“Five Stocks Surge Up to 87% Following Fed Rate Cut”

Five Stocks Soaring Up to 87% After Fed Rate Cuts in a No-Recession Scenario

Recent analyses reveal that the S&P 500 typically gains over 18.5% on average in the year following the first Federal Reserve rate cut.
Based on historical performance, analysts have pinpointed the best-performing stocks in a soft landing economic scenario, where inflation control occurs without economic slowdown.
But which stocks may benefit from a Fed rate cut? With traders already leaning toward a 50 basis point reduction, bringing the benchmark rate to a range of 4.75-5%, what can we expect in equity markets?

An aggressive cut could have adverse effects on stock prices.
While stocks often see more significant rises with gradual cuts, each rate cut cycle differs.
Analysts emphasize monitoring corporate earnings growth to identify companies with the highest growth potential.

1) Nike

Nike’s shares surged up to 87% following the last Fed rate cut, despite facing a challenging period with declining sales, which led to over a 25% drop in price year-to-date.
Though analysts forecast a dip in 2025 EPS to $3.09, they predict returns to growth at 16.35% and 10.58% for the subsequent two years.

2) Amgen

Amgen’s stock has achieved a 16.70% gain since the start of the year, reaching new all-time highs of $346 in May.
The shares have outperformed both the pharmaceutical sector and the S&P 500, bolstered by strong Q2 results confirming long-term revenue growth.
Current trading at a PE ratio of 16.38 versus the sector’s 20.49 makes Amgen particularly appealing.
Since the last rate cut, the company’s value has risen by 86%.

3) UnitedHealth Group

According to analysts, UnitedHealth Group could deliver above-average market returns.
Following the recent Fed rate cut, the company has grown 72% over the next year.
Although trading near record highs of $607, it consistently shows growth in earnings per share and a 22% average dividend increase annually.
However, it’s crucial to note that the latest dividend payments used 115% of its cash flow, raising sustainability concerns for future growth.

4) Paychex

Paychex has seen steady growth since 2020, with a remarkable 51.5% increase after the last Fed rate cut in a no-recession environment.
The American HR and payroll service provider has a robust history of rising earnings, with analysts predicting a 20% earnings boost in the coming years and setting a target price of $187.42, above its current $135.

5) Walmart

Walmart also ranks among the top stocks that surged post-Fed rate cuts, experiencing over 50% growth year-to-date.
Despite being perceived as overvalued with a PE ratio of 21.5, the retail giant reported a 20-basis-point increase in operating margin to 5.7%, propelled by e-commerce and advertising.
With an estimated $9 billion in liquidity, Walmart’s strong financial position enables ongoing reinvestment and dividend distribution.

For further insights, read about why Apple’s stocks aren’t recommended for purchase at this time according to Buffett.

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