Concerns over the Federal Reserve’s interest rate hike to control surging inflation, the ongoing Russia-Ukraine war, supply chain constraints, and an upcoming recession have been driving immense market volatility of late. Frequent sell-offs have lowered the valuations of most stocks this year.
Although these factors are expected to persist for quite some time, some stocks are well-positioned to survive the challenges and deliver steady returns. According to BlackRock Investment Institute strategists, "U.S. stocks have suffered the biggest year-to-date losses since at least the 1960s. That's ignited calls to 'buy the dip.' We pass, for now."
Since determining the right entry point is difficult amid the current market volatility, it could be wise to invest in VEON Ltd. (VEON), Group 1 Automotive, Inc. (GPI), Xperi Holding Corporation (XPER), ArcelorMittal S.A. (MT), Ingevity Corporation (NGVT), and AutoNation, Inc. (AN), which Wall Street analysts expect to climb in the near term.
VEON Ltd. (VEON)
Based in the Netherlands, VEON is a communications and technology company that offers voice, data, and other telecommunication services through a range of wireless, fixed-line, and broadband internet services for corporations, operators, and consumers, as well as sells equipment and accessories.
It provides mobile telecommunications services under contract and prepaid plans for corporate and consumer segments and value-added services.
VEON’s total revenue for its fiscal 2021 fourth quarter ended December 31, 2021, increased 12.2% year-over-year to $2.05 billion. The company’s operating profit came in at $417 million, indicating a 77.3% rise from the prior-year period.
Its net profit came in at $341 million for the quarter, up 874.3% from the year-ago period. As of March 31, 2022, the company had $2.25 billion in cash and cash equivalents.
Analysts expect the company’s EPS to hit $0.39 for its fiscal 2022 ending December 31, 2022, representing a 41.3% rise from the prior-year period. The consensus revenue estimate of $8.86 billion for the same fiscal year represents a 13.8% year-over-year improvement.
The stock’s 1.18x non-GAAP forward P/E is 92.9% lower than the 16.51x industry average. In terms of forward Price/Cash Flow, VEON is currently trading at 0.28x, which is 96.7% lower than the 8.68x industry average.
Over the past week, the stock has lost 3.1% to close the last trading session at $0.46. Analysts expect the stock to hit the average price target of $2.35 in the near term, representing a 244.1% upside potential.
VEON’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.
It has an A grade for Value and Quality. Click here to see the additional ratings for VEON’s Sentiment, Growth, Stability, and Momentum. VEON is ranked #7 of 46 stocks in the A-rated Telecom - Foreign industry.
Group 1 Automotive, Inc. (GPI)
GPI participates in the automotive retail industry and operates in the United States, the U.K., and Brazil. The company sells new and used cars, light trucks, and related parts, as well as service and insurance contracts, offers automotive maintenance and repair services, and arranges related vehicle financing through its dealerships.
For its fiscal 2022 first quarter ended March 31, 2022, GPI’s total revenues increased 30.1% year-over-year to $3.84 billion. The company’s gross profit came in at $724.70 million, representing a 50.6% rise from the prior-year period.
GPI’s non-GAAP operating income came in at $263.70 million, up 74.3% from the year-ago period. While its non-GAAP net income increased 81.5% year-over-year to $184.60 million, its non-GAAP EPS increased 96.2% to $10.81. As of March 31, 2022, the company had $16.60 million in cash and cash equivalents.
The consensus EPS estimate of $42.30 for its fiscal 2022 ending December 31, 2022, represents a 15.5% year-over-year improvement. It surpassed the consensus EPS estimates in each of the four trailing quarters, which is impressive.
Analysts expect the company’s revenue to reach $16.45 billion for the same fiscal year, indicating a 22% rise from the prior-year period. GPI’s EPS is expected to grow at an 11.4% rate per annum over the next five years. Over the past year, the stock has lost 6.9% and closed the last trading session at $166.39.
