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These 3 Dow Stocks Are Set to Soar in 2022's Second Half and Beyond

They may be the bluest of the blue chips, but that's still not been good enough of late. The Dow Jones Industrial Average (DJINDICES: ^DJI) currently sits 11% below its January high despite the 9% rebound from June's low. Of course, being an average means roughly half of the Dow's 30 stocks are faring even worse this year.

Not every one of these laggards is destined to continue lagging, though. In fact, a trio of these tickers has been so unfairly sold off that they're primed for major recoveries during the remainder of the year -- and likely a lot longer. Here's a closer look at each of them.

Boeing

Admittedly, Boeing's (NYSE: BA) been an easy name to doubt recently. In addition to the fallout from the 737 MAX's design flaws (and two fatal crashes), pandemic-prompted travel bans further crimped demand for its aircraft.

That's why shares are still down by half since the end of 2019, with a big piece of that setback rematerializing in just the past 12 months. A rekindled coronavirus contagion and renewed regulatory worries pulled the rug out from underneath the rebound effort in the latter half of 2020.

There's finally a light at the end of the tunnel though, so to speak. Just last week the U.S. Federal Aviation Administration cleared Boeing to restart domestic deliveries of the 787 Dreamliner. Morgan Stanley estimates the aircraft maker has $17 billion worth of 787 jets built and ready to deliver immediately.

In the meantime, the company's been securing more and more orders for the plane in question, as well as others. Delta ordered 100 737 MAX jets last month, for instance, marking the biggest single order from the airline in over a decade. The order brings the company's total backlog to 4,239 aircraft, and ramps up Boeing's unfilled orders to 5,106 airplanes. That's plenty of business, and revenue.

Travel is also resuming even though COVID-19 is still with us. Carnival Cruise Lines recently eased its vaccine requirements, and an outlook from Tourism Economics suggests spending on worldwide leisure travel this year will be up 8% versus 2021's levels, and should eclipse 2019's pre-COVID tally of $867 billion with a figure of $880 billion next year, en route to $970 billion by 2026. This sort of growth allows airlines to confidently purchase new aircraft.

The market has been recognizing this recovery, but only intermittently. So don't be surprised to see continued volatility in Boeing shares. If you're patient though, the potential payoff is worth the wait.

Walt Disney

It's been a challenging time for The Walt Disney Company (NYSE: DIS). Too many of its recent movies haven't been the blockbusters the studio was hoping they'd be, price hikes at its parks (and now for ESPN+) aren't exactly being embraced by consumers, and its streaming subscriber growth is slowing even before that business achieves profitability. There are also some reports that former CEO Bob Iger may regret picking current chief Bob Chapek to assume the role, undermining confidence in Chapek's leadership.

Given all of this, it's not surprising that Disney's stock is essentially half its value from early last year. As the old adage goes, though, it's always darkest before dawn. Walt Disney may be at its worst right now, with the stock fully reflecting its current condition. But there's nowhere to go but up from here.

It's admittedly tough to identify the potential catalysts that could drive such a recovery, but they're out there if you look for them. Take the ad-supported version of Disney+ slated for launch later this year, for instance. While a lower-cost tier will obviously draw a crowd unwilling or unable to pay the full price for a premium, ad-free service, investors may be underestimating the appeal of such an option.

Hub Research says nearly 60% of consumers would tolerate advertisements if they lower the monthly price of that service between $4 and $5 -- which is right in line with the Disney+ intended pricing plans. The new pricing tier could spark an unexpected explosion for the company's streaming business. A huge slate of new Star Wars and Marvel streaming content should only fuel this growth.

There's still work to be done here. In many ways though, the mess that Disney's created for itself is finally forcing the company into rethinking how it wants to operate in the foreseeable future. Look for the stock to respond accordingly.

Merck

Finally, add drugmaker Merck (NYSE: MRK) to your list of Dow stocks that could finish 2022 on a high note that ends up lasting for years.

If it seems like Merck was conspicuously left out of the race to develop a COVID-19 vaccine, you're not imagining things. It halted its early efforts on this front due to a lack of efficacy, while its treatment for infected individuals -- Molnupiravir -- hasn't exactly been a game-changer.

The thing is, the company never really prioritized what would always only be a limited-time, risky, and highly competitive opportunity in COVID-19, which is arguably why Merck's stock was such a sub-par performer in the midst of the pandemic, when several other pharmaceutical stocks were rallying.

Merck instead kept the bulk of its focus on research and development with long-term potential.

That's mostly its cancer-fighting Keytruda, by the way. While the company recently reported that combining Keytrude with other treatments wasn't as effective as hoped for certain carcinomas or prostate cancers, the drug is still crushing it as a means of treating lung cancers, lymphoma, triple-negative breast cancers, as well as certain types of kidney, liver, and bladder cancers, just to name a few.

Keytruda's such a powerhouse, in fact, that it accounted for more than one-third of last quarter's revenue, leading a 28% uptick of the company's top line. There's still lots of growth opportunity ahead for Merck's flagship franchise, however, as Keytruda is currently being tested in eight different phase-two trials -- and more trials of the oncology drug can still be added in the future.

Beyond Keytruda, the company anticipates doing more than $10 billion worth of yearly cardiovascular business by the mid-2030s, with sales of HPV treatment Gardasil jumping 36% last quarter as more doctors realize its effectiveness.

In the midst of COVID-19's mania, investors largely forgot what a powerhouse Merck is. Now that the dust is settling, though, the market's remembering, with the stock reaching higher highs as a result.

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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck & Co. and Walt Disney. The Motley Fool recommends Carnival and Delta Air Lines and recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.


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