Boeing (NYSE: BA), Nike (NYSE: NKE), and McDonald’s (NYSE: MCD) have underperformed their Dow Jones Industrial Average peers in 2024 but are set up for index-leading rebounds in 2025. While headwinds remain for these blue-chip behemoths, the tides of business are turning, with market sentiment at a long-term low, suggesting a prolonged multi-year uptrend for each. Their recent struggles also make them potential candidates for the Dogs of the Dow strategy, which focuses on high-dividend, underperforming stocks poised for recovery.
Boeing to See Growth Lift Off Again in 2025
Boeing faces many hurdles in 2024, including operational and economic. However, the forecasts for next year are robust and include a significant improvement in profitability that will likely be sustained in 2026. The longer-term forecasts have earnings rising from the 2024 low through the decade’s end, and revisions have set the bar low. The likely scenario is that Boeing will ramp production successfully and navigate its regulatory challenges, including an FAA investigation into manufacturing practices.
Down 38% year-to-date in early December, analysts consensus forecasts that Boeing stock is set up for a 20% price upswing. The analysts' coverage is telling in that it is increasing as the stock price declines and remains pegged at a consensus of Moderate Buy. The consensus price target is down compared to last year but is holding steady in Q3, implying a 20% upside while the analysts wait on the upcoming earnings report. With low expectations, Boeing is scheduled to report Q4 earnings in late January 2025. The takeaways will be the strike's impact, production timelines, and guidance, which will likely exceed expectations. The forecast for airplane demand is solid, with air travel demand expected to outpace GDP growth and air cargo demand even faster.
Coincidentally, institutional activity is also bullish in this market. Institutional activity is mixed in 2024, with one of four quarters net bearish, but the remainder favors investors. Activity in Q4 ramped higher as the market hit a new low, which helped put a floor in the action. The market is rebounding from the $140 level, which is now the critical support target.
Nike Has a Solid Base of Support
Nike stock is trading near a multi-year low following years of end-market normalization, supply chain issues, a CEO transition, and economic headwinds that have since begun to ease. The stock is still highly valued at these levels, about 28x current-year earnings, but the multiple fails to factor in the rebound forecasted for F2026. MarketBeat’s reported analysts' consensus is that business results will improve as fiscal 2025 progresses and revert to growth in F2026 as new product launches take hold.
The forecasts for Nike are likely low due to the revision trends and expectation for economic tailwinds to develop for retailers as calendar 2025 progresses. Nike is among the Most Downgraded Stocks tracked by MarketBeat. Even so, 30 analysts show a high conviction in the Moderate Buy rating and $95.70 price target. Even assuming a move to the low-end range, the analysts’ forecasts suggest the market for Nike stock is at or near its floor.
McDonald’s to Regain Traction in 2025
McDonald’s struggled with weak comp store growth in 2024 but is expected to overcome it in 2025 as macroeconomic headwinds ease. Analysts forecast growth to approach 5% and a strong margin to sustain the capital return outlook. McDonald’s is expected to sustain its healthy dividend and buy back shares in 2025. Buybacks will reduce the count by about 2% in 2024 and 2025, providing an updraft for the price action.
Analyst sentiment also provides an updraft for the price action. The analysts' sentiment trend shifted to positive from negative mid-year 2024, providing price support. In early November, the consensus price target of $320 implied a 10% upside, with the freshest targets ranging to $360. A move to the consensus is sufficient to set a new all-time high and bring some technical targets into play, including the potential for a move to $390 by the end of next year.
