25 Top Stocks To Buy For Up To 97% Upside Heading Into 2025: Ubs

Markets Insider

Ticker: MMM

Market cap: $70.5B

Price target: $184

Upside to target: 42.3%

Sector and industry: Industrials; Industrial Conglomerates

Thesis: "MMM represents one of the most compelling non-volume-driven profit improvement opportunities we've seen in our over 20 years of covering industrial companies. We believe the company's new outsider CEO is hitting all the right notes, including (1) reallocating R&D spending towards reinvigorating growth (currently less than 20% of R&D spend goes to new product development and annual new product introductions are down 85% vs. a decade ago); (2) improving order fill rates (mid-80% to above 90%); (3) investing in the sales force (5,000 strong, but down 25% over the last 5 years); (4) lowering manufacturing and supply chain complexity (95 factories, 110 distribution centers), with single products touching several facilities; (5) leveraging MMM's scale to buy better (80% of the company's raw materials are sole-sourced); and (6) reducing waste (we estimate MMM's raw material waste is about $700 million annually (3% pts. of margin) due to design and manufacturing inefficiencies)."

Markets Insider

Ticker: ALK

Market cap: $8.4B

Price target: $81

Upside to target: 22.7%

Sector and industry: Industrials; Passenger Airlines

Thesis: "A favorable industry backdrop coupled with strong idiosyncratic story given the Hawaiian acquisition provides strong runway for upside for ALK's stock. We believe the industry backdrop is likely to be supportive for the foreseeable future given modest capacity (ASM) plans announced for the next few years from several players. Plus, ALK's P&L should see further upside as it realizes the $500mm + in synergies from the Hawaiian acquisition over a multi-year period. While the stock is up 60% YTD, it is still only trading at 10x our FY'25 EPS and 7.5x our FY'26 EPS estimate. We see room for both EPS and multiple expansion from here."

Markets Insider

Ticker: AMZN

Market cap: $2,360B

Price target: $264

Upside to target: 17.3%

Sector and industry: Consumer Discretionary; Broadline Retail

Thesis: "We summarize our stance on AMZN shares with the phrase 'multiple shots on goal' in terms of opportunities for margin expansion heading into 2025 driven by positive synchronous developments across its key business segments. This includes: 1) ongoing e-commerce fulfillment network regionalization as units growth continues to outpace shipping cost at 12% vs 8% in 3Q24, 2) secular growth driven by ongoing transition from on-premise to cloud given ~85% of global IT spend remains on-premise, and 3) significant runway ahead for Prime Video with ads which continues to ramp across its global markets."

Markets Insider

Ticker: AMT

Market cap: $85.9B

Price target: $245

Upside to target: 33.3%

Sector and industry: Real Estate; Specialized REITs

Thesis: "We believe AMT benefits from strong growth visibility, contractually locked-in demand & inflation protection. We believe inflecting U.S. carrier activity and faster growth internationally is supportive of MSD AFFO/sh growth in 25, accelerating to HSD growth in 26-27. With leverage inside the target range we expect the company to start a buyback in '25. Combined with a more beneficial rate backdrop, we expect sentiment to improve and shares to outperform."

Markets Insider

Ticker: APH

Market cap: $85.1B

Price target: $88

Upside to target: 24.7%

Sector and industry: Information Technology; Electronic Equipment Instruments & Components

Thesis: "We see upside to estimates and positive earnings revisions through 2025 as likely, given: 1) With orders up ~39% y/y in 3Q24 and up ~30% YTD, we believe there could be upside to ~HSD% organic growth, especially in IT Datacom, driven by AI (upcoming NVDA product launches as a catalyst). 2) We remain confident in APH's ability to convert on this growth (high 20s incrementals). 3) We see scope for continued accretive tuck-in M&A (net leverage is around ~1x, suggesting capacity)."

Markets Insider

Ticker: ATZAF

Market cap: $4.2B

Price target: $66

Upside to target: 22.3%

Sector and industry: Consumer Discretionary; Specialty Retail

Thesis: "We think ATZ's investments in differentiated store concepts, increasing relevance among US consumers, diversified product assortment, and digital marketing initiatives should drive sustained comp sales growth. Plus, revenue acceleration from recent store openings and expenses savings initiatives should lead to out-year operating margin expansion. We expect EPS beats over the NTM to drive ATZ's stock outperformance."

