Looking ahead to 2024, it seems the S&P 500 is set for a robust performance, though some significant underachievers have put a damper on its full potential. The index is anticipated to close the year up by roughly 23.8%, a striking contrast to the typical 11% average gain seen from 2014 to 2023. However, this growth wasn’t spread evenly. Communication services, leading the pack, have skyrocketed by over 40%, while the materials sector lagged, dipping nearly 2%. Notably, the S&P 500’s top-performing stock soared over 300% this year, whereas the biggest underperformers dropped more than 60%. Let’s dive into the three companies that struggled the most:
Walgreens Boots Alliance has claimed the unwanted title of the worst performer so far, falling over 64%. This marks potentially the largest annual drop in the company’s history and its eighth negative year in the past nine. The stock experienced significant fluctuations throughout the year, particularly as its retail pharmacy sector encountered difficulties. For example, shares plunged over 20% in a single session after a lackluster third-quarter earnings report in June. Conversely, they spiked by about the same amount earlier this month following rumors of a potential sale to private-equity firm Sycamore.
After being a part of the Dow Jones Industrial Average for just six years, Walgreens was replaced by Amazon in February, marking its brief tenure in the renowned index. Wall Street analysts generally suggest holding onto the stock, with LSEG’s average price target indicating a modest rebound potential of about 5%.
Right after, we have Intel, which is on course to end the year with a loss exceeding 60%, marking its worst year historically. Like Walgreens, Intel also exited the Dow this year, making way for Nvidia, a top S&P 500 performer. Intel’s struggles in maintaining its market share against competitors like Advanced Micro Devices, coupled with its slow progress in the AI arena, have taken a toll. CEO Pat Gelsinger recently decided to step down, officially retiring this month.
Most analysts surveyed by LSEG maintain a hold rating for Intel. Despite the lackluster performance, there’s a glimmer of optimism, with a projected upside of over 26% according to the stock’s average price target.
Moderna follows closely, also experiencing a significant drop of more than 60%. Like Walgreens and Intel, 2024 may go down as Moderna’s most challenging year to date. With investor attention shifting from Covid vaccines to the booming weight-loss drug market, Moderna has struggled to keep pace. Earlier this year, the company revised its full-year sales forecast downward, citing market weaknesses in Europe and challenges in the U.S. vaccine sector, alongside announcing over $1 billion in planned cost reductions.
HSBC analyst Yifeng Liu highlighted another factor contributing to bearish sentiment: President-Elect Donald Trump’s choice of Robert F. Kennedy Jr., known for his skepticism towards vaccines, as Secretary of Health and Human Services. Despite the challenges, LSEG’s analyst consensus remains mostly at a hold, but the average price target leaves room for optimism, suggesting a potential rebound of about 87%.
