While the stock market has seen record gains this year, several of its best performing companies may be due for a pullback. Throughout 2024, all three major stock averages have hit high after high. Year-to-date, the tech-heavy Nasdaq Composite has led the charge, surging 30% through Friday. The broad market S & P 500 and the blue-chip Dow Jones Industrial Average , meanwhile, have risen 24% and 14%, respectively. Although the rally is widely expected to continue in 2025 , several prominent stocks may face declines. CNBC Pro, using its stock screener tool , screened for stocks in the S & P 500 whose consensus analyst price target implies at least 5% potential downside, using data as of Dec. 17. Below are a few companies that turned up. Tesla has been on a tear following the victory of President-elect Donald Trump, even though the former president has been viewed as unfriendly to clean energy stocks. Since Nov. 5, the stock has soared about 67% through Friday, just about the entire year’s performance. “Tesla remains the ‘OG meme stock’ and we found this rally to be somewhat reminiscent of the 2020/2021 bull run that took the stock to all-time highs,” Barclays analyst Dan Levy said in a recent note to clients. However, that rally could peter out in the new year, with analysts as a group believing that the stock could fall more than 43% in 2025. Looking to next year, Levy – who rates Tesla only an equal weight – believes the incoming Trump administration is not all good news for Tesla’s business. “Trump Admin policy changes will likely be neutral-to-negative for the Tesla Auto and Energy business,” the Barclays analyst said. “While the curtailment of gov’t subsidies (i.e. the IRA) will harm Tesla’s less profitable competitors more than Tesla and could drive share consolidation for Tesla, it will nevertheless likely be negative for Tesla auto sales, as we estimate that ~2/3 of Tesla’s U.S. sales benefit from the tax credit (~20% of Tesla’s global sales).” For Netflix , shares have moved 87% higher in 2024. But based on their consensus price target, analysts believe the largest streaming platform could pull back nearly 10%. Alan Gould, a managing director at Loop Capital, recently downgraded Netflix to hold from buy , citing its valuation at “historically high” multiples. He believes investors should take profits, believing the stock is “approaching fair value.” Netflix “is trading at 9.4x forward revenue, close to the highs last reached in mid-2021 and only topped in mid-2018,” Gould said in a note last week. “The company is coming off its second best subscriber growth year, partially benefiting from paid sharing, which has now been operationalized, and its best constant currency revenue growth year since 2020.” “We are hard-pressed to get our [discounted cash flow valuation] much above $950,” he said. Broadcom’s shares have surged even more than Tesla and Netflix this year, jumping 98%. Earlier this month, the stock topped $1 trillion in market capitalization for the first time on the heels of better-than-expected fiscal fourth-quarter earnings . But analysts don’t believe the stock will continue to gain next year, forecasting more than 7% downside potential. Other stocks on the list include Texas Pacific Land Corp ., which has advanced 116% year to date and entered the S & P 500 late last month. Analysts see the landowner posting the biggest decline among the stocks that showed up in the screen, projecting a loss of about 53% over the next year.
Wall Street’s unwanted S&P 500 stocks for 2025 may face declines
