S&P 500: 7 stocks will make you 46% richer than the ‘Magnificent 7,’ analysts say

By | September 15, 2023

The S&P 500’s “Magnificent Seven” stocks are about to lose ground, analysts say. But will investors be able to figure this out in time?


Analysts say there are seven S&P 500 stocks included SolarEdge Technologies (SEDG), Discovery by Warner Bros (WBD) e Etsy (ETSY), will rise an average of 68.1% over 12 months, says an Investor’s Business Daily analysis based on data from S&P Global Market Intelligence and MarketSmith. This is the highest expected gain for all seven stocks in the S&P 500 Index.

And it also wipes out the average 15% gain that analysts are calling for from the so-called Magnificent Seven stocks that have generated most of the gains this year. But some of these lost momentum in September as other sectors turned on the jets.

Would you like to earn an extra $5,298 on your $10,000?

Moving away from the Magnificent Seven could pay off handsomely if the analysts are right.

If the seven analysts’ favorite stocks gained 68% in one year, as analysts predicted, that would turn a $10,000 investment spread evenly across the seven stocks into $16,808.

This is a big improvement over the $11,510 you would have if you invested the same $10,000 in Magnificent Seven stock. The Magnificent Seven are Nvidia (NVDA), Meta platforms (HALF), Amazon.com (AMZN), Microsoft (MSFT), Apple (AAPL), Alphabet (Google Tesla (TSLA).

But which stocks in the S&P 500 are analysts’ favorites today?

Is SolarEdge good for a double?

Analysts are all but pounding the table for SolarEdge, a maker of equipment used in solar installations. They call for the stock to reach 143.80 per share in 12 months. If this were correct, the upside would be more than 103%.

That’s a much bigger benefit than analysts see coming from any of the Magnificent Seven stocks. That’s even higher than the 40.6% gain analysts expect from Nvidia a year from now, and that’s the highest among the Magnificent Seven.

It’s important to note that the analysts’ target has been too high all year. SolarEdge shares are down nearly 50% this year. But it’s not just a dead cat bounce game either. Analysts believe the company’s adjusted profit will rise 55.5% this year and another 23% in 2024.

The analysts’ other “magnificent” choices

Wall Street remains bullish on the still-disjointed entertainment giant, Warner Bros. Discovery. Analysts believe the stock will reach 20.11 in 12 months, which would represent an upside of more than 71%.

This is the case of a stock that equity analysts believe will continue to perform. It’s already up 22% this year, outpacing the S&P 500’s roughly 18% gain. Once again, there’s fundamental power behind analysts’ predictions. Warner Bros. Discovery is expected to return to profitability this year, reporting net income of $3.7 billion on an adjusted basis, or 89 cents per share.

And next year, the company is expected to reach GAAP profitability. And analysts believe adjusted earnings will rise more than 50% to $1.34 per share.

Analysts are not always right

It is important to note that analysts’ forecasts are not always right and very often they are wrong. So far, all but one of analysts’ favorite stocks for next year are down.

Additionally, some of their top picks face huge hurdles. The analysts take care of it General Motors (GM) will rise more than 53% in a year, even as its workforce is poised to strike. And that’s not even including its poor performance so far in the EV market. GM’s adjusted profit is expected to decline nearly 10% in 2024.

But one thing is clear. Be careful to ignore any S&P 500 stocks other than the Magnificent Seven. You may miss out on some bigger gains.

Are the S&P 500 stocks better than the magnificent seven?

Analysts’ top picks for 12-month upside

Agency Ticker Higher than analysts’ target
SolarEdge Technologies (SEDG) 103.3%
Discovery by Warner Bros (WBD) 71.4
Etsy (ETSY) 63.0
Alaska Air Group (ALK) 60.8
Insulating (PODD) 62.9
Modern (MRNA) 61.7
General Motors (GM) 53.5
Average 68.1%
The Magnificent Seven
Nvidia (NVDA) 40.6%
Meta platforms (HALF) 16.9
Amazon.com (AMZN) 16.6
Microsoft (MSFT) 15.0
Apple (AAPL) 14.3
Alphabet (GOOGL) 9.0
Tesla (TSLA) -6.8
Average of Magnifico 7 15.1%
Source: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter (X) @mattkrantz


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