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The Zacks Analyst Blog Highlights CrowdStrike, PagerDuty, PLDT, Atmos Energy and Granite Construction
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For Immediate Release
Chicago, IL – January 2, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: CrowdStrike (CRWD - Free Report) , PagerDuty (PD - Free Report) , PLDT (PHI - Free Report) , Atmos Energy (ATO - Free Report) and Granite Construction (GVA - Free Report) .
Here are highlights from Friday’s Analyst Blog:
5 Top Stocks to Gain from Lower Interest Rates in 2024
The Federal Reserve's dovish shift and historic decision to end its monetary tightening policy certainly has been advantageous for tech, utility and real estate players.
This calls for investing in stocks such as CrowdStrike, PagerDuty, PLDT, Atmos Energy and Granite Construction that stand to benefit from a lower-interest-rate environment, heading into the new year.
Inflation is Slowing
The Fed's favored measure of price pressure, the personal consumption expenditures (PCE) price index, dipped in November for the first time since 2020. Last month, the PCE index fell 0.1% and remained unchanged in October.
The PCE index increased 2.6% year over year in November. However, that's less than the annual rate of 2.9% in the prior month and registered the lowest level since February 2021.
Above all, the core PCE rate, which eliminates the volatile food and energy prices, decelerated to 3.2% over the past 12-month period in November from October's annual rate of 3.4%. This also marked the smallest rise since the beginning of 2021.
Retail inflation, meanwhile, has started to show signs of cooling down, while wholesale price pressures are also easing. The consumer price index (CPI) was up 3.1% in November from a year ago, signifying a drop after a 3.2% increase in October. By the way, the producer price index (PPI) increased only 0.9% year over year in November, way less than the rise above 11.5% in March 2022.
Fed's Dovish Stance
Thanks to waning inflation, the Fed has not only kept interest rates unchanged in its latest policy meeting but also hinted at rate cuts in 2024.
The benchmark fed funds rate remained steady between 5.25% to 5.5%. However, the central bank expects the rate to decline to 4.6% by the end of next year against 5.1% projected three months earlier. This means that there will be a 75 basis points of interest rate cut in 2024.
The "dot plot" of the Federal Open Market Committee showed that further interest rate cuts in 2025 are possible as the price rise of indispensable commodities has slowed down amid a resilient economy, a strong labor market and confident consumers.
Stocks That Gain as Rate Hike Fears Wane
Tech stocks gain from a low-interest rate environment. When interest rates increase, tech companies' future cash inflows are affected. This leads to an increase in the cost of borrowing, which impacts profit margins. Thus, interest rate cuts surely bode well for tech players.
Capital-intensive utility companies have higher levels of debt. Their debt level decreases in a low-interest rate environment, helping them pay off dues and book profits. Similarly, low interest rates work wonders for companies involved in the construction business since they reduce the borrowing costs of projects.
Top 5 Gainers
Thus, we have selected five stocks poised to make the most of the Fed's aim to slash interest rates. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). Such stocks also have a VGM Score of A or B. Here, V stands for Value, G for Growth and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today's Zacks #1 Rank stocks here.
CrowdStrike is a leader in next-generation endpoint protection, threat intelligence, and cyberattack response services. CRWD currently has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 4.3% over the past 60 days. The company's expected earnings growth for next year is 23.8%.
PagerDuty provides digital operations management solutions. PD currently has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 16.1% over the past 60 days. The company's expected earnings growth for next year is 9.7%.
PLDT offers telecommunications services. PHI currently has a Zacks Rank #1 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 5.8% over the past 60 days. The company's expected earnings growth for next year is 5.5%.
Atmos Energy is engaged in regulated natural gas distribution and storage business. ATO currently has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 1.2% over the past 60 days. The company's expected earnings growth for next year is 6.4%.
