Amid escalating macro headwinds, recession odds are rising every passing day. According to a probability model run by Ned Davis Research, currently, there exists a 98.1% chance of a global recession.
Moreover, billionaire investor Stanley Druckenmiller believes that the Federal Reserve’s efforts to tighten monetary policy could pose some problems for the economy. He stated, “I will be stunned if we don’t have a recession in ’23.”
However, U.S. consumer confidence witnessed a solid rebound in September 2022. According to the Conference Board, its Consumer Confidence Index hit 108.0 in September, up 4.2% month-over-month, underscoring resilient consumer sentiments.
Given the backdrop, we think fundamentally sound stocks Pfizer Inc. (PFE), Comcast Corporation (CMCSA), and Microchip Technology Incorporated (MCHP) could be ideal buys for you this week.
Pfizer Inc. (PFE)
PFE discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers medicines and vaccines in various therapeutic areas and is involved in contract manufacturing.
On September 26, 2022, PFE and BioNTech SE (BNTX) completed their submission to the U.S. Food and Drug Administration seeking Emergency Use Authorization of a 10-µg booster dose of Omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine for children aged 5 to 11 years. This vaccine is expected to boost PFE and BNTX’s revenues in the future.
Moreover, on September 13, 2022, PFE and precision oncology company Strata Oncology, Inc. announced the expansion of their clinical collaboration in the Strata Precision Indications for Approved THerapies (Strata PATHTM) trial. This trial is expected to be a game changer in precision oncology.
PFE’s revenues came in at $27.74 billion for the second quarter that ended July 3, 2022, up 46.8% year-over-year. Its non-GAAP net income came in at $11.66 billion, up 93.5% year-over-year, while its non-GAAP EPS came in at $2.04, up 92.5% year-over-year.
Analysts expect PFE’s revenue and EPS to increase 23.5% and 46.6% year-over-year to $100.43 billion and $6.48, respectively, in 2022. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. PFE’s shares have lost marginally intraday to close the last trading session at $44.16.
PFE has an overall A rating, which indicates a Strong Buy in our proprietary POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
PFE has an A grade for Value and a B grade for Quality. Within the Medical - Pharmaceuticals industry, it is ranked #9 of 162 stocks. Click here for the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for PFE.
Comcast Corporation (CMCSA)
CMCSA operates as a media and technology company worldwide. It operates through Cable Communications; Media; Studios; Theme Parks; and Sky segments.
On September 27, 2022, CMCSA announced the opening of its newest Twin Cities area Xfinity Store in Edina, Minnesota, marking the 15th Xfinity Store in the Twin Cities. This store launch is expected to expand CMCSA’s consumer base.
Also, on September 19, 2022, CMCSA announced its plans to double its network energy efficiency by 2030. CMCSA aims to cut the electricity per consumed terabyte of data in half, and this initiative could be an impactful step toward sustainable development.
CMCSA’s revenue increased 5.1% year-over-year to $30.02 billion for the second quarter that ended June 30, 2022. Its operating income came in at $6.37 billion, up 15.6% year-over-year. Also, its adjusted net income came in at $4.51 billion, up 14.3% year-over-year, while its adjusted EPS came in at $1.01, up 20.2% year-over-year.
Street expects CMCSA’s revenue to increase 4.5% year-over-year to $121.60 billion in 2022, while its EPS is expected to grow 11.1% year-over-year to $3.59 in the same period. It surpassed EPS estimates in all four trailing quarters. CMCSA’s shares have lost 2.3% intraday to close the last trading session at $30.43.
CMCSA’s overall B rating equates to a Buy in our proprietary rating system. It also has a B grade for Value and Quality. Within the Entertainment - TV & Internet Providers industry, it is ranked first among nine stocks.
Click here for the additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for CMCSA.
Microchip Technology Incorporated (MCHP)
MCHP develops, manufactures, and sells smart, connected, and secure embedded control solutions in the Americas, Europe, and Asia. The company serves more than 120,000 customers across the industrial, automotive, consumer, aerospace and defense, communications, and computing markets.
On September 19, 2022, MCHP launched a new family of META-DX2+ PHYs, the industry’s first solution to integrate 1.6T (terabits per second) of line-rate end-to-end encryption and port aggregation. This new product added to the company’s portfolio aims to offer advanced connectivity solutions amid rapid digitalization.
MCHP’s net sales came in at $1.96 billion for the fiscal 2023 first quarter that ended June 30, 2022, up 25.1% year-over-year. Its non-GAAP net income came in at $767.20 million, up 37.3% year-over-year. Also, its non-GAAP EPS came in at $1.37, up 38.4% year-over-year.
MCHP’s revenue is expected to increase 25.1% year-over-year to $2.06 billion in the quarter ending September 2022. Its EPS is expected to increase 34.6% year-over-year to $1.44 for the same period. It surpassed EPS estimates in all four trailing quarters. Over the past three months, the stock has gained 6.8% to close the last trading session at $61.99.
MCHP has an overall B rating, which indicates a Buy in our proprietary rating system. It has a B grade for Growth and Quality. Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #31 out of 92 stocks.
Click here for the additional POWR Rating for Value, Momentum, Stability, and Sentiment for MCHP.
PFE shares fell $0.03 (-0.07%) in premarket trading Friday. Year-to-date, PFE has declined -23.22%, versus a -22.62% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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