After a horrendous end to 2018, the U.S. stock markets bounced back strong through the first seven months of 2019. The S&P 500 posted a gain of almost 21% through July, which was the best performance over that time frame in 20 years. But even in this bullish environment, not all stocks have posted robust returns. In fact, a number of stocks, including those well-known to investors, actually lost value over that time frame. While most stocks trade down for a good reason, some declining stocks seem poised for a turnaround. If you’re looking to invest in stocks, here’s a list of stocks that have lost value over the past 52 weeks — in some cases, dramatically — but that many analysts still have a “buy” rating on.
1. Netflix (NFLX)
- Price on July 26, 2018: $363.09
- Price on July 26, 2019: $335.78
Netflix is the king of streaming services and one of the most beloved companies on Wall Street. However, its stock is also a notorious high flyer. Although shares are “only” down about 8% over the past year, they’ve sunk 20% from their all-time high of $418.97. In an earnings report released in July 2019, Netflix said it added only 2.7 million paid subscribers during the second quarter — well-below its own forecast of 5 million.
Despite the big subscriber miss in the second quarter, analysts remain bullish on Netflix’s prospects. Morgan Stanley has a $450 price target on the stock, while Piper Jaffray sees the stock at $440. Both targets represent a significant premium to the current price. Netflix continues to add new original programming, and analysts say the return of favorites such as “Stranger Things” bode well for the future. Overall, 27 of 33 analysts covering the stock rate it a “buy.”
2. Tesla (TSLA)
- Price on July 26, 2018: $306.65
- Price on July 26, 2019: $228.04
One reason Tesla has a volatile stock price is because it’s hard to get a handle on the company. Is it a car manufacturer? A renewable energy company? Additional uncertainty comes from Tesla’s colorful CEO, Elon Musk, who in August 2018 suggested the company might go private at $420 per share. Tesla’s so-so financial performance hasn’t helped matters, either. In July 2019, it reported quarterly losses of $408 million, pushing its stock down 10% in after-hours trading.
Opinions about Tesla stock have been divided since the day the company went public. In the investor community, there are both staunch supporters of Tesla and those who see it as a bad bet. This division is reflected in the analyst community, where eight firms have a “strong buy” rating and eight have a “sell” rating. Five analysts rate it a “hold.” On the bright side, Tesla’s earnings are projected to grow by 35% per year for the next five years.
3. Boeing (BA)
- Price on July 26, 2018: $359.32
- Price on July 26, 2019: $345.00
Boeing has been another high flyer on Wall Street, with the stock rising steadily through the latter half of 2018 before peaking at $446.01 in March 2019. Since then, however, shares have plummeted more than 22%. One major problem was the grounding of its 737 Max planes after two fatal crashes. In July 2019, Boeing reported a $2.9 billion loss for its second quarter — its largest ever — after delivering 104 fewer planes and taking a charge related to the grounding of the 737 Max.
A number of Boeing analysts are looking past the 737 Max problems toward brighter skies for the company. Out of 17 analysts following the company, 12 have a “buy” rating on the stock, with an average price target of $427.50. If and when the 737 Max returns to service, a huge weight will be lifted from the stock. Meanwhile, revenue is still increasing in Boeing’s defense and services businesses.
4. General Electric (GE)
- Price on July 26, 2018: $12.64
- Price on July 26, 2019: $10.51
Oh, how the mighty have fallen. One of the stalwart companies in the history of American business, General Electric had been a part of the venerable Dow Jones Industrial Average for 111 years until it was unceremoniously dropped from the index in 2018. The stock has been in a downtrend for years, punctuated by a 56.6% drop in 2018. Shrinking cash flow, a credit rating cut and a crushing debt load have been key factors in the decline of the stock.
Things might be turning around for GE based on the strength of its second-quarter earnings report. The company posted strong cash flow and profit beats, helping to prop up the stock. Although six analysts rate the stock a “hold,” another six have it as a “strong buy” and one rates it a “buy.” GE isn’t expected to set the world on fire financially in coming years, though growth should be steady. Earnings are projected to increase 7.25% per year over the next five years.
5. CVS (CVS)
- Price on July 26, 2018: $66.34
- Price on July 26, 2019: $55.54
Uncertainty regarding the proposed merger between CVS and Aetna, combined with increased government oversight of drug prices and health plans, has put downward pressure on CVS shares over the past year. Those concerns and a lackluster earnings report drove the stock down 8% on Feb. 20, 2019. Shares have steadied some since then, though they’re still well down for the year.
Despite its recent woes, CVS is still held in high regard on Wall Street. Of 21 analysts covering the pharmacy chain, 12 have a “strong buy” on the stock while another analyst rates it a “buy.” CVS is another stock with very high dividend yield and an enticing forward P/E ratio, which recently stood at 3.67% and 8.10, respectively. The average analyst price target is $67.25.
6. Align Technology (ALGN)
- Price on July 26, 2018: $363.02
- Price on July 26, 2019: $198.84
Align Technology was a Wall Street darling in 2017 after its stock price more than doubled for the year, making it the top performer in the S&P 500. For the first three quarters of 2018, the maker of “aligners” (also called “invisible braces”) saw continued stock gains, with its share price peaking at $398.88 on Sept. 25, 2018. Since then, however, the stock has been hammered, punctuated by a dramatic one-day loss of 27% on July 25, 2019. While the stock’s sell-off in late 2018 could be attributed at least in part to the general decline of the overall stock market — the S&P 500 dove 9% in December 2018 alone, contributing to the worst year for stocks in a decade — Align’s midsummer swoon in 2019 resulted from a shortfall in sales, particularly in China.
