This year the stock market has been adversely affected by multi-decade high inflation, aggressive rate hikes by the Fed to curb the price rise, and geopolitical turmoil. However, the October CPI report, showing signs of cooling inflation, and indications by the Fed to increase rate hikes at a slower pace, have raised consumer sentiments.
Moreover, the November jobs report came in better than expected, with nonfarm payrolls increasing by 263,000 for the month versus the Dow Jones estimate of 200,000. While the hot job market might induce the Fed to continue its rate hikes, these numbers show the economy’s strength. Additionally, Bank of America CEO Brian Moynihan expects a “mild recession” next year, providing optimism about the state of the economy.
While markets usually rejoice in the “Santa Claus rally” during the holiday season, this year, investors have a lot to worry about due to economic uncertainties.
However, we believe investors should consider adding fundamentally strong stocks Pfizer Inc. (PFE), AstraZeneca PLC (AZN), Carrier Global Corporation (CARR), J.Jill, Inc. (JILL), and Lifeway Foods, Inc. (LWAY) to their portfolios.
Pfizer Inc. (PFE)
PFE discovers, develops, manufactures, distributes, and sells biopharmaceutical products worldwide. It offers medicines and vaccines in various therapeutic areas. The company serves wholesalers, retailers, hospitals, clinics, government agencies, as well as disease control and prevention centers.
On November 3, PFE announced that its investigational cancer immunotherapy, elranatamab, received Breakthrough Therapy Designation from the U.S. Food and Drug Administration (FDA) for treating people with relapsed or refractory multiple myeloma (RRMM).
This marks PFE’s twelfth FDA Breakthrough Therapy Designation in Oncology, a testament to our relentless commitment to developing transformational cancer medicines in areas of high unmet need.
On October 20, PFE and Erasca, Inc. (ERAS) announced a clinical trial collaboration and supply agreement for the CDK4/6 inhibitor palbociclib. This agreement is expected to fund a clinical proof-of-concept study of ERAS-007, an oral ERK1/2 inhibitor, in combination with palbociclib for treating patients with KRAS- and NRAS-mutant colorectal cancer and KRAS-mutant pancreatic ductal adenocarcinoma.
This agreement should bolster its capabilities and be beneficial amid the rising cancer cases worldwide.
On October 5, PFE announced that it had completed the acquisition of Global Blood Therapeutics, Inc. (GBT), a biopharmaceutical company that deals with sickle cell disease (SCD). The acquisition reinforces Pfizer’s commitment to SCD, building on a 30-year legacy in the rare hematology space.
On September 22, PFE declared a quarterly dividend of $0.40 per share on its common stock, which was payable to shareholders on December 5. This reflects the shareholder return ability of the company.
During the fiscal third quarter ended September 2022, PFE’s income from continuing operations improved 5.8% year-over-year to $8.65 billion. Its non-GAAP adjusted net income attributable to Pfizer Inc. common shareholders rose 39.7% year-over-year to $10.17 billion, while its adjusted EPS grew 40.2% year-over-year to $1.78.
Streets expect PFE’s EPS for the current fiscal year ending December 2022 to be $6.47, indicating a 46.4% improvement year-over-year. The company’s revenue is likely to increase 23.3% year-over-year to $100.21 billion in the same year. Additionally, PFE has topped consensus EPS estimates in each of the trailing four quarters, which is impressive.
The stock has gained 11.4% over the past three months to close its last trading session at $50.91. Moreover, it has gained 7.8% over the past month.
PFE’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
PFE is rated an A in Value and a B in Growth, Sentiment, and Quality. Within the Medical – Pharmaceuticals industry, it is ranked #2 out of 162 stocks.
Click here to see additional POWR Ratings for Momentum and Stability for PFE.
AstraZeneca PLC (AZN)
Headquartered in Cambridge, the United Kingdom, AZN focuses on discovering, developing, manufacturing, and commercializing prescription medicines.
On November 29, AZN announced an agreement to acquire Neogene Therapeutics Inc. (Neogene), a global clinical-stage biotechnology company. With a shared goal of bringing cell therapies to patients with solid tumors, Neogene’s expertise in TCR-T discovery, development, and manufacturing will strengthen AZN’s ambition to transform patient outcomes.
On November 16, Alexion, AstraZeneca Rare Disease, announced the completion of its acquisition of LogicBio® Therapeutics, Inc. (LOGC), a pioneering genomic medicine company. The acquisition is expected to create an opportunity to accelerate Alexion’s growth in genomic medicines through unique technology, an experienced rare disease R&D team, and expertise in pre-clinical development.
AZN’s total revenue increased 11.3% year-over-year to $10.98 billion in the fiscal third quarter ended September 30, 2022. Its gross profit improved 31% year-over-year to $8 billion over the period, while its EBITDA increased 131.5% from its year-ago value to $2.58 billion.
AZN’s earnings per share for the quarter ended September 30, 2022, came to $1.06 compared to the loss per share of $1.10 for the quarter ended September 30, 2021.
AZN’s EPS for the fiscal period ending December 2022 is expected to improve 69.5% year-over-year to $4.48. Its consensus revenue estimate of $44.44 billion represents an 18.8% growth year-over-year for the same period.
AZN’s shares have gained 26.3% over the past year to close the last trading session at $68.47. Moreover, the stock has gained 12.8% over the past three months.
The company has an overall rating of B, translating to Buy in our proprietary rating system. AZN is also rated an A for Sentiment and a B for Growth. Within the Medical – Pharmaceuticals industry, it is ranked #17.