Markets Insider

Ticker: CNP

Market cap: $21.2B

Price target: $37

Upside to target: 13.7%

Sector and industry: Utilities; Multi-Utilities

Thesis: "CenterPoint has a strong growth profile at 7.5% EPS growth vs. peer average at ~6.5%, but trades inline with group. The top quartile growth is underpinned by the economic expansion in the Houston metro area driving additional utility infrastructure investments and leading to multiple expansion. Recent political and regulatory headwinds around fallout from Hurricane Beryl impact should dissipate in Q1'25 as we expect the company to reach constructive outcomes in the pending rate case and mobile generation issues. This should remove a key overhang from the stock and we believe push it back closer to the ~10% premium it has traded vs. peers over the past three years."

Markets Insider

Ticker: CGNX

Market cap: $6.1B

Price target: $58

Upside to target: 62.1%

Sector and industry: Information Technology; Electronic Equipment Instruments & Components

Thesis: "We see a unique opportunity to own high-quality growth at a discount. The Machine Vision market downturn which began in 1H22 is nearing an end: continued early cycle momentum in Logistics and Semiconductors, and a positive inflection in short cycle Industrial and Consumer Electronics, should drive an acceleration to double-digit organic sales growth. Combined with outsized operating leverage, we expect EPS to more than double over the next two years."

Markets Insider

Ticker: FIX

Market cap: $15.6B

Price target: $575

Upside to target: 31.1%

Sector and industry: Industrials; Construction & Engineering

Thesis: "FIX participates in robust markets including manufacturing and datacenter construction, which together accounts for ~60% of their revenue. We expect demand to remain strong in the coming years, with constrained trade labor enabling FIX to become selective with projects and command stronger pricing. We expect double-digit organic growth to lead to +15-20% EPS growth as a base case, with M&A (historically very value additive) being incremental to estimates."

Markets Insider

Ticker: COP

Market cap: $122.8B

Price target: $140

Upside to target: 47.2%

Sector and industry: Energy; Oil, Gas & Consumable Fuels

Thesis: "COP recently closed on its MRO acquisition, bulking up its onshore portfolio, and has had early integration success, lifting its deal synergy target from $500mm to $1 billion. We see this larger shale inventory pairing well with the long term visibility provided by COP's low cost of supply global asset base, including Alaska, Norway and Surmont, with a growing global LNG position providing potential cash flow upside. This higher cash flow should make its way to shareholders as we model postMRO capital returns rising to ~$11Bn in FY25, after topping ~$9Bn in FY24."

Markets Insider

Ticker: CYBR

Market cap: $15.7B

Price target: $400

Upside to target: 25.3%

Sector and industry: Information Technology; Software

Thesis: "CyberArk has become one the leading identity security vendors: 1) Proven executional track record on ARR (~1% beats over past 6 quarters) and FCF (on path to 25% FCF margins, with significant upside in past 6 quarters) 2) Large upsell opportunity with machine identity (2.5x upsell vs existing business) that ties into secular trends around securing AI agents. 3) Company has suggested a potential analyst day in 1Q25 following 4Q earnings which could offer a new LT outlook."

Markets Insider

Ticker: DELL

Market cap: $81.1B

Price target: $158

Upside to target: 36.5%

Sector and industry: Information Technology; Technology Hardware Storage & Peripherals

Thesis: "An AI winner at a legacy tech multiple. Dell should be a winner in the AI server market relative to peer HPE across Tier 2 Cloud and Enterprise markets driving at least 10% ISG revenue growth next year. In conjunction with a PC recovery of at least 5% next year, free cash flow should grow 15% in CY25 and low double digits in CY26. With the shares trading at 12% CY26 FCF, the risk-reward is highly favorable given our expectations for a synchronous recovery in end-markets next year."

Markets Insider

Ticker: ELV

Market cap: $85B

Price target: $555

Upside to target: 51.7%

Sector and industry: Healthcare; Healthcare Providers & Services

Thesis: "ELV is the second most diversified MCO in the sector and is viewed as a mini-United. The company has seen weakness in the stock following a difficult environment in their Medicaid business. However, the Medicaid weakness is a time bound situation and the Medicaid rates should improve in the following year as Medicaid rates are updated throughout the year, beginning with January 1, 2025. This should be a continuous tailwind to operating trends in Medicaid throughout 2025 and into 2026. The company's Carelon business also continues to win business and grow and we see the company continuing to garner more clients with peer Blue plans. We see the company eventually returning to their LT outlook of at least 12% growth."

