Marked by surging inflation, jumbo-sized interest rate hikes, a darkening outlook on corporate earnings and recession clouds, the S&P 500 Index has lost 21 per cent, on pace for its biggest slump since 2008. From crypto to former pandemic winners and so-called FAANG stocks, investors have been shaken out of their profit euphoria, sometimes in the blink of an eye.
To that can be added regulatory and legal risks, cutbacks from advertisers and a crackdown on targeted ads by Apple. Plus, Chief Executive Officer Mark Zuckerberg’s bet on virtual reality through the metaverse has cost the company billions and isn’t expected to turn a profit anytime soon. Not all analysts are so gloomy, with the average price target implying that the stock will more than double in the next 12 months.It’s been a difficult year for many stocks that not long ago were considered pandemic winners. Prime among them is the online car seller Carvana.
“While the company has been aggressively cutting fixed expense, we also see execution risks as elevated,” Truist Securities analyst Naved Khan wrote in a December note, downgrading the stock to hold from buy.Another lockdown winner turned loser is Peloton. Having lost a large part of its searing 2020 gains last year, the stock has slumped a further 78 per cent in 2022, and now trades a long way below even its 2019 initial public offering price.
Analysts mostly look for the shares to rally in 2023, with the average price target implying 59 per cent upside over the next 12 months.Peloton’s struggles have had a knock-on effect on Affirm, the buy-now-pay-later lender whose revenue was boosted during the pandemic by a partnership between the firms.