From Laggards to Leaders: 3 Stocks Ready to Rebound in 2025

Key Points

• SLB offers impressive value in what is likely to be a resurgent energy sector.
• After a couple of rough years, UPS is ready to start delivering share price growth to investors.
• Lockheed Martin offers good value after the recent sell-off.  

Going from worst to first is a concept that’s often true in investing. Stocks that lag the market one year are often some of the best stocks to own the following year. Although market timing is tricky, the challenge for investors is finding these stocks before they make a big turn. 

Fortunately, there are several indicators that can point you in the right direction. For example, you can look at analyst forecasts. When a stock is trading below its consensus price, that’s a good indication that there may be significant upside that the market hasn’t caught on to yet.

You may also want to look at Washington, D.C. The intersection of public policy and investing is not always subtle. In many cases, you can pick a list of winners simply based on the likely policies to come from Congress. 

The overall economy is another area to look for clues. Every month, investors get economic indicators about the state of the job market, housing, manufacturing, commodities, inflation, and more. There’s a reason why these reports generate headline news; it’s because they drive markets.

With that in mind, here are three stocks that lagged the market in 2024 and, because of that, are now considered solid value plays in 2025.

SLB Is a Strong Choice for a Resurgent Energy Sector

Schlumberger, doing business as SLB NYSE: SLB, is an international oilfield services company formerly known as Schlumberger. The company’s fortunes are closely linked to the oil market. That explains why SLB stock fell 24% in 2024 despite year-over-year beats in revenue and earnings.

The record drilling in the United States is suppressing oil prices by keeping the market well supplied. What would be bullish for a company like SLB is to have the downstream companies looking to open new wells.

That could be tricky if President Biden makes good on the speculation that he will sign an executive order to restrict offshore oil and gas drilling in certain areas permanently. However, the trend will still favor new drilling, which supports giving SLB stock a look.

Analysts are forecasting earnings growth of 7.6% in the next 12 months and have a consensus price target of $58.25 on SLB, a 51% increase from its current level. It's important to note that the consensus price is coming after analysts' series of price cuts since the company reported earnings in October. 

SLB stock also offers investors a solid dividend with a 2.86% yield. The three-year average annualized growth rate of 4.5% has helped investors stay ahead of inflation. 

United Parcel Service Is Getting Ready to Deliver Gains to Investors

United Parcel Service Inc. NYSE: UPS has been in a three-year slump that has seen the stock deliver a negative total return of 34.67% to investors. And that comes despite a dividend that pays a juicy 5.27% yield.

The five-year stock chart tells the story. UPS stock reached a record high in 2021 that lasted into 2022. However, as higher inflation and interest rates impacted consumer budgets, the company has delivered lighter year-over-year revenue and earnings. The company also was weighed down by labor negotiations with the Teamsters union.

However, the company reported a year-over-year beat on the top and bottom lines in its third-quarter earnings report, which it issued in October 2024. Analysts have a Moderate Buy rating on UPS stock.

The consensus price target of $151.10 gives investors approximately 22% upside and is supported by projections for earnings growth of 16% in the next 12 months. 

Lockheed Martin Remains a Leading Defense Stock

While many investors may have thought Lockheed Martin Corp. NYSE: LMT would have surged as part of the Trump trade, LMT stock fell over 20% in the last three months of 2024. The concern was regarding the company’s valuation, which has since come down to a reasonable 17.4x earnings.

The concern is that the incoming president will look to negotiate peace to the conflicts in Europe and the Middle East. There’s also some belief that the DOGE committee will look to cut defense spending, which will impact aerospace stocks and defense stocks.

But Lockheed Martin is not just another defense contractor. It’s the largest contractor by revenue and market cap. The company’s latest earnings report cited a $166 billion order backlog across the company’s four business units. For all of its fiscal year 2024, the company forecasts sales of $71.25 billion. 

Despite low single-digit earnings growth projections, analysts give LMT stock a Moderate Buy rating with a consensus price target of $605.36. And that goes along with the company’s dividend, which has a 2.74% yield and has been increasing for 22 consecutive years.