Consumer sentiment has been on a downtrend amid the rising inflation and the possibility of a recession looming over the economy. Moreover, according to the Labor Department, applications for jobless aid rose to 235,000 for the week ended July 2, 2022, the most since mid-January, adding to the woes.

Given such volatile circumstances, as evident from the CBOE Volatility Index’s 53.7% year-to-date gains, investors should be prepared for the volatile ride and trade cautiously.

We think adding recently upgraded stocks Lamar Advertising Company (LAMR), EPR Properties (EPR), Merck & Co., Inc. (MRK), and Tenaris S.A. (TS) to your portfolio could be wise, given their fundamental strength. These stocks are rated Buy in our POWR Ratings system.

Lamar Advertising Company (LAMR)

LAMR is one of North America’s largest outdoor advertising companies, with over 352,000 displays across the United States and Canada. Also, the company offers the largest network of digital billboards in the United States, with over 3,900 displays.  On July 7, 2022, Citigroup upgraded LAMR from Neutral to Buy.

On May 4, 2022, LAMR announced its complete acquisition of Burkhart Advertising Inc. in Indiana, a leading out-of-home advertising provider. With this acquisition, LAMR aims to expand the traditional advertising business with a modern touch.

LAMR’s net revenues increased 21.7% year-over-year to $451.39 million in the first quarter that ended March 31, 2022. Its net income came in at $92.06 million, up 140.8% year-over-year, while its EPS came in at $0.91, up 139.5% year-over-year. Also, its adjusted EBITDA came in at $191.25 million, up 25.5% year-over-year.

For fiscal 2022, LAMR’s revenue is expected to grow 10.7% year-over-year to $1.98 billion. Its EPS is estimated to increase 27.9% year-over-year to $4.90 in 2022. It surpassed the EPS estimates in three of the four trailing quarters. Over the past month, the stock has lost 6.3% to close the last trading session at $91.72.

LAMR has an overall B rating, which equates to a Buy in our proprietary POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

In addition, it has a B grade for Quality. LAMR is ranked #3 out of 51 stocks in the REITs – Diversified industry. Click here to see the additional POWR Ratings for LAMR (Growth, Value, Momentum, Stability, and Sentiment).

EPR Properties (EPR)

EPR is a leading experiential net lease real estate investment trust (REIT) specializing in select enduring experiential properties in the real estate industry. The company has nearly $6.7 billion in total investments across 44 states. On July 7, 2022, Janney Montgomery Scott upgraded EPR from Neutral to Buy.

On June 2, 2022, EPR announced that it would acquire the Village Vacances Valcartier resort and hotel in Quebec City, Quebec, and the Calypso Waterpark in Ottawa. Gregory Silvers, EPR’s Chairman and CEO said, “Acquisitions demonstrate the value of our years of experience and long-standing relationships in experiential real estate.”

EPR’s total revenue increased 40.9% year-over-year to $157.47 million for the first quarter that ended March 31, 2022. Its net income came in at $36.16 million, compared to a loss of $2.65 million in the year-ago period. Moreover, its EPS came in at $0.48, compared to a loss per share of $0.04.

Analysts expect EPR’s revenue to be $585.40 million in 2022, representing a 10.1% year-over-year rise. In addition, the company’s EPS is expected to increase 115% year-over-year to $2.15 in 2022. Also, it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has gained 2.7% year-to-date to close the last trading session at $48.79.

EPR’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.

In addition, it has a B grade for Growth and Quality. EPR is ranked #6 out of 33 stocks in the REITs – Retail industry. Click here to see the additional POWR Ratings for EPR (Value, Momentum, Stability, and Sentiment).

Merck & Co., Inc. (MRK)

MRK operates as a healthcare company worldwide. It operates through two segments, Pharmaceutical and Animal Health. On July 7, 2022, Daiwa Capital upgraded MRK from Hold to Outperform.

MRK continues to make crucial contributions to healthcare. On June 29, 2022, MRK announced the launch of the Merck Digital Sciences Studio to generate innovative technologies for drug discovery and development. 

Moreover, on June 24, 2022, the European Commission approved KEYTRUDA, MRK’s anti-PD-1 therapy, for treating adults and adolescents with stage IIB or IIC melanoma, which is expected to add significantly to the company’s revenue stream upon commercialization.

MRK’s sales increased 49.6% year-over-year to $15.90 billion for its 2022 first quarter. The company’s net income came in at $4.31 billion, up 35.6% year-over-year, while its EPS came in at $1.70, up 36% year-over-year.

For 2022, analysts expect MRK’s revenue to increase 18.9% year-over-year to $57.92 billion. Its EPS is expected to increase 22.1% year-over-year to $7.35 in 2022. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has gained 21.4% year-to-date to close the last trading session at $93.01.

MRK has an overall A rating, which indicates a Strong Buy in our proprietary rating system.

MRK has an A grade for Growth and a B grade for Value, Stability, Sentiment, and Quality. Within the Medical – Pharmaceuticals industry, it is ranked first among 170 stocks. Click here to see the additional POWR Rating for Momentum for MRK.

Tenaris S.A. (TS)

Based in Luxembourg, TS and its subsidiaries produce and sell seamless and welded steel tubular products; and provide related services for the oil and gas industry and other industrial applications. On July 7, 2022, Jefferies upgraded TS from Hold to Buy.

On July 7, 2022, TS announced that it would acquire U.S. seamless steel pipe producer Benteler Steel & Tube Manufacturing Corp for $460 million. The company aims to expand its manufacturing business with this agreement.

TS’ net sales came in at $2.37 billion for the first quarter that ended March 31, 2022, up 100.3% year-over-year. Its income for the period came in at $503.43 million, up 399.6% year-over-year. In addition, its gross profit came in at $845.10 million, up 182.8% year-over-year.

TS’ revenue is expected to increase 63.6% year-over-year to $10.67 billion in 2022. Its EPS is estimated to increase 69.9% year-over-year to $3.16 in 2022. It surpassed EPS estimates in each of the trailing four quarters. The stock has gained 19.4% year-to-date to close the last trading session at $24.90.

TS has an overall B rating, equating to a Buy in our POWR Ratings system. It has an A grade for Sentiment and a B for Momentum and Quality. Click here to check additional TS ratings (Growth, Value, and Stability). TS is ranked #13 out of 32 stocks in the A-rated Steel industry.

LAMR shares were trading at $91.44 per share on Friday morning, down $0.28 (-0.31%). Year-to-date, LAMR has declined -22.83%, versus a -17.84% 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. More...

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