Value stocks are poised for a comeback in 2025 – Magic Post

Going from worst to first is a concept that often holds true in investing. Stocks that lag the market one year are often some of the best stocks you can own the following year. Although timing the market is difficult, the challenge for investors is finding these stocks before they make a big turnaround.

Fortunately, there are many indicators that can point you in the right direction. For example, you can look at analyst forecasts. When a stock is trading below its agreed price, it is a good indicator that there may be a significant upside that the market has not yet digested.

You may also want to take a look at Washington, DC. The intersection between public policy and investment is not always subtle. In many cases, you can pick a list of winners based on potential policies that Congress will issue.

Public economics is another area to look for evidence. Every month investors get economic indicators on the state of the labor market, housing, manufacturing, commodities, inflation and more. There’s a reason why these reports make headlines; That’s because they drive the markets.

With that in mind, here are three stocks that lagged the market in 2024 and, for that reason, are now considered strong value in 2025.

Schlumberger, Doing Business As SLB New York Stock Exchange: plundered, It is an international oilfield services company formerly known as Schlumberger. The company’s fortunes are closely linked to the oil market. This explains why SLB stock is down 24% in 2024 despite year-over-year fluctuations in revenue and earnings.

Record drilling operations in the United States are suppressing oil prices by keeping the market well supplied. What could be upside for a company like SLB is having downstream companies looking to open new wells.

That could be difficult if President Biden follows through on speculation that he will sign an executive order to permanently restrict offshore oil and gas drilling in certain areas. However, the trend will remain in favor of new drilling, which supports a look at SLB stock.

Analysts expect earnings growth of 7.6% in the next 12 months and have a consensus price target of $58.25 on SLB, an increase of 51% from its current level. It’s important to note that the agreed price comes after a series of price cuts made by analysts since the company announced its earnings in October.

SLB stock also offers investors a strong dividend yield of 2.86%. The three-year average annual growth rate of 4.5% has helped investors stay ahead of inflation.

United Parcel Services Company New York Stock Exchange: UBS It was in a slump for three years which resulted in the stock generating a negative total return of 34.67% for investors. This comes despite a dividend that yields a hefty 5.27%.

The five-year stock chart tells the story. UPS stock reached a record high in 2021 and continued into 2022. However, due to the impact of rising inflation and interest rates on consumers’ budgets, the company generated lower revenues and profits year over year. The company has also been affected by labor negotiations with the truckers’ union.

However, the company posted year-over-year beats on the top and bottom of its third-quarter earnings report, which it released in October 2024. Analysts have a Moderate Buy rating on UPS stock.

The consensus price target of $151.10 gives investors approximately 22% upside and is supported by expectations for earnings growth of 16% in the next 12 months.

While many investors may think… Lockheed Martin New York Stock Exchange: LMT It could have risen as part of Trump’s trade, and LMT stock fell more than 20% in the last three months of 2024. The concern was about the company’s valuation, which has since fallen to a reasonable 17.4 times earnings.

The worry is that the next president will look to negotiate peace for conflicts in Europe and the Middle East. There is also some belief that the DOGE committee will look to cut defense spending, which will have an impact Aerospace stocks and defense stocks.

But Lockheed Martin is not just another defense contractor. It is the largest contractor in terms of revenue and market value. The company’s latest earnings report indicated a $166 billion order backlog across the company’s four business units. For its full fiscal year 2024, the company expects sales of $71.25 billion.

Despite low-single-digit earnings growth expectations, analysts give LMT shares a Moderate Buy rating with a consensus price target of $605.36. This is in line with the company’s dividend, which has yielded 2.74% and been increasing for 22 consecutive years.