Shares are priced to rise in 2025 News ad

When liquidations and profits occur at the end of the year, investors sit on newly minted money, waiting to be put to work again. Of all the investment trends in the market and all the stocks that could outperform expectations, which ones could provide the best opportunities between now and 2025? Well, there is an answer to this question too, and it is in a method that traders like to use at hedge funds and investment banks.

This method is often referred to as “top-down analysis,” where investors need to make sense of the world from above and then find themselves in specific industries and stocks loaded with tailwinds and momentum for the coming months or quarters. Understanding that the new United States administration will promote domestic business development by focusing on the new demands of the energy sector, business services sector and transportation companies will be a winning perspective.

From this funnel to selected industries, it will be easier for investors to hold stocks like Exxon Mobil Company. New York Stock Exchange: gold And Transocean LLC. NYSE: INSTALLATION taking into account the new potential demand for oil. Efficiency and high-margin services for businesses responding to increased activity could then spark a rally in the economy. Shopify Inc. NEW YORK: STORE and even Alphabet Inc. NASDAQ: GOOGLE.

Finally, all the raw materials and finished products that need to be transported will likely require Old Dominion Freight Line Inc. NASDAQ: ODFL or XPO Inc. New York Stock Exchange: XPO to get the job done.

Why rising business activity could soon push oil stocks to new highs

As business growth continues to impact the United States economy, demand for oil is likely to follow as a spillover effect. From production and storage to transportation and shipping, oil will play a crucial role in the growing trends of domestic business activity in the country.

But not all stocks are created equal; Companies higher up the value chain, such as Transocean, are set up by their business model to be paid first. When oil demand rebounds, causing prices to rise, equipment lessors like Transocean are usually the first to see the impact of new orders, especially since capacity is so tight right now.

That’s why analysts are willing to raise the price, with analysts at Susquehanna maintaining a positive rating on the stock while setting a price target of $6.50 per share for Transocean. To meet these estimates, the stock would need to rise as much as 58.5% from where it is trading today.

However, this huge upside comes with a risk, and that’s a high beta of 2.7.

Investors can still access oil with a much lower beta of 0.9 through Exxon Mobil.

The company maintains a $140 price target from Morgan Stanley, implying 24.8% upside from current levels. Besides this,

Exxon Mobil’s integrated business model, strong cash flows and history of stable dividend payments can provide greater stability and resilience compared to more volatile players in the sector.

Shopify and Alphabet services provide a path to efficiency and growth

More export demand needs to be created to stimulate the domestic economy, especially manufacturing and other sectors, and one way to do this is to depreciate the dollar. When and if such currency movements occur, companies will find themselves in a situation of rising inflation due to demand and falling currencies.

But it’s good news for services like Shopify and Google parent Alphabet Inc., which can automate the process of hiring and managing clients more cheaply and efficiently.

Even if capacity remains limited and there is not enough time to move parts during a surge in demand, many backend processes can be automated here.

This is especially true if products start to be shipped in and out of the country due to currency fluctuations, which is where Shopify can come into its own. Analysts at Loop Capital agree with this trend, as they raised the stock from Hold to Buy effective December 2024, this time also with a $140 price target, expecting a net upside of 24.4%.

The same can be said for Alphabet stock, which has recently made breakthroughs with Google in other areas such as quantum computing.

Despite the stock’s 45.7% gain over the past 12 months, analysts at Pivotal Research believe it could push growth another 16.3% based on its $225 price target set for October 2024.

Given Alphabet’s unprecedented reach in search, advertising and cloud services, as well as its successes in cutting-edge areas such as artificial intelligence and quantum computing, investors have plenty of reasons to remain optimistic.

Transport stocks contribute to the recovery in business activity

After 25 months of contraction, the manufacturing PMI could be poised for a strong rebound, putting trucking stocks like Old Dominion and XPO at the forefront of a potential industry recovery. These factors make them an attractive option for using your spare cash.

Stephens analysts view Old Dominion as an Overweight stock with a price target of $240, which is 17% higher than the share price that trades today. Old Dominion’s established reputation for operational efficiency, its broad service network and improving industry trends suggest that patient investors can benefit from the next stage of the production cycle.

As for XPO, this trend continues to evolve. Citigroup analysts rated the stock a Buy as of November 2024 and raised their estimate to $179 from the previous $155 per share.

To prove this new valuation correct, XPO stock would have to rise 14.3% from today’s price.

Given XPO’s established presence in the logistics and transportation sectors, as well as ongoing supply chain optimization and growing demand for efficient delivery solutions, investors have plenty of tailwinds supporting the stock’s potential to achieve these ambitious goals.

Before you consider Exxon Mobil, you should hear this.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts were quietly telling their clients to buy now, before the broader market caught on… and Exxon Mobil wasn’t on the list.

While Exxon Mobil currently has a Moderate Buy rating among analysts, the top-rated analysts think these five stocks are Strong Buys.

View five stocks here