3 stock split stocks set to rise by up to 50% in 2024, according to Wall Street

Stock splits should not be the primary reason you consider purchasing stock. But it’s no surprise that many of the most popular stocks followed by investors and Wall Street professionals are those of successful companies with a history of delivering superior returns to their shareholders. Therefore, they issue stock splits from time to time to keep their stock prices affordable for individual investors.

AI stocks are currently attracting a lot of attention on Wall Street, but investors need to be careful not to get too involved in one area of ​​the market. Many analysts remain bullish on major consumer brands that report strong growth and have attractive upside potential beyond 2024.

Wall Street pros expect further gains over the next year Amazon (AMZN -0.36%), Celsius Holdings (CELH 2.18%)and Nike (NKE -0.79%) — Three great companies with a history of stock splits. Three of his Motley Fool contributors explain what’s driving the growth of these companies and why now is a good time to buy their stocks.

The economy is recovering and Amazon is poised to win

Jennifer Cybill (Amazon): Amazon split its stock in 2022 when the price exceeded $2,000. The move is the first in more than 20 years, and the 20-for-1 split reflected the stock’s significant growth over that period. The return since the most recent split has been about 24%.

Amazon has been under pressure in several areas over the past few years, but it appears to be on the right track. It maintains a strong lead over its competitors in the fields of e-commerce and cloud computing, and although it recorded a net loss in 2022, its net profit is increasing again. In the third quarter of 2023, it tripled compared to the same period last year. E-commerce has returned to strong growth, outpacing overall retail growth. Amazon is also focusing on efficiency, restructuring its distribution network and cutting jobs. Amazon is well-positioned to benefit as inflation eases and people return to spending.

Similarly, the company’s cloud services division, Amazon Web Services (AWS), has seen revenue growth slow as some customers cut their budgets. Management said there are signs that trends are reversing and customers are starting to increase usage again.

Artificial intelligence (AI) could play a big role in Amazon’s ability to outperform in 2024 and beyond. The company recently released several powerful AI tools for AWS to leverage AI for its e-commerce and advertising businesses. Advertising continues to be a strong growth driver, with revenue increasing 26% year over year in Q3 2023 (compared to a 13% increase companywide).

Amazon stock rose 81% in 2023, but is still 18% off its all-time high. Analyst consensus forecasts are for Amazon stock to rise 17% over the next 12 to 18 months, with a maximum return of 50% and a minimum return of -9%. If Amazon can deliver on his strong performance in 2024, it has a good chance of meeting or even exceeding the highest expectations.

Emerging beverage brands with potential for global growth

John Ballard (Celsius Holdings): The energy drink maker’s stock has returned more than 4,500% over the past five years. In response to the sharp rise in stock prices, the company conducted a 3-for-1 stock split in November. This business is just beginning its long journey to massive growth.

In Celsius’ third quarter earnings update, the company said the 104% year-over-year increase in sales was due to improved product availability and brand awareness.This is the result of a long-term transaction pepsico Being able to tap into the beverage giant’s extensive distribution network to sell their products is a huge advantage for up-and-coming consumer goods brands.

TD Cowen analyst Vivian Eiser has a price target of $83 for Celsius, which represents a 41% upside from Celsius’ current price. Azer sees the first-quarter Canadian launch as another growth opportunity to maintain the company’s momentum in the new year.

The company’s stock trades at a high forward price-earnings (P/E) ratio of 56 times, but as Celsius expands beyond the U.S., the company’s profits will increase significantly due to increased sales, and the stock’s high P/E ratio. may be justified. Analysts expect Celsius’ revenue to grow 55% annually over the next five years.

Identifying top consumer brands while you’re still small can be a profitable investment strategy. Celsius looks like an ideal candidate for investors looking to identify these opportunities.

Typical blue chip play

Jeremy Bowman (Nike): Few stocks have a better track record than Nike. The sportswear giant has dominated the industry for more than a generation, and although it has struggled recently with broader headwinds in apparel and discretionary spending, it remains well-positioned for long-term growth. appear.

Nike also has a long history of stock splits, with seven 2-for-1 stock splits since its initial public offering in 1980. So if he owned 1 share then, he now owns 128 shares.

Nike’s last stock split occurred at the end of 2015, and the stock is up 61% since then, so it may be premature to expect the company to split its stock again now.

But Wall Street is optimistic about the company. The average analyst expects Nike stock to rise 19% this year. dow jones Stocks with the most bullish views by analysts disney. Of the 30 analysts covering the stock, 20 rate it a buy, nine rate it a hold, and one rate it a sell.

There’s good reason Wall Street has confidence in the Swoosh. Nike stock is down 42% from its 2021 highs due to slowing growth and broader demand headwinds facing the company. However, the company has demonstrated its ability to squeeze more profits out of its operations. In the most recent quarter, earnings per share increased 21% to $1.03, even though sales increased just 1%. The company reduced its inventory by 14%, which improved its gross margin by 170 basis points and will benefit from that trend in the coming quarters.

Even if another stock split doesn’t seem imminent, the expected economic recovery combined with the help of lower interest rates should push stocks higher this year.