The S&P 500 has notched more than 50 all-time highs in 2024. Valuations in certain market sectors have seemingly gotten stretched, but there is still plenty of cause to be optimistic about the stock market outlook in 2025.
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Economists anticipate the Federal Reserve will continue to cut interest rates and will likely avoid a hard landing for the economy. Analysts anticipate double-digit earnings growth from S&P 500 companies in 2025. Following his election victory, Donald Trump has pledged to extend the 2017 corporate tax cuts set to expire at the end of the year. In addition, high-growth tech trends such as automation, artificial intelligence and cloud computing could help companies increase efficiency and unlock untapped earnings potential in 2025 and beyond.
Bank of America Merrill Lynch maintains what it calls its “US 1 List” of top investment ideas, comprising U.S. stocks that analysts believe will help investors generate superior performance over the long term. The five best stocks to buy now include stocks from the US 1 List that have the most potential upside based on Bank of America analyst price targets:
| Stock | Implied Upside* |
| RenaissanceRe Holdings Ltd. (ticker: RNR) | 46.6% |
| Eli Lilly & Co. (LLY) | 45.7% |
| Welltower Inc. (WELL) | 40.0% |
| Nvidia Corp. (NVDA) | 39.7% |
| Progressive Corp. (PGR) | 26.0% |
*From Nov. 25 close.
RenaissanceRe Holdings Ltd. (RNR)
RenaissanceRe is a Bermuda-based global provider of insurance and reinsurance. The company has a reputation for being the leading specialist in property-casualty reinsurance, providing insurance coverage to other insurance companies.
The earnings of RenRe and other reinsurance stocks are levered to weather and seismic activity, creating volatility risk. However, it also makes them less correlated to financial markets as a whole.
Analyst Joshua Shanker says a handful of commercial insurance companies have reported a deterioration of their reserves in the past year, causing investors to become concerned about the insurance industry’s balance sheet health as a whole. However, Shanker says RennaissanceRe’s reserves are “rock solid,” and the company remains “best-in-class” among its peers. At the same time, Shanker says investors shouldn’t overlook the company’s $750 million share repurchase authorization, which will help boost RenRe’s earnings-per-share growth.
Bank of America has a “buy” rating and $410 price target for RNR stock, which closed at $279.67 on Nov. 25.
Eli Lilly & Co. (LLY)
Eli Lilly produces brand-name prescription drugs to treat a wide range of medical conditions, including diabetes, cancer and neurological disorders.
Health care stocks were rattled when Trump nominated Robert F. Kennedy, Jr. to be head of the Department of Health and Human Services. Kennedy’s Make America Healthy Again initiative is focused largely on wellness, nutrition and preventative care. MAHA may be good for the American people, but it could be bad news for certain drug and vaccine makers.
Nevertheless, analyst Alec Stranahan says recent weakness in Eli Lilly’s stock price is an excellent buying opportunity. Stranahan says the company’s long-term growth profile is intact, and he is bullish on key drugs Mounjaro, Trulicity and Jardiance. Lilly is also developing an excellent pipeline of drug candidates, including treatments for Alzheimer’s, that could contribute significantly to future growth.
Bank of America has a “buy” rating and $1,100 price target for LLY stock, which closed at $755 on Nov. 25.
[Strategic Technology Trends in 2025]
Welltower Inc. (WELL)
Welltower is a health care real estate investment trust that invests in health care facilities, including senior housing, specialty care facilities and medical office buildings. An aging baby boomer generation will likely ensure high demand for these types of senior housing and medical care facilities over the next decade.
Analyst Joshua Dennerlein says these favorable demographics will help Welltower outperform many of its peers in coming years. In addition, Dennerlein says Welltower’s operating platform is tops in the industry, and its data science capabilities and world-class management team further differentiate the company from competitors. Dennerlein says his price target and earnings estimates for Welltower are the highest on Wall Street, but recent trends in occupancy rates and margin expansion suggest those high expectations are justified. He also suggests Welltower could potentially grow its shareholder distributions by 18% annually through 2029.
Bank of America has a “buy” rating and $190 price target for WELL stock, which closed at $135.75 on Nov. 25.
Nvidia Corp. (NVDA)
Nvidia designs and sells high-end graphics and mobile processors used in personal computers, tablets, smartphones, workstations, data centers and other applications. Nvidia is a market leader in artificial intelligence chips, and the stock has been the single best-performing investment in the entire stock market since its IPO in 1999.
Investors may be hesitant to buy Nvidia shares at a $3.4 trillion valuation after the stock has gained nearly 50,000% since 2009. However, analyst Vivek Arya says Nvidia’s long-term fundamental growth outlook suggests the stock still has plenty of upside ahead. Arya says Nvidia is the undisputed market leader in the conversion of $1 trillion in global legacy infrastructure to accelerated, modernized systems. Demand for its Blackwell chips has consistently outpaced supply, and Arya projects 113.2% revenue growth for Nvidia in 2025.
Bank of America has a “buy” rating and $190 price target for NVDA stock, which closed at $136.02 on Nov. 25.
Progressive Corp. (PGR)
Progressive is one of the largest U.S. auto insurance groups. It is also a market leader in motorcycle insurance and commercial auto insurance.
Shanker says Wall Street is undervaluing Progressive’s earnings power and sustainability. He says Progressive has an opportunity to deliver impressive premium growth and margin expansion. In fact, Shanker says consensus analyst EPS estimates for Progressive are 35% to 40% too low at the moment. Progressive’s recent net personal auto policy growth has exceeded expectations, and Shanker says the company’s unique direct-to-consumer model and massive economies of scale will continue to create value for investors.
Progressive shares have generated a total return of more than 1,000% in the past decade, and Shanker says investors should take advantage of any rare pullbacks in the stock to load up for the long term.
Bank of America has a “buy” rating and $335 price target for PGR stock, which closed at $265.88 on Nov. 25.
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5 of the Best Stocks to Buy Now originally appeared on usnews.com
Update 11/26/24: This story was previously published at an earlier date and has been updated with new information.