The stock’s 3.85x forward Price/Cash Flow is 51% lower than the 7.87x industry average. In terms of non-GAAP forward P/E, GPI is currently trading at 3.95x, 63.3% lower than the 10.77x industry average. Analysts expect the stock to hit the average price target of $185 in the near term, representing a 7.9% upside potential.
GPI’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, equating to Strong Buy in our proprietary rating system.
It has an A grade for Value and a B grade for Growth and Quality. Click here for the additional ratings for GPI’s Stability, Sentiment, and Momentum. GPI is ranked #5 of 25 stocks in the B-rated Auto Dealers & Rentals industry.
Xperi Holding Corporation (XPER)
XPER operates as a consumer and entertainment product/solutions licensing company worldwide. In media, its licensees include multichannel video programming distributors, consumer electronics manufacturers, social media, and other new media companies.
For its fiscal 2022 first quarter ended March 31, 2022, XPER’s revenue increased 16.2% year-over-year to $257.42 million. The company’s operating income came in at $52.97 million, up 409.4% from the prior-year period.
XPER’s non-GAAP net income came in at $102.68 million, indicating a 54.8% rise from the prior-year period. Its non-GAAP EPS increased 55.9% year-over-year to $0.92. The company had cash and cash equivalents of $214.10 million as of March 31, 2022.
Analysts expect XPER’s EPS to improve marginally from the prior-year period to $2.05 for its fiscal 2022 ending December 31, 2022. It surpassed the consensus EPS estimates in three of the trailing four quarters.
The consensus revenue estimate of $927.75 million for the same fiscal year represents a 5.7% rise from the prior-year period. The company’s EPS is expected to grow at a 15% rate per annum over the next five years. Over the past week, the stock has lost 1.8% to close the last trading session at $14.09.
The stock’s 0.46x non-GAAP forward PEG is 64.7% lower than the 1.29x industry average. In terms of non-GAAP forward P/E, XPER is currently trading at 6.83x, 59.4% lower than the 16.80x industry average. Analysts expect the stock to hit the average price target of $23.67 in the near term, representing a 69.2% upside potential.
XPER’s POWR Ratings reflect its solid prospects. The stock has an overall A rating, equating to Strong Buy in our proprietary rating system.
It has an A grade for Growth and a B grade for Quality, Sentiment, and Value. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for XPER’s Momentum and Stability here. XPER is ranked #4 of 96 stocks in the B-rated Semiconductor & Wireless Chip industry.
ArcelorMittal S.A. (MT)
Based in Luxembourg, MT owns and operates steel, iron ore manufacturing, and coal mining facilities worldwide. The company serves the automotive, appliance, engineering, construction, energy, and machinery industries through a centralized marketing organization and distributors.
For its fiscal 2022 first quarter ended March 31, 2022, MT’s sales increased 34.9% year-over-year to $21.84 billion. The company’s operating income came in at $4.43 billion, representing a 67.9% rise from the prior-year period.
While its net income increased 80.5% year-over-year to $4.13 billion, its EPS increased 121.2% to $4.27. As of March 31, 2022, the company had $5.57 billion in cash and cash equivalents.
Analysts expect the company’s revenue to improve 6.6% year-over-year to $81.63 billion for fiscal 2022 ending December 31, 2022. Over the past week, the stock has lost 6.1% to close the last session at $26.
The stock’s 1.94x forward Price/Cash Flow is 68.5% lower than the 6.16x industry average. In terms of non-GAAP forward P/E, MT is currently trading at 2.23x, 78.3% lower than the 10.2x industry average. Analysts expect the stock to hit the average price target of $53 in the near term, representing a 102.6% upside potential.
MT’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, equating to Strong Buy in our proprietary rating system.
The stock has an A grade for Value and Sentiment and a B for Momentum and Quality. Click here to see the additional ratings for MT (Growth and Stability). It is ranked #4 of 32 stocks in the A-rated Steel industry.
