue growth and 520% net income growth compared with a year ago. The stock is also up about 300% year to date, making it one of the top performers in the S&P 500 this year. CFRA analyst Tuna Amobi says Etsy is well-positioned to capitalize in secular e-commerce growth, but investors shouldn’t expect it to repeat its 2020 growth performance in 2021. CFRA has a “hold” rating and $165 price target for ETSY stock.
Loser: TechnipFMC (FTI)
TechnipFMC is a large oil services provider with a focus on offshore projects. The oil industry was crushed in 2020 when travel and industrial demand dried up. At one point, West Texas Intermediate crude oil prices even briefly dropped below $0. TechnipFMC shares are down about 54% year to date, making it among the worst-performing S&P 500 stocks. Bank of America analyst Vlad Sergievskii says investors should think twice before buying the dip given the company’s troubling debt levels and bleak outlook. Bank of America has an “underperform” rating and $3.80 price target for FTI stock.
Winner: Carrier Global Corp. (CARR)
Carrier Global provides heating, ventilation and air conditioning, refrigeration and fire/security products. A surge in home improvement projects and a booming housing market have provided a tailwind for HVAC demand this year, and Carrier shares are up about 215% year to date. CFRA analyst Richard Wolfe says heating and ventilation upgrades will play a big role in the economy’s long-term transition to sustainable energy. Wolfe says elevated U.S. residential HVAC demand should continue into 2021. Economic reopenings could also trigger a sharp rebound in transportation refrigeration. CFRA has a “buy” rating and $40 price target for CARR stock.
Loser: Carnival Corp. (CCL)
The cruise line industry took a hard hit in 2020. In March 2020, Carnival canceled all of its scheduled cruises, and its business remained shut down throughout the remainder of the year. In November, Carnival canceled all of its remaining cruises through February 2021. A lost year of business has triggered about a 58% sell-off in Carnival shares, and CFRA analyst Adrian Ng says the debt Carnival has taken on this year will weigh on the stock in years ahead. CFRA has a “sell” rating and $13 price target for CCL stock.
Winner: Nvidia Corp. (NVDA)
Not only is Nvidia one of the biggest winners of 2020, but it also has been one of the best investments of the past decade. Nvidia shares have gained about 125% year to date and are now up roughly 3,460% over the past 10 years. Despite the mind-boggling gains, Bank of America analyst Vivek Arya says it’s not too late for investors to buy Nvidia shares. Arya says Nvidia is a top semiconductor stock pick heading into 2021 given the company’s leading exposure to high-growth tech fields such as gaming, artificial intelligence, cloud computing and advanced autos. Bank of America has a “buy” rating and $665 price target for NVDA stock.
Loser: Occidental Petroleum Corp. (OXY)
Occidental Petroleum’s approximately 50% sell-off this year has created an excellent entry point for investors, unlike the other 2020 losers on this list, according to Bank of America analyst Doug Leggate. He says Occidental has high-quality assets and tremendous capital efficiency, and its top priority in the near term will be reducing its massive debt load. Oil prices have rebounded by about 20% in the past three months, and Leggate says every additional $1 per barrel in oil prices adds $210 million to Occidental’s annual cash flow. Bank of America has a “buy” rating and $29 price target for OXY stock.
Winner: L Brands (LB)
L Brands is the parent company of Victoria’s Secret and Bath & Body Works. The retail sector has taken a big hit in 2020, particularly apparel retailers with exposure to shopping malls. However, L Brands reported 14.1% revenue growth and 231.3% net income growth in the third quarter, and the stock is up about 116% year to date. Bank of America analyst Lorraine Hutchinson says Victoria’s Secret has transitioned from a liability to an asset, and Bath & Body Works is “one of the best growth stories in retail.” Bank of America has a “buy” rating and $50 price target for LB stock.
Winning and losing stocks:
— Winner: Etsy (ETSY)
— Loser: TechnipFMC (FTI)
— Winner: Carrier Global Corp. (CARR)
— Loser: Carnival Corp. (CCL)
— Winner: Nvidia Corp. (NVDA)
— Loser: Occidental Petroleum Corp. (OXY)
— Winner: L Brands (LB)
More from U.S. News