Among the Zacks Rank #1 (Strong Buy) list several recently added stocks are poised to keep ripping higher.
With representation from a variety of sectors, here are three of these top-rated stocks to consider right now.
Dell Technologies DELL: One of the hottest tech companies of the year has been Dell Technologies, with DELL being added to the Zacks Rank #1 (Strong Buy) list this week.
Dell’s stock has now soared +78% this year and has continued to flirt with new 52-week highs after reporting stellar Q2 results in late August.
Driven by growth across its Client Solutions Group (CSG) and Solutions Group (SG), Q2 sales of $22.93 billion beat estimates by 10% and rose 13% year over year. Furthermore, Q2 earnings of $1.74 per share was up 3% YoY and crushed expectations by 54% with estimates at $1.13 a share.
Through a partnership with Nvidia NVDA, Dell has aimed to boost its generative AI capabilities going forward. The Nvidia partnership will certainly garnish Dell’s stock a lot of attention and rightfully so as earnings estimates are nicely up over the last 60 days which is an indication that DELL shares could keep ripping.
Installed Building Products IBP: Among the Zacks Construction sector, Installed Building Products’ stock was added to the strong buy list earlier this month.
Benefiting from what has been one of the strongest areas in the economy, Installed Building Products’ operations are crucial to construction-related activities as the second largest residential insulation installer in the U.S.
Shares of IBP are up +59% in 2023 with steady top and bottom line growth expected. Sales are projected to be up 4% this year and rise another 5% in fiscal 2024 to $2.94 billion. Annual earnings are expected to rise 5% in FY23 and edge up another 4% in FY24 at $9.77 per share. More importantly, in the last two months, FY23 and FY24 earnings estimates are up 8% and 6% respectively.
American Eagle Outfitters AEO: Lastly, American Eagle Outfitters was added to the Zacks Rank #1 (Strong Buy) list last week and is a retail stock that could have more upside.
This is largely indicated in the company’s attractive P/E valuation with EPS estimates soaring after better than expected Q2 earnings last Wednesday. The specialty apparel retailer posted Q2 earnings of $0.25 per share which easily surpassed estimates of $0.15 a share. This also skyrocketed 525% from Q2 EPS of $0.04 a share in the prior year quarter.
American Eagle’s stock is up a respectable +11% YTD and the rising earnings estimates are starting to confirm AEO shares look cheap at around $15. To that point, American Eagle’s current FY24 EPS estimates have soared 20% over the last 60 days with FY25 estimates climbing 16%.
Trading at 13.6X forward earnings, American Eagle’s FY24 earnings are now projected to climb 25% to $1.21 a share compared to EPS of $0.97 per share a year ago. Fiscal 2025 earnings are expected to be virtually flat but American Eagle’s stock still trades at an attractive discount to the Zacks Retail-Apparel and Shoes Markets’ 17.1X and the S&P 500’s 20.9X.
Bottom Line
Rising earnings estimates have kept Dell Technologies and Installed Building Products’ stock climbing this year and American Eagle has joined the club. Now looks like a great time to buy these highly-ranked stocks as the trend in earnings estimate revisions continues to point to even more upside.
American Eagle Outfitters, Inc. (AEO): Free Stock Analysis Report
Dell Technologies Inc. (DELL): Free Stock Analysis Report
Installed Building Products, Inc. (IBP): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
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This article originally appeared on Zacks
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