Markets Insider

Ticker: ET

Market cap: $64.4B

Price target: $23

Upside to target: 22%

Sector and industry: Energy; Oil, Gas & Consumable Fuels

Thesis: "We see a strong pickup in natural gas demand driven by: 1) the need to power data centers, 2) coal to gas switching, and 3) LNG exports. ET is well positioned to benefit from this macro trend. ET is trading at a 2025 Consensus EBITDA of 8.1x, while MLP peers are trading at an average 2025 Consensus EBITDA of 9.3x."

Markets Insider

Ticker: FCNCA

Market cap: $181M

Price target: $2,700

Upside to target: 26.7%

Sector and industry: Financials; Banks

Thesis: "We rate FCNCA a Buy, as we think of the bank as an underowned stock with optionality around loan growth, buybacks, and balance sheet optimization. We forecast Global Fund Banking growth of 9%-10% in 2025/2026 (vs 30%+ history), which drives our +6% total loan growth assumption (+1% vs consensus). We expect 14% of EOP shares to be repurchased through YE2025, 13% above consensus. And we think the excess liquidity and FDIC note repayment provide opportunities for NIM improvement after the 1Q25 trough."

Markets Insider

Ticker: FSLR

Market cap: $19.5B

Price target: $360

Upside to target: 97.4%

Sector and industry: Information Technology; Semiconductors & Semiconductor Equipment

Thesis: "FSLR has a near monopoly position in US domestic solar module manufacturing, creating an advantaged market position given the general direction of U.S. policy for domestic manufacturing incentives and tariffs. We anticipate EPS to increase 134% from $13.14 in 2024E to $30.79 in 2027E with incremental upside to long-term earnings from capital redeployment of the $105/sh anticipated FCF 2025-28E. 2025 catalyst include in-coming administration maintaining domestic tax credits in the US Federal budget and FSLR articulating their capital redeployment strategy."

Markets Insider

Ticker: KDP

Market cap: $43.9B

Price target: $42

Upside to target: 29.7%

Sector and industry: Consumer Staples; Beverages

Thesis: "In an environment where top- and bottom-line visibility is very limited across the group, KDP is one of the few names in our coverage where Street estimates (both 4Q and looking out to '25) do not appear to be at risk. The coffee category will certainly remain in focus, but we believe that an acceleration in organic sales growth from 3Q levels (thanks to partnership benefits + the addition of Ghost) provides ample flexibility across the P&L for KDP to deliver on its LT algo even if the at-home coffee category remains more subdued (with Street estimates already calling for only modest +LSD growth in US Coffee). As such, with shares still trading at 16.0x NTM Street estimates (a -25% discount to peers vs. -20% historically) and KDP likely to deliver next year in an environment where many companies struggle to meet their LT targets, we think the set up looking out to '25 is looking increasingly attractive."

Markets Insider

Ticker: LEGN

Market cap: $6.3B

Price target: $65

Upside to target: 90.7%

Sector and industry: Healthcare; Biotechnology

Thesis: "We see the current valuation as an appealing set-up for outperformance as: 1) we think competitive concerns are overdone, 2) Carvykti sales performance could surprise to the upside. The clinical data makes us believe that this could be a duopoly and not necessarily a winner take-all market, which is what is priced-in to LEGN's valuation. Plus LEGN is shifting bulk of Carvykti use to 2-4L Multiple Myeloma, where the competitor Arcellx is 6-7yrs behind."

Markets Insider

Ticker: MA

Market cap: $484.6B

Price target: $610

Upside to target: 15.5%

Sector and industry: Information Technology; Financial Services

Thesis: "Within the Payments, Processors, & FinTech sector, we believe Mastercard provides a balanced exposure to spend (discretionary vs. non-discretionary, goods vs. services, online vs. instore) alongside support from value-added services (approaching ~40% of the business growing high-teens. Mastercard demonstrates attractive qualities, including the ability to compound at an FXN revenue CAGR at the high-end of LDD and GAAP/adjusted EPS CAGR at mid-teens in 2025E-2027E, further operating margin expansion opportunities above a minimum ~55% level, high FCF conversion, deep competitive moats and scale, and expansion into new flows outside of core consumer-to-business volumes."

