Zhitong App has learned that at the beginning of this year, Bank of America set its year-end target for the S&amp;P 500 index at 4,600 points. The index has already surpassed this level, and Bank of America's stock strategy team predicts that by the end of next year, the index will reach a record-breaking 5,000 points.
Savita Subramanian, the head of stock strategy at Bank of America, said, &#34;The market has absorbed significant geopolitical shocks, and the good news is that we are talking about bad news... We are bullish not because we expect the Fed to cut rates, but because of the achievements the Fed has already made. Companies have adapted to higher rates and inflation.&#34;
Bank of America's stock analysts are also preparing for a strong performance in 2024, as they are busy selecting stocks that are expected to be winners in the coming year. The following three stocks are highly favored by analysts:
Wix.com
Wix (WIX.US) is well-known among web developers. The company's core product is a WYSIWYG website design editor, which provides high-quality website construction services to non-professionals and even those with little knowledge of coding.
Founded in 2006, Wix has gained attention and built a customer base through its &#34;freemium&#34; model, which offers basic services for free to all users and provides more advanced services and upgrades for paid users. The free services include design tutorials and website templates, while the more advanced services include business and e-commerce tools.
Cloud-based design platforms have proven to be popular, and the company has expanded its business globally. Wix offers services in 22 languages and has offices and operations in 12 countries, including the United States, Singapore, India, Germany, Canada, and Brazil.
According to the financial report, the company's revenue in the third quarter of 2023 was $393.8 million, a nearly 14% year-on-year increase, surpassing market expectations. Earnings per share were $0.39, better than expected. It is worth noting that Wix generated $62.8 million in free cash flow (FCF) in the third quarter, accounting for 16% of total revenue. This marks a complete change from the company's previous cash-burning model.
Bank of America analyst Mike McGovern said, &#34;We like Wix's underappreciated margin story and the potential for accelerated growth from new products... We also like Wix's AI strategy, which makes its risk lower than some people think. Wix has a range of new products that utilize artificial intelligence, making it easier for small and medium-sized businesses and individuals to use.&#34; The analyst expects Wix's FCF margin to increase from 4% in 2021 to 25% in 2025.
McGovern rates Wix as a &#34;buy&#34; with a target price of $126.
According to Tipranks data, Wall Street analysts have a consensus rating of &#34;strong buy&#34; for Wix, with an average target price of $123.07, implying an upside potential of 9.5%.
Crocs
Crocs, the pioneer of clogs, has established itself as an iconic brand in just 21 years of operation. Initially known for its unique foam clogs, the company has expanded its product line to include flip-flops, sandals, boots, and even comfortable work shoes. Crocs has even started marketing directly to healthcare professionals, promoting a range of shoes designed for long hours of standing.
Crocs' business is impressive. The company's shoes, including the Crocs and HEYDUDE brands, are sold in 85 countries. The company sells approximately 100 million pairs of shoes each year, generating billions of dollars in annual revenue. Crocs has found its place among the world's top athletic and casual footwear brands.
The company has experienced rapid growth in recent years. Crocs' revenue in 2021 was $2.31 billion, a 67% year-on-year increase. By 2022, revenue reached $3.55 billion, a 54% year-on-year increase. Despite a slowdown in growth, revenue continues to increase this year. In the third quarter of 2023, revenue reached $1.05 billion, a 6.6% year-on-year increase, surpassing market expectations. Adjusted diluted earnings per share increased by 9.4% year-on-year to $3.25, also exceeding market expectations.
According to Bank of America analyst Christopher Nardone, the company's solid growth record is key. Nardone stated, &#34;Crocs has strong momentum, with a compound annual growth rate of 25% in sales since 2019 (14% sales growth year-to-date).&#34; &#34;We believe that the underperformance of the HEYDUDE brand and the market challenges it faces have overshadowed some of its success. We expect Crocs' continued strong sales, coupled with the gradual improvement of the HEYDUDE brand, to drive multiple expansions from its current low levels.&#34;
Nardone rates Crocs as a &#34;buy&#34; with a target price of $128.
According to Tipranks data, Wall Street analysts have a consensus rating of &#34;strong buy&#34; for Crocs, with an average target price of $123.64, indicating a potential upside of 15.4%.
Maravai LifeSciences
Maravai LifeSciences (MRVI.US) is a life sciences company that focuses on researching and developing new diagnostics, drug therapies, and vaccines. The company produces nucleic acid products, catalysts, and various reagents, with a brand technology portfolio that includes over 1,500 patents.
The company claims to have set the standard in areas such as enzyme development and biologic safety testing. Maravai has been a significant player in the nucleotide research field and has expanded into the mRNA field in the post-pandemic era.
However, in recent quarters, Maravai has faced increasing challenges. The company's revenue has been declining over the past few quarters. The company has initiated a cost-cutting plan, including layoffs. Data shows that the company's revenue for the third quarter of 2023 was $66.9 million, a 65% YoY decrease, falling short of market expectations. The net loss was $15.1 million, or a loss of 5 cents per share, also below market expectations.
Maravai attributes the recent significant losses to a faster-than-expected decline in customer demand. The company's stock price has fallen by 54.5% this year.
Bank of America analyst Michael Ryskin acknowledges the challenges Maravai is facing but believes that the company has the ability to weather the storm and regain momentum in the long term. He stated, &#34;Maravai shares were sold off in 2023 due to declining sales related to the pandemic and a slowdown in biopharmaceutical spending. Maravai currently trades at around 20 times the EBITDA for fiscal year 2024, excluding COVID-19 products, which we believe is an attractive valuation for investors and potential strategic acquirers. While recent headwinds may persist into 2024, we believe fundamentals will start to improve, and cost actions will stabilize EBITDA. Given the quality of the assets, the valuation is compelling.&#34;
Ryskin rates Maravai as a &#34;buy&#34; with a target price of $8.
According to Tipranks data, Wall Street analysts have a consensus rating of &#34;moderate buy&#34; for Maravai, with an average target price of $8.71, implying a 40% upside potential.
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According to stock analysts at Bank of America, they predict that by the end of next year, the S&P 500 index will reach a record-breaking 5000 points. They believe that the market has already absorbed significant geopolitical shocks and that companies have adapted to higher interest rates and inflation, thus they are bullish on the US stock market. Three stocks that are highly favored by analysts are Wix.com, BIDU-SWR, and TAL Education. Wix.com is a company that provides website design editors, BIDU-SWR is a Chinese internet company, and TAL Education is a Chinese online education company. These companies have shown outstanding performance in their respective fields and are expected to be winners in the coming year.

Zhitong

BIDU-SW

BIDU-SWR

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Bank of America

Wix.com

Bank of America is betting on the US stock market to reach new highs next year, and these three stocks are expected to be winners.