10 Big Stocks That Have Risen Above and Beyond Fair Value Targets in 2016

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Caterpillar

Caterpillar Inc. (NYSE: CAT) closed most recently at $81.24, but its consensus price target is $71.50. Caterpillar seems to be stuck between a rock and a hard place. Each earnings report, even if not bad, has some disappointment in guidance or restructuring. The global economy just is not great for Caterpillar as so many growth markets are not growing. Still, its shares are up 24% so far in 2016. Despite being only $3 from its 52-week high, Caterpillar remains 30% below its high in the past five years.

The 52-week range is $56.36, the market cap is $47 billion and the dividend yield is 3.7%.

Groupon

Shares of Groupon Inc. (NASDAQ: GRPN) were just trading at $5.10, though its consensus price target was $4.76. The company just recent saw its shares surge sharply on good earnings. Now the stock is up well over 60% so far in 2016, and the company’s turnaround may still have legs to run. The short interest and the low market cap (and a low stock price) also seem to have allowed this run to be more than most investors expected.

Groupon has a 52-week range of $2.15 to $5.28 and a market cap of $3 billion. It pays no dividends, and it is such a new company and in a turnaround that has yet to yield massive profits. That likely will keep its dividend ambitions rather low for quite some time.

IBM

Last seen trading at $160.58, International Business Machines Corp. (NYSE: IBM) has a consensus price target of just $153.90. The shares acted like they wanted to go down to $100 in the last selling wave, but a recovery and hope for value took the stock back above even where many of the more tame analysts expected. The reality is that it’s hard to find that many Big Blue bulls. IBM’s core business remains pressured, but the negativity and low valuations have allowed shares to recover handily for a gain of almost 20% so far in 2016.

IBM’s 52-week range is $116.90 to $163.60, and the market cap is $153 billion. The company has focused more on buybacks than on dividends, but it has a yield of 3.5% after hikes in recent years, despite a lagging stock price.

Lululemon

Lululemon Athletica Inc. (NASDAQ: LULU) closed most recently trading at $76.95, and its consensus price target was $71.93. The company had its share of problems, from see–through pant issues and quality control, and that crushed the valuations for the growth stock. After bottoming out under $40, it was apparently the buy of a lifetime. The stock has hardly pulled back since last October, and its shares are up 49% year to date.

Shares have traded in 52-week range of $43.14 to $78.79, and the market cap is $10.5 billion. Like many other growth stocks, it has yet to pay a dividend.

Silver Wheaton

After hitting a 52-week high of $29.59 on Tuesday (Aug. 2) in the wake of signing a gold streaming deal in Brazil, Silver Wheaton Corp. (NYSE: SLW) closed at $29.23. Its consensus price target is $27.57. The stocks who win from gold and silver prices have screamed higher in 2016, some doubling or tripling off their 52-week lows. This surge in gold caught most investors and analysts off guard from more muted targets at the start of 2016. The reality is that gold and silver stocks have had the best year in many years, and those price targets actually have been rising — but many haven’t caught up.

Silver Wheaton has a 52-week range of $10.04 to $29.59. Its market cap is $12.9 billion, and it has a dividend yield of just 0.7%, but its gain is over 130% so far in 2016.

Travelers

Shares of Travelers Companies Inc. (NYSE: TRV) were last seen trading at $117.03, and its consensus price target was $114.29. This is the Dow stock most people forget about, but it has managed to avoid many of the would-be woes of the banks and other financial players. Still, its performance is only up about 5% in 2016 and about 12% from a year ago. This may be one of those situations where analysts just haven’t wanted to re-rate it on the way up. After all, this stock has more than doubled in the past five years.

Travelers shares have changed hands between $95.21 and $119.30 in the past year. The market cap is $33.7 billion, and the dividend yield is 2.3%.

Wal-Mart

The $69.46 consensus price target on Wal-Mart Stores Inc. (NYSE: WMT) compares to the most recent close at $73.13 a share. One reason Wal-Mart is above the average price target is that the stock was crushed in 2015 after waves of sales disappointments, but then it came back much faster in 2016 after the analysts had lowered their price targets too low. The price seems to run into recent buying and selling that may be undecided, but the price gain has been 22% so far in 2016.

Wal-Mart has a 52-week range of $56.30 to $74.35 and a market cap of $227.5 billion. The dividend yield is 2.7%.

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What’s key is that each stock is above the consensus analyst target for its own reason. Some may keep rising and keep adding insults to the analysts following them. Then again, some might have gotten ahead of themselves, with the Dow up 6% and the S&P 500 up almost 7% so far in 2016. Whatever happens, the reality is that gains of 30%, 50% and even 100% in less than a year are not generally normal.