In this issue of the peel:

• 🧠 Big brains at big banks are starting to drop their S&P 500 price targets for 2025. Find out what they expect and why it barely matters below.

• 🏬 Quantum Computing stocks erupted on barely noticeable news from Amazon as Robinhood got a big upgrade. Meanwhile, Nvidia’s market cap fell back under Apple’s, and Macy’s can’t be a chill guy when employees are doing this sh*t.

• 🇮🇳 The formerly 4th wealthiest person in the world is the latest addition to Santa’s Naughty List. Check out the “largest con in corporate history” below.

Market Snapshot

Banana Bits

• Markets have a hot new crush on Treasury Secretary nominee Scott Bessent.

• Cargill held on to its #1 spot as the U.S.’s largest private company, while SpaceX had the greatest return in 2024, according to Forbes.

• Zoom traded higher into earnings and beat expectations but sold off after-hours as investors aren’t impressed by their growth.

• Staying clean was still cool last quarter as Bath & Body Works shares rose more than 16% on earnings.

• Wynn Resorts just got a big win as the UAE kinda-sorta closes the door on other casino operators “flooding in” to the country.

• Recent graduates are in shambles as MIT, the UT System, and other colleges go tuition-free for students whose parents meet certain income requirements.

• The Macy’s Thanksgiving Day parade is (somehow) still going so strong that NBC might pay $60mn a year for it, triple their current fee.

This Smart Home Company Hit $10 Million in Revenue—and It’s Just the Beginning

No, it’s not Ring or Nest—it’s RYSE, the company redefining smart home innovation, and you can invest for just $1.75 per share.

RYSE’s patented SmartShades are transforming how people control their window shades—offering seamless automation without costly replacements. With 10 fully granted patents and a pivotal Amazon court judgment safeguarding their technology, RYSE has established itself as a market leader in an industry projected to grow 23% annually.

This year, RYSE surpassed $10 million in total revenue, expanded to 127 Best Buy locations, and experienced explosive 200% month-over-month growth. With partnerships in progress with major retailers like Lowe’s and Home Depot, they’re set for even bigger milestones, including international expansion and new product launches.

This is your last chance to invest at the current share price before their next stage of growth drives even greater demand.

Final Call: Invest in RYSE Before the Round Ends!

Macro Monkey Says

Not That It Matters, But…

A catcher in baseball, a World War II veteran who was at the D-Day landing, and a modern-day philosopher, Yogi Berra had a lot to say.

Amid all of his legendary quotes, one of the most iconic—on a subject we all know far too well—was when he said: “It’s hard to make predictions, especially about the future.”

Whether you rely on astrology, monkeys throwing darts, Wall Street strategists, or any other equally qualified method, the two things we know about predictions are 1) they’re usually wrong and 2) they’re never in short supply.

And lately, we’ve gotten a bunch of them on stock prices in 2025. So, let’s get into it.

What Happened?

S&P 500 price targets are a lot like celebrity award speeches—they get a lot of attention while offering little to no value (emphasis on the “no” part).

However, there are some common elements driving Wall Street’s 2025 year-end price targets for our beloved S&P 500. Plus, there wasn’t a lot of macro news today, so why not, right?

According to 6 large banks that have issued targets along with a take from a top research firm, we can expect anywhere from a 7% to a 17% return for everyone’s favorite index next year.

For context, the market averaged an annual return of 7.86% from 1928 to 2023, judging by the S&P 500 and excluding dividends. Including dividends to calculate total return, the long-term average is 10.36%.

Of those 96-years, only 8 have posted what we would consider an “average” return, falling somewhere between 7 and 11%. That means that only ~8.33% of the time does the S&P give investors an “average” year.

That might not make sense intuitively, but it’s the extreme volatility on both sides of the return equation that creates that average. For example, the S&P has had more +30% and -17% annual returns than it has had “average” years.

Might frame that on the wall and tell people it’s a Jackson Pollock original.

Anyway, the point is that big banks will almost always project an annual return, which is what we’d consider “average,” despite less than 10% of years actually posting an average performance.

Career risk is a big reason why, as making a high-conviction call one way or another is a surefire way to find a pink slip on your desk two weeks into January if your take isn’t working out.

Firms will then overpay a team of analysts to write a 60+ page research report justifying their average thesis. Whatever their reasoning, market prices are determined by two things: Earnings and Valuation.

Right now, the S&P 500 trades at a trailing P/E of ~27x. The median multiple on earnings since 1928 is ~16.1x, while the median of the last five years is closer to 20.1x.

With a standard deviation of ~2, this puts the current multiple in a position extremely elevated compared to historical trends. So, if Wall Street firms were banking (no pun intended) on multiple expansions, we’d be damn surprised.

Thankfully, most of the growth expected appears to be driven by earnings. 

On the lower end of forecasts that I was able to access, Goldman Sachs expects an aggregated EPS for S&P 500 companies in 2025 of $268. That implies ~10.3% earnings growth from 2024’s expected EPS of $243.

Basically, Goldman is saying that the entirety of 2025’s return will be driven by earnings. And that’s largely the overarching theme of each firm’s report.

The idea is that EPS growth will be driven by:

• Healthy GDP growth translating into a 2-3% aggregate rise in revenue,

• Lower borrowing costs via continued Fed cuts,

• Regulatory and tax reductions expected from the coming administration,

• Cost cuts led by the implementation of AI systems, and

• Outsized tech sector growth surrounding AI-related applications.

Many of those factors—like rate cuts, regulatory cuts, or margin expansion—tend to also bring multiple expansions, which could imply expectations for even further growth, but apparently, Yardeni was the only firm to have the stones to say it out loud.

The Takeaway?

This is purely hypothetical, as we’re still suffering through 2024, but it’s important to understand what underlies return expectations.