Ingevity Corporation (NGVT)
NGVT manufactures and sells specialty chemicals and activated carbon materials through its Performance Materials and Performance Chemicals segments worldwide. The company offers adhesives, inks, soaps, detergents, agricultural chemicals, metalworking fluids, and lubricants.
NGVT’s fiscal 2022 first-quarter net sales increased 19.5% year-over-year to $382.80 million. The company’s gross profit came in at $137.80 million, indicating a 9.2% year-over-year improvement. Its pre-tax income came in at $77.60 million for the quarter, representing a 25.6% rise from the year-ago period.
NGVT’s non-GAAP net earnings came in at $63.50 million, up 22.4% from the prior-year period. Its non-GAAP EPS increased 27.6% year-over-year to $1.62. As of March 31, 2022, the company had $222.60 million in cash and cash equivalents.
Analysts expect NGVT’s EPS to be $6.03 for fiscal 2022 ending December 31, 2022, representing a 15.3% year-over-year improvement. It surpassed Street EPS estimates in each of the trailing four quarters.
The consensus revenue estimate of $1.59 billion in the same fiscal year represents a 14.4% year-over-year improvement. Its EPS is expected to grow at a rate of 6.2% over the next five years. Over the past week, the stock has lost 9.4% to close the last trading session at $61.50.
The stock’s 1.02x non-GAAP forward PEG is 5.7% lower than the 1.08x industry average. In terms of non-GAAP forward P/E, NGVT is currently trading at 10.18x, 0.5% lower than the 10.24x industry average. Analysts expect the stock to hit the average price target of $91.67 in the near term, representing a 49.1% upside potential.
NGVT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, equating to Strong Buy in our proprietary rating system.
It has a B grade for Sentiment, Stability, and Quality. Click here to see the additional ratings for NGVT’s Value, Growth, and Momentum. NGVT is ranked #7 of 82 stocks in the C-rated Technology - Services industry.
AutoNation, Inc. (AN)
AN operates as an automotive retailer that offers a range of new and used vehicles, wholesale parts, repair, maintenance, and collision services. The company also provides automotive finance and insurance products that comprise vehicle services and other protection products and arranges finance for vehicle purchases through third-party finance sources.
AN’s total revenue for its fiscal 2022 first quarter ended March 31, 2022, increased 14.4% year-over-year to $6.75 billion. The company’s gross profit came in at $1.31 billion, representing a 26.7% year-over-year improvement. Its adjusted operating income came in at $477.80 million, indicating a 54.2% rise from the prior-year period.
AN’s adjusted net income came in at $362.10 million for the quarter, up 54.9% from the year-ago period. Its adjusted EPS rose 107.2% year-over-year to $5.78. As of March 31, 2022, the company had $608.10 million in cash and cash equivalents.
Analysts expect the company’s EPS to hit $23.38 for its fiscal 2022 ending December 31, 2022, representing a 28.9% rise from the prior-year period. It surpassed Street EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $27.99 billion for the same fiscal year represents an 8.3% year-over-year improvement.
Its EPS is expected to grow at a rate of 24.7% per annum over the next five years. Over the past week, the stock has lost 2.4% to close the last trading session at $110.64.
The stock’s 5.55x forward Price/Cash Flow is 29.5% lower than the 7.87x industry average. In terms of non-GAAP forward P/E, AN is currently trading at 4.73x, 56.1% lower than the 10.77x industry average. Analysts expect the stock to hit the average price target of $142 in the near term, representing a 28.3% upside potential.
AN’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.
It has an A grade for Value and a B grade for Growth and Quality. Click here to see the additional ratings for AN’s Sentiment, Stability, and Momentum. AN is ranked #3 in the Auto Dealers & Rentals industry.
VEON shares were trading at $0.47 per share on Tuesday afternoon, up $0.01 (+2.03%). Year-to-date, VEON has declined -72.51%, versus a -20.68% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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