Underperformers of 2023 are poised to make a comeback

It hasn't been an easy start to 2023 for all stocks. Some have struggled to start the year but could prove to be strong later on.

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Investing bets that the Federal Reserve will pause its tightening campaign this spring have boosted the major averages to start the year. Meanwhile, the S&P 500 has advanced in four out of six weeks to start the year thanks to an increase in interest in artificial intelligence stocks.

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According to Trade Algo, analysts expect that these stocks will make a comeback, despite underperforming this year.

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Over 75% of analysts covering these stocks have given them a buy rating, and their price targets for the next 12 months are at least 10% higher than current prices.

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According to analysts’ ratings and price targets, Halliburton is due for a comeback. The energy stock has declined slightly to start 2023 after surging more than 72% last year. According to consensus estimates from Trade Algo, more than 79% of analysts still have to buy ratings for the stock. In the next 12 months, they expect shares to jump 26% more.

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A top pick for 2023, Halliburton was named by JPMorgan in December, according to JPMorgan. The company said it would benefit from “strong upstream spending growth in both international and North American markets, potential shifts to shareholder-friendly capital return frameworks, and strong performance in the field”..”

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Trade Algo also identified Constellation Energy. Despite being spun off from Exelon last year, the power generator stock is little changed in 2023, much lower than the S&P 500's more than 7% gain. Nevertheless, more than 78% of analysts love the stock and predict a 16% rally.

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According to Trade Algo analysts, Constellation Energy is a major beneficiary of the Inflation Reduction Act. "We believe the current stock price does not reflect this fact," Fowler said.

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A FactSet consensus estimate predicts T-Mobile will also see big gains from current prices. This Wall Street favorite carries a buy rating from 78% of analysts.

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Scott Chronert, Citi's large-cap strategist, picked T-Mobile as a "defensive addition" in January, noting that the telecommunications company has a "strong operating momentum and an opportunity to realize merger-related synergies."

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Targa Resources and AES are also on the Trade Algo list.

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