Historical averages and career risk plague professional prognosticators, but besides these two, knowing why a certain outcome is expected is crucial for investors.

Knowing the “why” driving your thesis tells you when to sell or otherwise change your outlook.

So, expect the expected in 2025. But if these price targets turn out wrong, expecting the firms behind them to admit it is like expecting Hasbulla to be the next star of the NBA.

Career Corner

Question

I have a question about networking and applying for positions on the website.

Should I apply to a firm first and then connect with employees to set up calls, or should I reach out to employees at the firm, connect with them, and schedule a call before applying for a position? What would be the best strategy? Could a mentor assist me with this?

Answer

It depends on specific roles and timelines. Ideally, it is great to network before applying, but if the application is open, you need to submit it.

You don’t want to be left out of the process just because you were too late! Most of these applications are rolling, so if you wait too long to apply, you could miss it entirely.

Head Mentor, WSO Academy

Check out WSO Academy

What's Ripe

Quantum Computing Stocks (QMCO, RGTI, ARQQ) 138.44%, 58.05%, 37.23%

• If AI and cr*pto have gotten too mainstream for you, but you still want to be seen as an edgy tech/growth investor, let me introduce you to my friend, quantum computing.

• Another technology that proves Ted Kaczynski may have been onto something is quantum stocks, which boomed on Monday thanks to news that Amazon is getting involved in the industry.

• Amazon announced its “Quantum Embark Program,” an initiative to help guide businesses through quantum-related decisions using Amazon’s Bracket quantum computing service.

• One of their offerings is “Use Case Discovery,” so we know this space isn’t booming just yet. However, the stamp of approval from Amazon got quantum investors hyped.

Robinhood (HOOD) 3.27%

• To have your Chief Legal Officer considered for SEC Chair and then not get the position is a damn good sign he’s a damn good executive. But that’s not why shares were up on Monday.

• Robinhood shares surged as Morgan Stanley upgraded the brokerage firm to an “Overweight” rating and jacked their price target to $55, implying a 55% upside from Friday’s close.

• The move comes as digital asset-related stocks have been surging as BTC approaches $100k and on the back of Robinhood’s entry into the investment management space.

What's Rotten

Nvidia (NVDA) 4.18%

• Small businesses like Nvidia have a tough time competing with larger players. And it’s only gonna get harder now that this little-known chipmaker is only the 2nd biggest company on the planet.

• Shares sold off without much company or industry news, suggesting investors are taking profit after a ~185% YTD return. 

Macy’s (M) 2.21%

• Flipping off your boss is cool and all, but you know what’s an even cooler way to quit? Committing fraud to cover up $154mn worth of delivery expenses.

• That’s exactly what happened to this brick-and-mortar version of Amazon, causing the firm to delay the release of its full results for Q3.

• We did, however, learn that the whole “collapse of traditional retail” thing is still going strong, as sales fell 2.4% from last year. This year’s Thanksgiving parade will be interesting…

Thought Banana

“Oh, The Humanity!”

It’s a tough time of the year to get added to Santa’s naughty list. Unfortunately for Gautam Adani and others, they’ll spend the next month trying to get back in St. Nick’s good graces.

Let’s dive in.

What Happened?

A few weeks ago, Gautam Adani was the 7th wealthiest person in the world. 2-years ago, he was 4th. 

But, the Indian billionaire who founded and still runs the Adani Group—one of India’s largest conglomerates, spanning from airports to mining to media—has lost ~$78bn in recent months, bringing him to the lowly slot as the world’s 21st wealthiest person.

We’ll link to his GoFundMe below, but before you donate, it might help to understand why this guy’s wealth and reputation are hitting the toilet faster than you after your morning coffee and Zyns.

On January 24th, 2023, Hindenburg Research, a widely-followed short seller and stock serial killer, alleged that our boy Gautam was running the “largest con in corporate history.”

Allegations included money laundering, market manipulation, theft of taxpayer funds, bribery, and every kind of fraud you can imagine.

Shares in the 7 publicly traded arms of the Adani Group saw their prices get hammered—and not in a fun way. But things got much worse for the big dawg Gautam last week.

On November 20th, federal prosecutors in New York charged Adani and 7 other Adani Group executives—including his nephew—with bribery, securities fraud, and obstruction of justice.

The bribery charges center on allegations that Adani Group officials promised over $250mn to Indian government officials in return for awarding lucrative state-sponsored contracts to the firm.

That’s not great, but here’s where they really f*cked up.

Back in 2021, the company raised ~$750mn from bond issuance, of which ~$175mn came from U.S. investors. According to the indictment, the funds were raised based on false and/or misleading statements.

If there’s one crime you really don’t want to commit in the U.S., that’s it. 

The Takeaway?

Kill whoever you want, just don’t lie to the SEC. That could be the U.S.’s national motto.

The charges, although still extremely fresh and just begging for a multi-year court battle, have led to political controversy in India as opposition parties allege the Modi government was a willing participant in this tomfoolery.

Where this goes next is anyone’s guess. But I’d bet my life savings it will at least be interesting.

The Big Question: Are the allegations true? What could this mean for U.S.-India relations? Are there more shenanigans going on we haven’t discovered yet?

Banana Brain Teaser

Previous

A collection of 16 coins, each with a face value of either 10 cents or 25 cents, has a total face value of $2.35. How many of the coins have a face value of 25 cents?

Answer: 5

Today

In a set of 24 cards, each card is numbered with a different positive integer from 1 to 24. One card will be drawn at random from the set. What is the probability that the card drawn will have either a number that is divisible by both 2 and 3 or a number that is divisible by 7?

Send your guesses to [email protected]

How Would You Rate Today's Peel?

Happy Investing,
David, Vyom, Ankit & Patrick

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