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The Zacks Analyst Blog Highlights American Express, The Travelers Companies, Parker- Hannifin, General Motors and Colgate-Palmolive
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For Immediate Release
Chicago, IL – March 12, 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: American Express Co. (AXP - Free Report) , The Travelers Companies Inc. (TRV - Free Report) , Parker-Hannifin Corp. (PH - Free Report) , General Motors Co.'s (GM - Free Report) and Colgate-Palmolive Co. (CL - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Forget A.I.: Invest in These 5 "Old Economy" Stocks
U.S. stock markets have maintained their northward journey in 2024 after an astonishing rally in 2023. The bull run has gained further thrust as major stock indexes have posted multiple all-time highs on both intraday and closing basis so far this year. Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have advanced 2.7%, 8% and 8.9%.
However, the major driver of last year's and this year's rally was globally booming artificial intelligence (AI), especially generative AI. Companies that have extensive application of AI in their final products have become multi-baggers in the past 15 months. Stock prices of some of these companies have skyrocketed 200-300% during this period.
These highly overvalued stocks make a large section of financial researchers and analysts skeptical of investing, although the near-term business outlook of these entities remains solid. The current overstretched valuation of these stocks makes them less attractive in the investing arena.
Meanwhile, several old economy stocks from sectors such as industrials, finance, auto, materials and consumer defensive have popped year to date. Investing in these untapped stocks with a favorable Zacks Rank should lead to profits.
Our Top Picks
We have narrowed our search to five old economy stocks that have provided double-digit returns year to date and have more upside left. These stocks have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
American Express Co. has benefited from growth initiatives, such as launching new products, reaching new agreements and forging alliances. Consumer spending on T&E, which carries higher margins for AXP, is advancing well. AXP's balance sheet looks strong with ample cash. Solid cash-generation abilities enable the pursuit of business investments and prudent deployment of capital via buybacks and dividends.
American Express has an expected revenue and earnings growth rate of 9.4% and 14.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days. The stock price of AXP has jumped 19.3% year to date.
The Travelers Companies Inc. boasts a strong market presence in auto, homeowners' insurance and commercial U.S. property-casualty insurance with solid inorganic growth. A high retention rate, a rise in new business and positive renewal premium change bode well.
TRV's commercial businesses should perform well owing to market stability. TRV remains optimistic about the personal line of business, given growth at profitable agencies like auto and homeowners businesses. Strong and reliable returns from the growing fixed-income portfolio should drive net investment income. Sufficient capital boosts shareholder value. TRV aims for a mid-teens core return on equity over time.
The Travelers Companies has an expected revenue and earnings growth rate of 11.8% and 34.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 30 days. The stock price of TRV has rallied 14.7% year to date.
Parker-Hannifin Corp. is benefiting from higher demand from distributors and end users across the oil and gas, material handling, cars and light trucks, and farm and agriculture markets in the North American region within the Diversified Industrial segment.
Higher volume across all businesses, especially the commercial and military aftermarket businesses bolstered PH's Aerospace Systems unit. Synergies from the Meggitt buyout are also aiding PH. Benefits from the Win strategy are driving PH's margins.
Parker-Hannifin has an expected revenue and earnings growth rate of 4.5% and 11.7%, respectively, for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last seven days. The stock price of TRV has climbed 16.7% year to date.
General Motors Co.'s compelling electric vehicle (EV) and internal combustion engine portfolio, displaying strong demand for its quality pickups and SUVs, bodes well. GM retained the U.S. auto sales crown in 2023. Its massive EV push is commendable.
GM plans to roll out 30 fresh EV models by 2025-end. General Motors' Ultium Drive system and battery plants in Ohio, Tennessee and Lansing are likely to scale up its e-mobility prowess. GM is on track to deliver on its $2 billion net cost reduction program by 2024 end. Its superior liquidity profile and investor-friendly moves bode well.
General Motors has an expected revenue and earnings growth rate of 1.8% and 17.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the last 30 days. The stock price of GM has advanced 10% year to date.
Colgate-Palmolive Co. has been gaining from strong pricing, and the benefits of funding growth and other productivity efforts. This, along with solid business momentum, led to a robust performance during fourth-quarter 2023.
In addition, accelerated revenue growth management plans aided CL's organic sales in the fourth quarter. In fact, 2023 marked the fifth straight year of organic sales growth either in line or ahead of the 3-5% long-term goal. As a result, CL anticipates net sales growth of 1-4% for 2024.
