On the Agenda
- Eli Lilly LLY : With $28 billion in annual sales, its diabetes drug Mounjaro’s $1 billion quarterly revenue, and potential $100 billion revenue from obesity treatment, Eli Lilly is poised for growth.
- Meta Platforms META : Boasting 3.8 billion monthly users and a 145% stock surge this year, Meta’s AI-driven engagement and ad powerhouse status hint at a promising future.
- Amazon AMZN : From $91.4 billion in 2016 to $220 billion in online sales last year, coupled with its booming advertising and AWS arms, Amazon remains an eCommerce juggernaut.
As we say goodbye to 2023, there’s a compelling argument to keep your portfolio anchored in growth stocks next year. From a sizable correction in 2022 to a volatile 2023, many growth stocks to buy now present tempting valuations, attracting savvy investors. Bank of America BAC has even thrown its hat into the bullish ring, forecasting that the S&P 500 index might rise to a landmark 5,000 this year. Moreover, whispers from the corridors of major banks hint at a potential rate cut by the Federal Reserve. Historically, such an expansionary monetary move paints a positive backdrop for markets.
Yet the journey isn’t without its turbulence. Investors, with their eyes on the future, remain vigilant over macro-headwinds, including high inflation, rising interest rates, and the specter of a looming recession. However, once growth stocks gain traction in a more risk-off environment in the upcoming months, slowing them down will become a Herculean task.
Eli Lilly (LLY)
Eli Lilly paints a promising picture in pharmaceuticals, with a robust $28 billion in annual sales and more more upside on the horizon. Its diabetes drug, Mounjaro, has carved its niche, generating a whopping $1 billion in revenue last quarter. Moreover, with the FDA’s “fast-track” designation, the anticipation for its approval as a weight-loss treatment is reaching a fever pitch. Clinical trials have showcased a significant mean weight reduction of 26% or more among participants, positioning it for massive long-term gains as a treatment for obesity. Analysts are forecasting a wide revenue spectrum, reaching up to a staggering $100 billion annually. In addition, Donanemab, its Alzheimer’s treatment, is navigating the regulatory channels and is likely to bring in a massive windfall in sales.
Despite Eli Lilly’s stock rising over 50% this year, its current stock price is approximately 4.4% below its mean target of 569.53 and about 9.5% below its 52-week high of 601.84.
Meta Platforms (META)
Meta Platforms boasts an impressive 3.8 billion monthly users, offering advertisers an unmatched global canvas to work with. Facebook user engagement makes Meta an advertising powerhouse. And the company has a strong pipeline, with emerging stars such as Threads and Reels queued up. Additionally, Artificial intelligence isn’t just a buzzword for Meta, driving a 7% uptick in platform engagement.
To be sure, last year’s more than a 60% stock price drop was more than a hiccup but Meta’s shares have rebounded robustly, rising more than 145% this year. This resurgence is anchored in strong top and bottom-line beats in the past couple of quarters. Nudging a market cap of $769 billion, Meta is tantalizingly close to the coveted trillion-dollar league. Analyst sentiments echo this optimism, forecasting a 24% stock price leap in the coming year.
Amazon (AMZN)
Investors would do well not to forget Amazon’s fundamental strengths — in particular, its commanding share of some of the world’s biggest markets and the famous “Amazon flywheel” effect. By focusing its efforts on cost minimization, it offers unbeatably low prices, enhancing the overall shopping experience. This draws a flood of online traffic, making it a magnet for third-party sellers, enriching product variety and quality.
With over 200 million loyal Amazon Prime members reaping perks such as swift shipping, generous discounts, and entertainment options, including Prime Video, customer loyalty is at its peak. This commitment to its massive consumer base is reflected in Amazon’s dazzling financials, with online store net sales surging from $91.4 billion in 2016 to $220 billion last year.
Further turbocharging Amazon’s growth is its blossoming advertising arm, ballooning from revenues of $19.7 billion in 2020 to $37.7 billion in 2022. Moreover, its cloud service in Amazon Web Services has been another game changer for the company, generating sales at a relatively modest $21 million to $80 billion last year. Additionally, the stock is up almost 50% for the year, still offering over 39.6% upside based on analyst estimates.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Equities.com Guidelines.
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