Granite Construction is the nation's largest infrastructure contractor and producer of construction materials. GVA currently has a Zacks Rank #1 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 9.9% over the past 60 days. The company's expected earnings growth for next year is 37.5%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights CrowdStrike, PagerDuty, PLDT, Atmos Energy and Granite Construction
For Immediate Release
Chicago, IL – January 2, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: CrowdStrike (CRWD - Free Report) , PagerDuty (PD - Free Report) , PLDT (PHI - Free Report) , Atmos Energy (ATO - Free Report) and Granite Construction (GVA - Free Report) .
Here are highlights from Friday’s Analyst Blog:
5 Top Stocks to Gain from Lower Interest Rates in 2024
The Federal Reserve's dovish shift and historic decision to end its monetary tightening policy certainly has been advantageous for tech, utility and real estate players.
This calls for investing in stocks such as CrowdStrike, PagerDuty, PLDT, Atmos Energy and Granite Construction that stand to benefit from a lower-interest-rate environment, heading into the new year.
Inflation is Slowing
The Fed's favored measure of price pressure, the personal consumption expenditures (PCE) price index, dipped in November for the first time since 2020. Last month, the PCE index fell 0.1% and remained unchanged in October.
The PCE index increased 2.6% year over year in November. However, that's less than the annual rate of 2.9% in the prior month and registered the lowest level since February 2021.
Above all, the core PCE rate, which eliminates the volatile food and energy prices, decelerated to 3.2% over the past 12-month period in November from October's annual rate of 3.4%. This also marked the smallest rise since the beginning of 2021.
Retail inflation, meanwhile, has started to show signs of cooling down, while wholesale price pressures are also easing. The consumer price index (CPI) was up 3.1% in November from a year ago, signifying a drop after a 3.2% increase in October. By the way, the producer price index (PPI) increased only 0.9% year over year in November, way less than the rise above 11.5% in March 2022.
Fed's Dovish Stance
Thanks to waning inflation, the Fed has not only kept interest rates unchanged in its latest policy meeting but also hinted at rate cuts in 2024.
The benchmark fed funds rate remained steady between 5.25% to 5.5%. However, the central bank expects the rate to decline to 4.6% by the end of next year against 5.1% projected three months earlier. This means that there will be a 75 basis points of interest rate cut in 2024.
The "dot plot" of the Federal Open Market Committee showed that further interest rate cuts in 2025 are possible as the price rise of indispensable commodities has slowed down amid a resilient economy, a strong labor market and confident consumers.
Stocks That Gain as Rate Hike Fears Wane
Tech stocks gain from a low-interest rate environment. When interest rates increase, tech companies' future cash inflows are affected. This leads to an increase in the cost of borrowing, which impacts profit margins. Thus, interest rate cuts surely bode well for tech players.
Capital-intensive utility companies have higher levels of debt. Their debt level decreases in a low-interest rate environment, helping them pay off dues and book profits. Similarly, low interest rates work wonders for companies involved in the construction business since they reduce the borrowing costs of projects.
Top 5 Gainers
Thus, we have selected five stocks poised to make the most of the Fed's aim to slash interest rates. These stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). Such stocks also have a VGM Score of A or B. Here, V stands for Value, G for Growth and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today's Zacks #1 Rank stocks here.
CrowdStrike is a leader in next-generation endpoint protection, threat intelligence, and cyberattack response services. CRWD currently has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 4.3% over the past 60 days. The company's expected earnings growth for next year is 23.8%.
PagerDuty provides digital operations management solutions. PD currently has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 16.1% over the past 60 days. The company's expected earnings growth for next year is 9.7%.
PLDT offers telecommunications services. PHI currently has a Zacks Rank #1 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 5.8% over the past 60 days. The company's expected earnings growth for next year is 5.5%.
Atmos Energy is engaged in regulated natural gas distribution and storage business. ATO currently has a Zacks Rank #2 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 1.2% over the past 60 days. The company's expected earnings growth for next year is 6.4%.
Granite Construction is the nation's largest infrastructure contractor and producer of construction materials. GVA currently has a Zacks Rank #1 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has increased 9.9% over the past 60 days. The company's expected earnings growth for next year is 37.5%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.