Colgate-Palmolive has an expected revenue and earnings growth rate of 3.7% and 7.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 30 days. The stock price of CL has appreciated 10.5% year to date.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% 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 American Express, The Travelers Companies, Parker- Hannifin, General Motors and Colgate-Palmolive
For Immediate Release
Chicago, IL – March 12, 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: American Express Co. (AXP - Free Report) , The Travelers Companies Inc. (TRV - Free Report) , Parker-Hannifin Corp. (PH - Free Report) , General Motors Co.'s (GM - Free Report) and Colgate-Palmolive Co. (CL - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Forget A.I.: Invest in These 5 "Old Economy" Stocks
U.S. stock markets have maintained their northward journey in 2024 after an astonishing rally in 2023. The bull run has gained further thrust as major stock indexes have posted multiple all-time highs on both intraday and closing basis so far this year. Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have advanced 2.7%, 8% and 8.9%.
However, the major driver of last year's and this year's rally was globally booming artificial intelligence (AI), especially generative AI. Companies that have extensive application of AI in their final products have become multi-baggers in the past 15 months. Stock prices of some of these companies have skyrocketed 200-300% during this period.
These highly overvalued stocks make a large section of financial researchers and analysts skeptical of investing, although the near-term business outlook of these entities remains solid. The current overstretched valuation of these stocks makes them less attractive in the investing arena.
Meanwhile, several old economy stocks from sectors such as industrials, finance, auto, materials and consumer defensive have popped year to date. Investing in these untapped stocks with a favorable Zacks Rank should lead to profits.
Our Top Picks
We have narrowed our search to five old economy stocks that have provided double-digit returns year to date and have more upside left. These stocks have seen positive earnings estimate revisions in the last 30 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
American Express Co. has benefited from growth initiatives, such as launching new products, reaching new agreements and forging alliances. Consumer spending on T&E, which carries higher margins for AXP, is advancing well. AXP's balance sheet looks strong with ample cash. Solid cash-generation abilities enable the pursuit of business investments and prudent deployment of capital via buybacks and dividends.
American Express has an expected revenue and earnings growth rate of 9.4% and 14.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days. The stock price of AXP has jumped 19.3% year to date.
The Travelers Companies Inc. boasts a strong market presence in auto, homeowners' insurance and commercial U.S. property-casualty insurance with solid inorganic growth. A high retention rate, a rise in new business and positive renewal premium change bode well.
TRV's commercial businesses should perform well owing to market stability. TRV remains optimistic about the personal line of business, given growth at profitable agencies like auto and homeowners businesses. Strong and reliable returns from the growing fixed-income portfolio should drive net investment income. Sufficient capital boosts shareholder value. TRV aims for a mid-teens core return on equity over time.
The Travelers Companies has an expected revenue and earnings growth rate of 11.8% and 34.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 30 days. The stock price of TRV has rallied 14.7% year to date.
Parker-Hannifin Corp. is benefiting from higher demand from distributors and end users across the oil and gas, material handling, cars and light trucks, and farm and agriculture markets in the North American region within the Diversified Industrial segment.
Higher volume across all businesses, especially the commercial and military aftermarket businesses bolstered PH's Aerospace Systems unit. Synergies from the Meggitt buyout are also aiding PH. Benefits from the Win strategy are driving PH's margins.
Parker-Hannifin has an expected revenue and earnings growth rate of 4.5% and 11.7%, respectively, for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last seven days. The stock price of TRV has climbed 16.7% year to date.
General Motors Co.'s compelling electric vehicle (EV) and internal combustion engine portfolio, displaying strong demand for its quality pickups and SUVs, bodes well. GM retained the U.S. auto sales crown in 2023. Its massive EV push is commendable.
GM plans to roll out 30 fresh EV models by 2025-end. General Motors' Ultium Drive system and battery plants in Ohio, Tennessee and Lansing are likely to scale up its e-mobility prowess. GM is on track to deliver on its $2 billion net cost reduction program by 2024 end. Its superior liquidity profile and investor-friendly moves bode well.
General Motors has an expected revenue and earnings growth rate of 1.8% and 17.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the last 30 days. The stock price of GM has advanced 10% year to date.
Colgate-Palmolive Co. has been gaining from strong pricing, and the benefits of funding growth and other productivity efforts. This, along with solid business momentum, led to a robust performance during fourth-quarter 2023.
In addition, accelerated revenue growth management plans aided CL's organic sales in the fourth quarter. In fact, 2023 marked the fifth straight year of organic sales growth either in line or ahead of the 3-5% long-term goal. As a result, CL anticipates net sales growth of 1-4% for 2024.
Colgate-Palmolive has an expected revenue and earnings growth rate of 3.7% and 7.7%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 30 days. The stock price of CL has appreciated 10.5% year to date.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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.