The SPDR S&P 500 ETF Trust (NYSE:SPY) is off to a horrible start to 2022, down 11.7% year-to-date. However, a handful of popular stocks have severely lagged the market and generated much heavier losses for investors this year.
The threat of sharply rising interest rates and a slowdown in growth for many of the top-performing pandemic stocks has driven investors to seek shelter and safety in value stocks and defensive investments. At this point, shareholders of the worst-performing S&P 500 stocks of 2022 are asking themselves whether to buy the dip or cut their losses.
Here's a look at what analysts are saying about the six worst-performing stocks of the S&P 500 in 2022.
Sell: Netflix, Inc. (NASDAQ:NFLX)
When it comes to 2022 underperformers, it doesn't get much worse than Netflix. The streaming video leader's stock is down 68% so far this year, making it the worst-performing stock in the S&P 500. Unfortunately for Netflix investors, Bank of America analyst Nat Schindler says things may get worse for Netflix before they get better. Schindler says Netflix's plans to reignite its growth story won't have a noticeable impact until 2024, giving investors little reason to be excited about the stock in the interim.
Bank of America has an Underperform rating and $300 price target for NFLX stock.
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Hold: EPAM Systems Inc (NYSE:EPAM)
EPAM Systems provides digital platform, engineering, and consulting services for customers around the world. The stock is down 58% year-to-date in 2022, but Bank of America analyst Jason Kupferberg says he is staying on the sidelines given the stock's extreme geopolitical uncertainty. Unfortunately, EPAM is one of the most highly exposed S&P 500 stocks to the conflict in Ukraine. In fact, Ukraine, Belarus and Russia represent about 58% of the company's billable staff. With no end in sight to the Ukraine conflict, Kupferberg says investors would be wise to wait until they have a clearer picture of the company's financial picture before buying the dip.
Bank of America has a Neutral rating and $231 price target for EPAM stock.
Hold: PayPal Holdings Inc (NASDAQ:PYPL)
PayPal is a leading digital payments platform. The rotation out of tech growth stocks in 2022 has dragged PayPal shares down 57.3% year-to-date, but Kupferberg says investors should wait for a better entry point before buying the dip. He expects the stock to remain range-bound until the company can prove to investors that its new strategy of emphasizing average revenue per account (ARPA) over net new adds (NNA) is paying off.
Bank of America has a Neutral rating and $118 price target for PYPL stock.
Hold: Etsy Inc (NASDAQ:ETSY)
Etsy is a leading e-commerce platform and a top online destination for unique handcrafted goods or vintage items in the U.S. and some international markets. Etsy and its stock experienced rapid growth during the pandemic, but that growth has died down significantly in recent quarters. CFRA analyst Kenneth Leon says Etsy has opportunities to continue to benefit from the secular growth trends in e-commerce. However, he says the stock remains fully valued even after its sharp 53.5% year-to-date decline.
CFRA has a Neutral rating and $170 price target for ETSY stock.
Hold: Ceridian HCM Holding Inc (NYSE:CDAY)
Ceridian HCM is a Software-as-a-Service (SaaS) provider that specializes in Human Capital Management (HCM) applications. CFRA analyst David Holt says the company's ability to capitalize on an improving labor market and maintain sales momentum has been impressive. In addition, HCM is expanding into international markets and is attempting to move upstream and land even larger clients. Unfortunately, he says lower Dayforce revenue growth and a heavier emphasis on internal professional services business lines have weighed on overall profitability and growth, and dragged the stock down 46.2% year-to-date.
CFRA has a Hold rating and $95 price target for CDAY stock.
Buy: Meta Platforms Inc (NASDAQ:FB)
Meta Platforms is the parent company of popular social media and messaging platforms Facebook, Instagram and Messenger. The stock is down 48.9% in 2022 after it reported changes to Apple, Inc. (NASDAQ:AAPL) iPhone privacy policies will cost Meta $10 billion in revenue in 2022. Meta also said its Meta Reality Labs metaverse business lost $10 billion in 2021. Bank of America analyst Justin Post says the Meta growth thesis has certainly taken a hit in 2022. However, there is a lot of negativity already priced into the stock, which is currently trading at just 12.5 times forward earnings.
Bank of America has a Buy rating and $290 price target for FB stock.