Markets Insider

Ticker: ORCL

Market cap: $474.5B

Price target: $210

Upside to target: 23.8%

Sector and industry: Information Technology; Software

Thesis: "We believe Oracle can sustain 50%+ cloud infrastructure growth for the next several years, driving an overall topline revenue reacceleration to +10%/14% in FY25/26, materially above Street estimates. We believe this cloud growth will be driven by several idiosyncratic factors: 1) AI related infrastructure revenue driven by backlog conversion from key customers such as OpenAI, xAI, Cohere, and Meta, 2) the ramp of key CPU-based customers migrating from on-prem such as Uber and Vodafone and 3) database migrations to Azure, AWS and GCP from the company's new multi-cloud partnerships. Key catalysts include: datacenter go-lives (both multi-cloud with Azure/AWS/GCP and also Oracle's own datacenters) particularly in F4Q25, additional AI customer wins and go-lives of AI clusters throughout CY25."

Markets Insider

Ticker: RGA

Market cap: $13.7B

Price target: $260

Upside to target: 25.3%

Sector and industry: Financials; Insurance

Thesis: "We believe RGA is well positioned heading into 2025 with management focused on growth and returning capital to shareholders. We see RGA benefiting from favorable global mortality and morbidity trends, supported by medical advancements like GLP-1 drugs, which could drive better-than-expected benefit ratios. Additionally, we see upside to premium growth coming from key growth markets like Asia, driven by strong deal flows and PRT transactions. Management remains focused on their capital position, effectively utilizing Ruby Re, which we believe could lead to upside to capital return. With relatively low sensitivities to economic factors like interest rates, we believe RGA remains a strong defensive pick for 2025, with upside to growth and capital return."

Markets Insider

Ticker: SPGI

Market cap: $151B

Price target: $610

Upside to target: 24%

Sector and industry: Financials; Capital Markets

Thesis: "We are bullish on SPGI as we expect organic growth in the non-ratings segments to accelerate as financial end markets improve and new management executes on growth initiatives and IHS Markit revenue synergies. A greater mix of recurring revenues should also drive multiple expansion. We expect a further recovery in debt issuance over time. Near-term upside to ratings revenues and the potential divestiture of the Mobility business could be catalysts."

Markets Insider

Ticker: SRPT

Market cap: $11.4B

Price target: $188

Upside to target: 58%

Sector and industry: Healthcare; Biotechnology

Thesis: "We think at current levels, the Elevidys launch trajectory (we estimate ~$18B in cumulative Elevidys sales through 2030), DMD base business, and LGMD programs (BLA filing in '25 for LGMD2E) are undervalued. We think the recent deal with ARWR (4 additional clinical programs/rights for additional targets) complements SRPT's existing neuromuscular pipeline and adds potential upside drivers."

Markets Insider

Ticker: TXN

Market cap: $170.5B

Price target: $250

Upside to target: 33.8%

Sector and industry: Information Technology: Semiconductors & Semiconductor Equipment

Thesis: "We expect top analog semi companies to grow a quite strong +12% in 2025 as industrial and auto recover, and for TXN to far exceed this at +30% as it begins to undo its pandemic era share losses (which we view as largely down to business practices during the shortage period, not core competitiveness). Operating leverage should meaningfully expand profitability in 2025 (GM +3% and OM +7%), and investors should begin to look ahead to C2026 when TI's subsidy-driven high capex begins to come down quite substantially, supporting shares further."

Markets Insider

Ticker: ULTA

Market cap: $19.9B

Price target: $490

Upside to target: 14%

Sector and industry: Consumer Discretionary; Specialty Retail

Thesis: "Our view is that too much pessimism is being priced into Ulta shares today. Looking ahead, we believe Ulta can stabilize its business from the near-term challenges it faces today. Longer term, we think ULTA can still provide line of sight to $26 to $28 in EPS power a couple of years out. As it sustains an upward earnings revision cycle, its multiple should retrace to its historical levels."