As we near the conclusion of 2024, investors are keen to invest in stocks with the potential to outperform in the following year. Recent analyses by Citi highlight a promising lineup of stocks that stand out amid a backdrop of significant stock market gains. With the tech-driven Nasdaq Composite leading the charge at an impressive year-to-date increase of over 33%, followed by the S&P 500’s rise of more than 26% and the Dow Jones Industrial Average’s 15% gain, investors are optimistic as they look forward to 2025. This article examines Citi’s updated focus list, which showcases stocks poised for significant performance in the upcoming year.
In a recent report, Citi U.S. equity strategist Scott Chronert urged clients to focus on a phenomenon termed “earnings growth rate convergence.” This trend suggests that as the sector performance levels out, looking into smaller-cap stocks could yield lucrative investment opportunities. As companies strive for incremental alpha, these smaller firms are becoming increasingly attractive for investors seeking growth. This shift towards finding potential in various market caps is indicative of a broader strategy that could help investors optimize their portfolios as they head into 2025.
Among the fresh faces on Citi’s list, telecommunications behemoth AT&T has garnered particular attention. Despite experiencing a dip in December, AT&T’s stock has outperformed the market in 2024, boasting an impressive rise of nearly 37%. Citi’s analysts maintain a bullish stance on AT&T, projecting a price target of $28, suggesting an approximate 22% upside from current levels. Analyst Michael Rollins emphasizes that the market might not fully recognize AT&T’s potential for sustained growth in its mobility segment. With expected service revenue growth of 2.4% year over year, the company is anticipated to enhance its financial standing, particularly within the consumer wireline segment.
Boston Scientific, another new addition to Citi’s focus stocks, is experiencing tremendous upward momentum. The medical device company’s shares have surged more than 58% in 2024, reflecting robust performance that Citi analysts foresee continuing in the months to come. With a target price of $107—which translates to 17% potential upside—Boston Scientific is on an impressive trajectory fueled by pivotal product launches and portfolio enhancements. Notably, its pulsed-field ablation solutions are expected to drive not just revenue growth but also notable earnings per share growth, positioning the company well for 2025.
A further name gaining attention in this newly revised focus list is Take-Two Interactive, a notable player in the gaming industry. Positioned to launch significant titles, including the anticipated Grand Theft Auto VI, this stock has already appreciated by over 16% this year alone. With analyst Jason Bazinet projecting even greater growth as new game releases approach, the company represents a compelling opportunity for investors. Take-Two’s current target price of $225 signifies roughly a 20% increase from recent closing values, underscoring its potential as a lucrative investment as the gaming market continues to thrive.
As the investment landscape evolves, keeping an eye on emerging trends and high-potential stocks becomes crucial for effective portfolio management. With a focused lens on earnings growth rate convergence and substantial new entrants like AT&T and Boston Scientific, investors have a solid foundation for identifying opportunities that could yield significant returns in 2025. The resurgence of established names alongside burgeoning sectors, such as gaming, signifies a dynamic year ahead. By strategically aligning portfolios with these recommendations, investors may well position themselves for success as they navigate the uncertainties and opportunities that lie ahead in the stock market.