Amazed by Nvidia's expected earnings growth this year? Join the club. But what about the fast-growing S&P 500 stocks, though, that everyone's missing out on?
Eight S&P 500 stocks — including consumer staples firm Estee Lauder, communications firm Paramount Global and casino operator Las Vegas Sands — are down this year so far despite being on track to post 35% or higher earnings growth this year, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
Talk about some overlooked sources of growth.
S&P 500 Earnings Drive Market Higher
Finding a disconnect between earnings growth and stock prices is no easy feat. The S&P 500 is up nearly 17% this year thanks in large part to robust earnings growth.
Analysts think S&P 500 earnings will rise 11% this year, says FactSet. And investors are willing to pay up for higher growth. Shares of Nvidia are up nearly 150% this year. Why? Analysts think the AI giant's profit will surge more than 111%. Nvidia is rebounding from its 50-day moving average. Ideally, volume should pick up as the stock rebounds, which would solidify the new buy zone.
And that makes the case of some overlooked growers even more interesting.
The Missed S&P 500 Growth
Look at Estee Lauder. Analysts think Estee Lauder will earn $3.34 a share in 2024. That means an increase of nearly 119% from 2023. And yes, that's even higher than Nvidia's expected profit growth.
But unlike Nvidia shares that are soaring, Estee Lauder's are down nearly 31% this year. And they yield an additional 2.7%. Investors, though, are taking their time on this one. The longer-term EPS Rating is just 52 and Composite Rating a lackluster 16.
But Las Vegas Sands is more puzzling. Shares are down roughly 15% this year. That explains its low Relative Strength Rating of just 15. And yet, analysts think the casino operator's profit will surge 38% this year. The company sports an EPS Rating of 81.
So before jumping into the same well-known growers, it might be worth looking at growth stories others are missing.
Overlooked S&P 500 Profit Growers
Their shares are down this year despite being on track for 35% or higher EPS.
| Company | Ticker | YTD change | Sector | 2024 EPS growth (est.) |
|---|---|---|---|---|
| Estee Lauder | -30.9% | Consumer Staples | 118.5% | |
| Paramount Global | -22.9% | Communication Services | 142.5% | |
| SBA Communications | -17.4% | Real Estate | 143.7% | |
| Las Vegas Sands | -15.7% | Consumer Discretionary | 38.0% | |
| Stanley Black & Decker | -10.7% | Industrials | 174.4% | |
| Wynn Resorts | -8.4% | Consumer Discretionary | 37.4% | |
| American Tower | -2.9% | Real Estate | 70.0% | |
| Norwegian Cruise Line | -0.5% | Consumer Discretionary | 105.3% |
