2024 laggards due for a comeback this year, according to Jefferies

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2024 laggards due for a comeback this year, according to Jefferies

Some laggards from 2024 could be due for a swing to the upside in the new year, according to Jefferies. “Similar to Momentum’s strength, dispersion between winners & losers has been much wider than normal,” the firm’s analysts wrote in a Wednesday note to clients. “We see the gap narrowing in ’25.” The analysts noted that the best small-cap names trade around 2.6 times sales, while the best mid-cap names trade around 3.2 times sales. “Momentum has weakened, we think more to go,” they continued. In anticipation that the gap between last year’s winners and laggards will narrow, Jefferies screened for buy-rated stocks that underperformed in 2024 but could be due for outperformance amid signs of improvement. Here’s what came up on the list. Align Technology fell 23.9% in 2024, but shares could be set up for a turnaround. Year to date, shares of the medical device company have slid more than 3%. In the post-earnings trading session earlier this month, the stock gained about 1% despite the company missing earnings and revenue estimates for the fourth quarter. Align also forecast full-year revenue growth in the low single digits compared with the year before. “4Q results offered some signs that case volume might be stabilizing globally although we remain somewhat cautious given the sluggish overall dental macro trends,” the firm, whose $260 price target reflects more than 28% upside from Tuesday’s close, wrote in the note. “This puts more emphasis on the innovation pipeline, but we expect new products like the Invisalign Palatal Expander and the next generation Lumina scanner will be a tailwind to growth in F25.” A majority of analysts on Wall Street are bullish as well. Jefferies is among the 11 out of 18 analysts covering the stock that have a strong buy or buy rating, according to LSEG. Align also has a $258 consensus target, which implies more than 27% upside potential ahead. While automotive services company Valvoline shed 3.7% last year, shares have outperformed the broader market already in 2025, gaining more than 5%. The S & P 500 , meanwhile, has risen more than 4% in the same *******. That momentum just might continue in the months ahead. Along with its buy rating, Jefferies has a target of $49, implying more than 35% upside, as of Tuesday’s close. “We highlight Valvoline as a top pick in ’25 supported by steady industry tailwinds in growing vehicle PARC & vehicle miles traveled (VMT),” the firm wrote. “We also expect VVV continues to see market share gains in highly fragmented quick lube industry as customer base growth is fueled by new unit openings (FY25 guide of 160 to 185 new units) and investments in customer service, while seeing further tailwinds from continued momentum in higher margin service mix.” Jefferies’ stance joins seven other analysts out of the 15 covering the name that have a strong buy or buy rating. Valvoline also has a consensus target of around $44, which reflects more than 22% upside. Beverage company Celsius also made the screen after having plummeted 51.7% in 2024. While the stock has fallen more than 2% this year, shares jumped 12% on Wednesday ahead of its fourth-quarter earnings results due out after the bell on Thursday.

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