Align Technology Forecasts
Align CEO Joe Hogan noted that part of the reason for the stock sell-off was that China sales during the second quarter were expected to grow by 70% but instead rose by only “about 20-30%.” Since a high-flying stock and lower-than-expected earnings aren’t a good combination, investors took the company’s share price back down to earth. Those recent difficulties aside, Align is still loved by many on Wall Street. Of 12 analysts covering the stock, 10 have a “strong buy” rating while only two have a “hold” rating. Analysts project that the company will grow earnings at a 23.39% annual clip over the next five years. The company expects sales in China and North America to improve and notes that recent sales growth in Europe has been better than expected.
7. Carnival Corporation (CCL)
- Price on July 26, 2018: $57.67
- Price on July 26, 2019: $47.27
Carnival’s stock price has run into some rocky waters over the past year even as it has delivered decent financial returns. Though the cruise ship operator beat earnings views in its latest report, it cut guidance due to “heightened geopolitical and macroeconomic headwinds.” Carnival also suffered from changes in the U.S. travel policy with Cuba.
Carnival Corporation Forecasts
Although 10 analysts give Carnival a “hold” rating, five have a more favorable outlook on the stock, rating it a “strong buy.” The world’s largest cruise company is expected to post earnings gains of 10.49% per year over the next five years, making its forward P/E ratio of 10.61 look cheap. Carnival’s forward dividend yield of 4.22% should also contribute to share price growth.
8. Amgen, Inc. (AMGN)
- Price on July 26, 2018: $194.05
- Price on July 26, 2019: $175.34
Biotech stocks such as Amgen are often feast or famine for investors. These companies plow billions of dollars into research and development of drugs. If no successes come out of those expenses, the earnings — along with expectations and stock prices — fall. Amgen hasn’t had any unexpected developments over the past year, so its falling share price might simply be a case of waning investor interest.
Recent events could stir a rebound in Amgen’s share price. In June 2019, the company announced promising results for its AMG 510 drug, which is the first KRASG12C inhibitor to reach the clinical trial stage. Amgen’s stock popped 3.4% after the initial data was released. Enthusiasm for the results pushed shares up another 5.7% on July 31. Of 18 analysts covering the stock, seven have “strong buy” ratings while one has a “buy” rating. The remaining analysts have “hold” ratings.
9. Bristol-Myers Squibb (BMY)
- Price on July 26, 2018: $57.92
- Price on July 26, 2019: $45.37
Pharmaceutical giant Bristol-Myers Squibb has suffered over the past year from a combination of slow drug development and a difficult merger with Celgene. The stock fell 7% on June 24, 2019, as the merger was delayed, but a lackluster drug pipeline kept a lid on the stock over the previous 52 weeks despite the company’s strong revenue growth.
Bristol-Myers Squibb Forecasts
Even with its recent problems, Bristol-Myers Squibb still has fans on Wall Street. Five analysts have a “strong buy” rating on the stock. Meanwhile, earnings are projected to rise by about 5% annually over the next five years. The company has long been considered a blue-chip stock, tracing its roots to the 19th century and attracting investors with its steady history of paying dividends. Its yield currently stands at 3.57%. A forward P/E ratio of 10.88 places the stock firmly in the “value” camp.
10. United Rentals (URI)
- Price on July 26, 2018: $150.97
- Price on July 26, 2019: $127.61
Shares of United Rentals declined more than 6% in after-hours trading on July 18, 2019, following a second-quarter report that saw the company top earnings estimates but cut its full-year guidance. This dropped the share price near the bottom of its year-long trading range. One risk for United Rentals, the world’s largest equipment rental company, is that the nature of its business makes it particularly sensitive to global economic cycles.
United Rentals Forecasts
United Rentals still has plenty of support on Wall Street despite its lowered guidance. Six of the 12 analysts who follow the stock rate it a “strong buy” and one rates it a “buy.” Five-year earnings growth is projected at a solid 17.76% per year. Though the company’s outlook disappointed some investors, its quarterly revenue still rose 21% year-over-year while earnings gained 23%. The company cited bad weather and costs involved with an acquisition as the reasons for its lower guidance.
11. Goldman Sachs (GS)
- Price on July 26, 2018: $237.11
- Price on July 26, 2019: $222.14
Goldman Sachs is one of the largest banks in the U.S., so it’s no surprise the firm has endured the same pain as many other financial stocks over the past year. With interest rates low, it’s harder for banks to generate income. Goldman’s stock fell more than 3% in April 2019 after it missed revenue estimates. The company blamed the shortfall on low trading activity and a difficult macroeconomic environment.
Goldman Sachs Forecasts
Goldman still has plenty of supporters on Wall Street, with four analysts giving the stock a “strong buy” rating. A 2.48% forward dividend yield coupled with an 8.73 forward P/E ratio makes it a value-seeker’s delight. Indeed, things seem to be turning brighter for Goldman’s stock price. Even though shares are down over the past 52 weeks, they’ve gained nearly 30% in 2019 thanks partly to a strong second quarter. The firm’s Marcus consumer finance division has been a particularly strong performer, having gathered around $48 billion in deposits as Goldman broadens its focus to reach new customers.
12. BorgWarner (BWA)
- Price on July 26, 2018: $44.47
- Price on July 26, 2019: $39.16
BorgWarner, a vehicle technology company, has suffered from concerns over international tariffs along with a general malaise in the auto industry. These and other issues pushed the company’s stock price down more than 15% in May 2019 alone. Shares continued to weaken two months later when BorgWarner reported that second-quarter earnings declined 15% from the prior year and fell short of consensus estimates.
BorgWarner’s low consensus forward P/E ratio of 8.96 is likely one reason six analysts have a “strong buy” rating on the stock and one has a “buy” rating. The consensus price target on the stock is $46.11 — a significant premium to recent prices. BorgWarner plans more aggressive cost-cutting to help turn financial results around.
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About the Author
After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.