3 Stocks Poised to Bounce Back After a Brutal 2023
While 2023 was a good year overall for the stock market, not every company shared in the gains. The S&P 500 index rose 24% last year, but most of that growth came from a handful of mega-cap technology stocks known as the Magnificent 7, many of which are closely associated with the red-hot field of artificial intelligence (AI).
Numerous stocks continued to decline in 2023 and their shareholders only saw red during the year. Reasons for the decline include poor financial results, difficult economic conditions, and geopolitical events outside of management’s control. That said, things are looking better for many of last year’s laggards. As we begin a New Year, expectations for a turnaround are rising. Here are three stocks poised to bounce back after a brutal 2023.
Taiwan Semiconductor Manufacturing (TSM)
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Taiwan Semiconductor Manufacturing (NYSE:TSM) looks to be back on track after a difficult time in 2023. TSMC, as the company is commonly known, struggled last year with a drop in demand for consumer electronics such as smartphones and laptops. The decreased demand left smartphone and computer makers with excess inventories of the microchips and semiconductors that TSMC makes. As a result, sales suffered and TSM stock fell 27%.
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But now, TSM stock is rebounding and up 7% after the company issued strong fourth-quarter financial results that beat Wall Street expectations right across the board. The world’s largest manufacturer of microchips and semiconductors reported Q4 revenue of $625.53 billion New Taiwan dollars ($19.62 billion U.S.), which topped consensus forecasts of NT$618.31 billion. Profits also beat Wall Street forecasts. Most importantly, TSMC’s CEO C.C. Wei gave an upbeat forecast for the year ahead, saying the company is well-positioned to capture current and future growth opportunities.
Alcoa (AA)
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Few stocks had it as bad in 2023 as aluminum producer Alcoa (NYSE:AA). Shareholders of the Pittsburgh-based company watched in horror as AA stock plunged 46% over the past year and hit its lowest level since the onset of the pandemic in 2020. Alcoa’s earnings and stock have been impacted by weak commodity prices, with benchmark aluminum prices declining 15% throughout 2023. However, those troubles might now be in the company’s rearview mirror.
Alcoa just reported better-than-expected Q4 earnings. The company announced an earnings per share (EPS) loss of 56 cents and sales of $2.60 billion. Wall Street had been looking for an EPS loss of 84 cents and revenue of $2.60 billion. A year ago, Alcoa lost 70 cents a share. In its earnings release, Alcoa’s management team said that the company is likely to ship 2.30 million tons of aluminum in 2024, which is in line with analyst estimates.
Moderna (MRNA)
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The heyday of the pandemic seems like a distant memory at biopharmaceutical company Moderna (NASDAQ:MRNA). Owing to declining global sales of its COVID-19 vaccine, MRNA stock has fallen apart, dropping 49% in the last 12 months. The company’s share price is down nearly 80% from the peak it reached in September 2021 when its COVID-19 vaccine orders were rising. However, Moderna’s shareholders recently got some good news through an analyst upgrade.
Earlier in January, MRNA stock rose 13% on news of a bullish analyst report from investment bank Oppenheimer (NYSE:OPY). The analysts at Oppenheimer upgraded Moderna’s stock to an “outperform” (buy) rating and said that the company could bring as many as five new medications to market by 2026. The investment bank is bullish about Moderna’s drug pipeline which includes an experimental vaccine that protects the elderly from respiratory syncytial virus (RSV).
Moderna also has a flu vaccine in development, along with a cancer vaccine, both of which could come to market in the next few years, according to Oppenheimer. In its most recent earnings report, Moderna said that it expects revenue to fall to $4 billion this year before growing again in 2025.
On the date of publication, Joel Baglole 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 InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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