Click here for additional POWR Ratings for AZN for Value, Stability, Quality, and Momentum.
Carrier Global Corporation (CARR)
CARR provides heating, ventilating, air conditioning (HVAC), refrigeration, fire, security, and building automation technologies worldwide. It operates through the HVAC, Refrigeration, and Fire & Security segments.
Recently, CARR forged innovative agreements with the United Nations World Food Programme (WFP) and the African Centre of Excellence for Sustainable Cooling and Cold-chain (ACES) to help advance cold chain development and training in Africa.
Tim White, CARR’s President, Refrigeration, said, “Collaborative efforts between the public and private sectors can drive transformational cold chain development and growth.”
On October 23, CARR’s board of directors declared a quarterly dividend of $0.15 per outstanding share of Carrier common stock, which was payable on November 21. This reflects the cash generation ability of the company.
CARR’s total net sales increased 2.1% year-over-year to $5.45 billion for the third quarter ended September 30, 2022. The company’s adjusted EPS came in at $0.70. For the nine months ended September 30, cash and cash equivalents, end of period increased 11.8% year-over-year to $2.99 billion.
Analysts expect CARR’s EPS and revenue for the first quarter ending March 2023 to increase 3.8% and 10.6% year-over-year to $0.56 and $5.15 billion, respectively. It surpassed Street EPS estimates in each of the trailing four quarters.
Shares of CARR have increased 12.9% over the past six months and 10.9% over the past month to close the last trading session at $44.68.
CARR’s strong prospects are reflected in its POWR Ratings. It has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
CARR has a B grade for Value, Sentiment, and Quality. CARR is ranked #6 out of 47 stocks in the B-rated Industrial – Building Materials industry.
Click here to access CARR’s Growth, Momentum, and Stability grades.
J.Jill, Inc. (JILL)
JILL is an omnichannel retailer of women’s clothing, emphasizing the 45+ age segment. The business sells its goods through retail locations, a website, and catalogs. It runs an e-commerce website and 249 outlets across the country.
Claire Spofford, President and CEO of JILL, said, “As we look to the remainder of the year, we plan to continue to execute against our initiatives, including investing in our plans for long-term profitable growth while remaining prudent with our expectations related to the consumer.”
“As part of our growth strategy, we focus on modernizing the J. Jill brand to increase relevance with both new and loyal customers. We recently announced our ‘Welcome Everybody’ campaign focused on delivering an elevated shopping experience online and in stores that celebrate the totality of all women.” she added.
For the fiscal 2023 second quarter ended July 30, 2022, JILL’s net sales increased 0.7% year-over-year to $160.34 million, while its gross profit grew 2.9% from the year-ago value to $112.47 million. Its operating income increased 19.9% year-over-year to $28.19 million.
Furthermore, the company’s adjusted net income for the second quarter ended July 30, 2022, increased 34.6% to $17.69 million. Its adjusted net income per share came in at $1.24, up 33.3% year-over-year.
Analysts expect JILL’s revenue for the fiscal year ending January 2023 to increase 4% year-over-year to $608.80 million. The company’s EPS for the year is expected to increase 26.8% from the previous year to $2.70. Furthermore, JILL has surpassed its EPS estimates in each of the trailing four quarters, which is impressive.
The stock has gained 65% over the last year and 52.3% over the past three months to close the last trading session at $24.75.
JILL’s POWR Ratings reflect its strong prospects. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.
The stock has an A grade for Quality and Sentiment and a B for Value. JILL is ranked first among 66 stocks in the Fashion & Luxury industry.
Click here to see the additional POWR Ratings of JILL for Growth, Momentum, and Stability.
Lifeway Foods, Inc. (LWAY)
LWAY produces, markets, and sells probiotic-based products internationally. The company’s primary product is drinkable kefir, a cultured dairy product. The company also provides European-style soft cheeses. The company sells its products under the Lifeway and Fresh Made brand names and under private labels.
Julie Smolyansky, LWAY’s President and CEO, stated, “We have recently gained traction within the convenience channel and see this as an opportunity to build brand awareness and introduce new consumers to our single-serve products. We look forward to finishing the year strong and preparing for a healthy 2023.”
LWAY’s net sales increased 29.1% year-over-year to $38.14 million in the third quarter ended September 30, 2022. The company’s gross profit increased 8.5% year-over-year to $7.59 million. Its net income increased 104.8% year-over-year to $983K. Also, its EPS came in at $0.06, representing an increase of 100% year-over-year.
Analysts expect LWAY’s EPS and revenue for the fiscal year ending December 2023 to increase 375% and 5% year-over-year to $0.38 and $152 million, respectively.
The stock has gained 48.5% year-to-date to close the last trading session at $6.83. Moreover, it gained 14.2% over the past month.
It’s no surprise that LWAY has an overall rating of A, which equates to a Strong Buy in our POWR Ratings system.
It has an A grade for Growth and a B for Value, Stability, Sentiment, and Quality. It is ranked #4 out of 49 stocks in the Food Makers industry. To see LWAY’s rating for Momentum, click here.
PFE shares were trading at $50.62 per share on Monday morning, down $0.29 (-0.57%). Year-to-date, PFE has declined -11.49%, versus a -13.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Sristi Suman Jayaswal
The stock market dynamics sparked Sristi's interest during her school days, which led her to become a financial journalist. Investing in undervalued stocks with solid long-term growth prospects is her preferred strategy. Having earned a master's degree in Accounting and Finance, Sristi hopes to deepen her investment research experience and better guide investors.
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