2026 Comeback Picks: 3 S&P Laggards Poised to Break Out

Mean reversion and several macro/sector signals — stretched AI multiples, undervalued cyclicals, election-driven ad spending and potential rate cuts — could make 2026 a rebound year for some of 2025’s biggest losers. Fiserv (down ~67%) trades near 2017 levels despite stable fundamentals, sticky banking software revenue and strong free cash flow; it sits at a ~6.4x forward P/E with analysts forecasting 16.9% EPS growth and a $121.08 consensus target (≈82% upside), with recovery tied to easier rates boosting transaction volumes. The Trade Desk (down ~66%) posted +18% revenue YoY and is seeing Kokai AI and connected-TV traction, supporting an expected ~35% EPS rise and a $76.88 target (≈95% upside). Deckers (down ~50%) benefits from HOKA-driven revenue and margin strength, with >12% projected EPS growth and a $117.58 target (~16% upside), making all three asymmetric, rotation-driven opportunities if the macro tailwinds materialize.

Analysis

The article argues a mean-reversion opportunity heading into 2026 driven by stretched AI multiples, undervalued cyclicals, election-driven ad spending and the prospect of rate cuts; it notes that stocks in the bottom quartile of 2025 historically can outperform the following year. Fiserv (FISV) is highlighted after a ~67% decline in 2025 and trading near 2017 levels despite flat-to-slightly-lower revenue and earnings; the stock trades at a ~6.4x forward P/E, analysts forecast 16.9% EPS growth over 12 months and a $121.08 consensus target (~82% upside), with recovery tied to easier monetary policy boosting transaction volumes and payment activity. The Trade Desk (TTD) has fallen ~66% in 2025 and >70% over 12 months even as revenue rose 18% YoY; Kokai AI adoption and connected-TV strength support a 35% EPS growth forecast and a $76.88 target (~95% upside). Deckers (DECK) is down ~50% but shows YOY revenue and EPS growth driven by HOKA, strong margins and a $117.58 target (~16% above the Dec. 9 close); all three names depend on macro rotation and ad/consumer cyclicals recovering to realize upside.

Key Decisions for Investors

• Initiate modest, staged exposure to FISV given the ~6.4x forward P/E and an 82% consensus upside, but tie conviction to clear Fed easing signals and improving payment volumes,
• Accumulate TTD on confirmed ad-budget recovery or continued Kokai/CTV revenue strength since revenue is +18% YoY and analysts model ~35% EPS growth,
• Add DECK selectively as a lower-volatility cyclical recovery play supported by HOKA-driven revenue and >12% projected EPS growth, acknowledging more limited ~16% upside,
• Monitor macro and thematic triggers—official rate-cut guidance, election ad-spend announcements, and payment/transaction trends—and trim or hedge positions if rotation back to AI/growth resumes or fundamentals weaken