3 Underperforming Stocks Gearing for a Second Half Comeback

Core Viewpoint - The broader market is experiencing a strong first half of 2024, but questions remain about the second half as stock valuations have increased significantly. Despite this, positive quarterly reports, optimism around generative AI, and expectations for lower interest rates support the recent stock appreciation [1]. Group 1: Lululemon (LULU) - Lululemon has faced a challenging start to the year, losing 39% of its value year-to-date, marking one of its worst sell-offs since late 2021 [3]. - Following a better-than-expected first-quarter report, Lululemon's stock surged 10% in after-hours trading, despite a toned-down guidance for Q2 [3][4]. - A notable highlight was a 78% sales growth from mainland China, indicating potential for future growth in the international segment [3]. Group 2: Snowflake (SNOW) - Snowflake's stock has not reflected the overall AI stock surge, experiencing a 43% decline from its 52-week highs [6][7]. - The company is focusing on AI with new tools to assist developers in creating next-generation AI applications, which could enhance its stock performance [6]. - Analysts have adjusted their financial models upward based on recent events, suggesting that Snowflake may be undervalued in the AI sector [6]. Group 3: Disney (DIS) - Disney's stock is up nearly 12% year-to-date, but recent challenges, including the loss of investor Nelson Peltz, have raised concerns [8]. - The stock trades at a modest forward price-to-earnings ratio of 18.8, indicating potential for recovery as the company invests $17 billion in its Florida parks [8]. - The travel and leisure industry is rebounding, which is expected to significantly benefit Disney's parks business, while the streaming platform Disney+ is on track for profitable growth [8][9].