Defensive Stocks Upgraded for Potential Growth in 2025

Defensive stocks promising significant upside. Analysts are upgrading Walmart, Coca-Cola, and McCormick. With strong EPS growth and favorable price targets, investors may find opportunities amidst economic uncertainties.

Date: 18-01-2025

AI Rating: 7

Earnings Per Share (EPS)
Walmart demonstrated notable performance with adjusted EPS exceeding estimates throughout 2024, particularly achieving a remarkable 14% beat in one quarter. McCormick also solidly beat adjusted EPS estimates in every quarter of 2024, contributing to its stock appreciation.

Price Targets and Upside Potential
Walmart's price target increased to $100, implying a 9% upside from recent prices, showcasing the potential for growth through analyst endorsements. Coca-Cola's upgrades provided an average price target of $73, which translates to an implied upside of nearly 18%. McCormick was upgraded, with a target increase to $90 indicating potential for a more than 25% rise.

Dividend Yields and Stability
Walmart's dividend yield is notably low at 0.9%, which may not attract income-focused investors. However, Coca-Cola offers a stronger dividend yield of 3.1%, providing income stability. McCormick’s dividend yield sits at 2.5%, striking a balance between its peers while highlighting its reliability.

Market Position and Growth Drivers
Walmart's e-commerce sales, demonstrating a 22% growth, are substantial growth drivers, contributing significantly to U.S. comparable sales. McCormick targets 'heat' products which are expected to grow three times faster than traditional products, standing as a key growth strategy.

In summary, the report outlines a favorable outlook for these defensive stocks, particularly in uncertain market conditions, signaling potential upward movement in stock prices due to the analysts' upgrades and solid earnings performance.

Stocks: WMT KO MKC