Some stocks seem to hog the limelight, and that's understandable, to some extent. After all, stocks that have been at the forefront of the hottest trends and delivered tremendous gains arguably deserve greater attention than others.
However, this also means that investors can find great opportunities with stocks that aren't at the center of attention. Wall Street thinks these three stocks are hidden gems that could soar 43% to 59% higher over the next 12 months.
1. SLB
SLB (SLB -0.48%), previously known as Schlumberger, ranks as one of the world's largest technology companies serving the oil and gas industry. It offers digital and integration solutions, reservoir performance technologies, well construction services, and production-system technologies.
While the overall stock market has boomed over the last 12 months, SLB has been a bust. Its shares are down more than 15%, with plenty of up-and-down swings.
The decline has made SLB quite cheap. The stock's forward earnings multiple is below 13.5x. Wall Street is bullish about it, too, with the consensus 12-month price target reflecting an upside potential of 43%.
SLB's underlying business appears to be on solid ground. The company's revenue increased by 14% year over year in the fourth quarter of 2023, with adjusted earnings soaring 21%. CEO Olivier Le Peuch predicted in the Q4 update that SLB will enjoy "another year of strong growth" in 2024, with international markets especially providing a catalyst.
2. Alibaba Group Holding
Alibaba Group Holding (BABA 0.59%) is one of the biggest Chinese technology companies. It runs a popular e-commerce platform, operates a global logistics network, is a major cloud services provider, and distributes mobile games and movies.
Although Alibaba was a hot stock from its initial public offering (IPO) in 2014 through late 2020, it's been a different story since then. Concerns about the Chinese economy have weighed heavily on the stock, which is now down more than 75% below its peak and 30% over the last 12 months.
Analysts see a big opportunity with this steep pullback, though. Of the 48 analysts surveyed by LSEG in February, all but one rated the stock as a buy or a strong buy. The average 12-month price target for Alibaba is nearly 56% above the current share price. Shares also appear to be dirt cheap, trading at only 7.8x forward earnings.
Alibaba thinks its stock is attractive, too. The company's board of directors recently approved a huge increase of $25 billion to its stock buyback program. Alibaba now has more than $35 billion to spend on share repurchases over the next three fiscal years.
3. Royalty Pharma
Royalty Pharma (RPRX -0.39%) is no doubt the least familiar of these three stocks for many investors. It buys royalties for biopharmaceutical products and provides funding to biopharmaceutical companies. Royalty Pharma owns royalties on over 35 approved products, notably including Vertex Pharmaceuticals' cystic fibrosis drugs and blood cancer drug Imbruvica, which is marketed by AbbVie and Johnson & Johnson.
Like SLB and Alibaba, Royalty Pharma has been a loser for investors over the last 12 months. Its shares have fallen more than 20% as the company's royalty income has declined year over year.
However, Wall Street expects a big rebound for Royalty Pharma. The average 12-month price target for the stock reflects an upside potential of nearly 59%. All seven of the analysts recently surveyed by LSEG rate Royalty Pharma as a buy or a strong buy.
Royalty Pharma's management remains optimistic, as well. The company expects to generate a double-digit percentage compound annual growth rate for adjusted cash receipts this decade.
