The major stock market indexes have experienced steep losses lately owing to investors’ rotating away from technology stocks amid rising bond yields. In addition, the ongoing supply chain disruptions and the rising oil prices are stretching the inflationary environment even further. Moreover, Treasury Secretary Janet Yellen told CNBC that she believes the economy would fall into a recession if the U.S. government fails to address the borrowing limit before an unprecedented default on the debt.
However, promising data for Merck & Co., Inc.’s (MRK) oral COVID-19 treatment has provided some support to the market in addition to expectations of another strong earnings season. In August, Federal Reserve Chairman Jerome Powell indicated that “rate hikes aren’t imminent,” Moreover, according to a Factset report, more S&P 500 companies have issued positive EPS guidance for the third quarter.
So, it could be wise to scoop up shares of Micron Technology, Inc. (MU), Foot Locker, Inc. (FL), Nu Skin Enterprises, Inc. (NUS), and MRC Global Inc. (MRC). Wall Street analysts expect these stocks to rally more than 35% in the near term.
Micron Technology, Inc. (MU)
MU designs, manufactures, and sells memory and storage products worldwide. The company operates through four segments: Compute and Networking Business Unit; Mobile Business Unit; Storage Business Unit; and Embedded Business Unit. It offers DRAM, NAND, NOR, 3D XPoint memory under the Micron and Crucial brands and private labels.
On July 29, 2021, MU announced that it had begun volume shipments of the world’s first 176-layer NAND Universal Flash Storage 3.1 mobile solution. Raj Talluri, senior vice president and general manager of Mu’s Mobile Business Unit, said, “Our breakthrough 176-layer NAND supercharges smartphones with unparalleled performance, delivering rich multimedia content to consumers’ fingertips in a flash.”
MU’s net sales surged 36.6% year-over-year to $8.27 billion in the fiscal fourth quarter ended September 2, 2021. The company’s non-GAAP operating income grew 136% year-over-year to $3.07 billion, while its non-GAAP net income came in at $2.78 billion, representing a 126% year-over-year increase. Also, its non-GAAP EPS came in at $2.42, up 124.1% year-over-year.
MU’s EPS is expected to come in at $2.11 for the quarter ending November 30, 2021, representing a 170.5% year-over-year increase. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Also, the company’s revenue is expected to increase 15.8% year-over-year to $37.08 billion in fiscal 2023.
Over the past year, the stock has gained 51.7% to close yesterday’s trading session at $70.62. Wall Street analysts expect the stock to hit $100.95 in the near term, which indicates a potential upside of 42.9%.
MU’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its weighting.
The stock has an A grade for Value, and a B grade for Growth, Momentum, and Quality. Within the B-rated Semiconductor & Wireless Chip industry, MU is ranked #33 of 96 stocks. To see MU’s ratings for Momentum and Sentiment as well, click here.
Foot Locker, Inc. (FL)
FL operates as an athletic footwear and apparel retailer. The company retails athletic footwear, apparel, accessories, equipment, and team licensed merchandise under the Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports, Eastbay, Footaction, Runners Point, and Sidestep brand names.
On September 20, 2021, FL announced that it had completed its acquisition of Eurostar, Inc. Richard A. Johnson, Chairman and CEO of FL, said, “WSS brings an expanded and differentiated customer base rooted in the rapidly growing Hispanic community, diversifies and enhances our product mix, and strengthens our footprint with a 100% off-mall store fleet located in key markets.”
FL’s net sales surged 9.5% year-over-year to $2.27 billion in the fiscal second quarter ended July 31, 2021. The company’s total assets grew 9.7% sequentially to $7.58 billion. Its adjusted net income came in at $233 million, representing a 210.7% year-over-year increase. Also, its adjusted EPS came in at $2.21, up 211.3% year-over-year.
For fiscal 2022, analysts expect FL’s EPS and revenue to increase 155.5% and 17.7% year-over-year to $7.18 and $8.88 billion, respectively. In addition, it surpassed Street EPS estimates in each of the trailing four quarters.
The stock has gained 30.8% over the past year to close yesterday’s trading session at $46.59. Wall Street analysts expect the stock to hit $69.86 in the near term, which indicates a potential upside of 49.9%.
FL’s POWR Ratings reflect solid prospects. In addition, it has an A grade for Value and Momentum. Click here to see the additional POWR Ratings for FL (Growth, Stability, Sentiment, and Quality). FL is ranked #20 of 36 stocks in the A-rated Athletics & Recreation industry.
Nu Skin Enterprises, Inc. (NUS)
NUS develops and distributes personal care and wellness products worldwide. The company provides skincare systems, including ageLOC Me customized skin care, ageLOC Spa systems, and ageLOC LumiSpa skin treatment and cleansing devices. In addition, it is involved in the research and product development of skin care products and nutritional supplements.
On October 4, 2021, Ryan Napierski, the President and CEO of NUS, said, “Despite the unanticipated COVID-related disruptions, our Collagen+ launch in the U.S. drove continued strong growth, and we successfully introduced our Tencent digital tools in China during the quarter. We are optimistic about our upcoming product launches and the rollout of additional social commerce tools in late 2021 and into next year.”
NUS’ revenue surged 15% year-over-year to $704.05 million in the fiscal second quarter ended June 30, 2021. The company’s operating income grew 47% year-over-year to $85.38 million, while its net income came in at $59.34 million, representing a 41.8% year-over-year increase. Also, its EPS came in at $1.15, up 42% year-over-year.
Analysts expect NUS’s EPS and revenue to increase 17.9% and 8.6% year-over-year to $4.28 and $2.80 billion, respectively, in fiscal 2021. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock has lost 19.4% over the past month to close yesterday’s trading session at $40.66. However, Wall Street analysts expect the stock to hit $66.20 in the near term, which indicates a potential upside of 62.8%.
It’s no surprise that NUS has an overall B rating, which equates to a Buy in our POWR Rating system. The stock has an A grade for Quality and Value.
MRC Global Inc. (MRC)
MRC distributes pipes, valves, fittings, and other infrastructure products and services to the energy industry internationally. Its offerings such as gate, globe, check, diaphragm, needle, and plug valves are used in the construction, maintenance, and repairing under extreme operating conditions.
On July 29, 2021, Rob Saltiel, MRC Global’s President and CEO, said, “We are increasingly optimistic about our outlook across all of our end-markets, including the energy transition space, through the second half of 2021 and into 2022.”
MRC’s sales surged 13.9% year-over-year to $686 million in the fiscal second quarter ended June 30, 2021. The company’s adjusted gross profit grew 13.5% year-over-year to $134 million. Its adjusted net income came in at $6 million, compared to a loss of $8 million in the prior-year period. Also, its adjusted EPS came in at $0.08, compared to a loss per share of $0.10 in the year-ago period.
MRC’s EPS is expected to be $0.60 in fiscal 2022, representing a 1,100% year-over-year increase. In addition, it surpassed Street EPS estimates in each of the trailing four quarters. Also, the company’s revenue is expected to increase 17.9% year-over-year to $682.36 million for the quarter ending December 31, 2021.
Over the past year, the stock has gained 78.1% to close yesterday’s trading session at $7.71. Wall Street analysts expect the stock to hit $10.50 in the near term, which indicates a potential upside of 36.2%.
MRC’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, Momentum, and Value. We also have graded MRC for Sentiment, Stability, and Quality. Click here to access all of MRC’s ratings. MRC is ranked #5 of 42 stocks in the Energy – Services industry.
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MU shares fell $0.05 (-0.07%) in after-hours trading Tuesday. Year-to-date, MU has declined -6.09%, versus a 16.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...
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