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Buy 5 Mid-Cap Stocks Poised to Turn Into Large Caps
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U.S. stock markets have witnessed renewed momentum in 2024 after an impressive 2023. The bull run continued for the past 18 months, barring some minor fluctuations. Meanwhile, market participants are expecting a 100% chance of the first rate cut to be initiated at the Fed FOMC meeting scheduled to start today.
Aside from the three major stock indexes, the mid-cap-centric S&P 400 index is up 10.2% year to date. Within the mid-cap space, a handful of stocks (market capital greater than $8 billion but currently less than $10 billion) have the potential to become large caps in the near future.
These stocks have seen positive earnings estimate revisions in the last 60 days and have strong price upside potential in the short-term. Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Why Mid-Cap Stocks?
Investment in mid-cap stocks is often recognized as a good portfolio diversification strategy. These stocks combine the attractive attributes of both small and large-cap stocks. Top-ranked, mid-cap stocks have a high potential to enhance their profitability, productivity and market share. These may also become large-cap over time.
If the economic growth slows down due to any unforeseen internal or external disturbance, mid-cap stocks will be less susceptible to losses than their large-cap counterparts owing to less international exposure.
On the other hand, if the economy continues to thrive, these stocks will gain more than small caps due to established management teams, a broad distribution network, brand recognition and ready access to the capital markets.
5 Mid-Caps Set to Turn to Large-Cap Stocks
These stocks could be poised to cross $10 billion in valuation, the yardstick for large-cap stocks status:
Maplebear Inc.
Maplebear is a grocery technology company operating principally in North America with grocers and retailers to transform how people shop. CART’s Instacart Platform offers retailers a suite of enterprise-grade technology products and services to power their e-commerce experiences, fulfill orders, digitize brick-and-mortar stores, provide advertising services, and glean insights. CART also operates virtual convenience stores; and provides software-as-a-service solutions to retailers.
Attractive Short-Term Price Upside Potential for CART Stock
The Zacks Consensus Estimate for the current-year earnings of CART has improved 10.9% in the last 60 days. The short-term average price target of brokerage firms for the stock represents an increase of 18.6% from the average target price of $43.85. The brokerage target price is currently in the range of $32-$52.
Image Source: Zacks Investment Research
Norwegian Cruise Line Holdings Ltd.
Norwegian Cruise Line reported solid second-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. NCLH is benefiting from strong demand, high pricing and increased booking volumes, leading to record advance ticket sales.
NCLH’s focus on fleet expansion efforts and digital initiatives bodes well. These factors showcase that the company’s strategy is well-aligned with its growth goals and 2026 financial and sustainability targets. Given the substantial progress made so far and current demand expectations, NCLH raised its 2024 full-year guidance.
NCLH Stock Has Impressive Price Appreciation Potential
The Zacks Consensus Estimate for the current-year earnings of NCLH has improved 12.1% in the last 60 days. The short-term average price target of brokerage firms for the stock represents an increase of 16.8% from the average target price of $22.58. The brokerage target price is currently in the range of $17.5-$32.
Image Source: Zacks Investment Research
Sirius XM Holdings Inc.
Sirius XM has been benefiting from an improvement in ad revenues, offset by a decline in Sirius XM Standalone’s paid promotional subscribers. SIRI continues to bolster its content offerings by adding content from all spheres, including music, politics, news and sports, to its platform. SIRI’s expanded podcast efforts fit well with the existing advertising-led focus at Pandora and AdsWizz and are expected to improve monetization in the near term.
Huge Price Upside Potential for SIRI Shares
The Zacks Consensus Estimate for the current-year earnings of SIRI has improved 2.7% in the last seven days. The short-term average price target of brokerage firms for the stock represents a jump of 51.2% from the average target price of $37.05. The brokerage target price is currently in the range of $25-$65.
Image Source: Zacks Investment Research
Abercrombie & Fitch Co.
Abercrombie & Fitch has benefited from continued momentum across its both brands, which bolstered sales in fiscal 2024. ANF witnessed strong sales growth for each of its brands during the last reported quarter.
ANF reported sturdy second-quarter fiscal 2024 results. Management anticipates net sales for fiscal 2024 to increase 12-13% year over year from $4.3 billion. For third-quarter fiscal 2024, net sales are projected to be up in low double digits year over year compared with our estimate of a 10.1% rise.
Robust Price Upside Potential for ANF Shares
The Zacks Consensus Estimate for the current-year earnings of ANF has improved 1.5% in the last seven days. The short-term average price target of brokerage firms for the stock represents a jump of 29.6% from the average target price of $184.33. The brokerage target price is currently in the range of $147-$220.
Image Source: Zacks Investment Research
Pilgrim's Pride Corp.
Pilgrim's Pride’s portfolio diversification strategies, including its focus on branded offerings and strategic key customer partnerships, play a crucial role in driving growth. Focus on key customers is a pathway for refining PPC’s portfolio and creating competitive advantages over its peers.
PPC’s strategic investments in its U.S. and Mexican operations, including new facilities and expanded capacities, support growth. In addition to expansion, PPC is focused on cost-cutting measures, including optimizing operational processes and reducing grain input costs, which is driving profitability.
Solid Price Upside Potential for PPC Stock
The Zacks Consensus Estimate for the current-year earnings of PPC has improved 12.9% in the last 60 days. The short-term average price target of brokerage firms for the stock represents an increase of 13.5% from the average target price of $45.80. The brokerage target price is currently in the range of $36-$55.
Image Source: Zacks Investment Research
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Buy 5 Mid-Cap Stocks Poised to Turn Into Large Caps
U.S. stock markets have witnessed renewed momentum in 2024 after an impressive 2023. The bull run continued for the past 18 months, barring some minor fluctuations. Meanwhile, market participants are expecting a 100% chance of the first rate cut to be initiated at the Fed FOMC meeting scheduled to start today.
Aside from the three major stock indexes, the mid-cap-centric S&P 400 index is up 10.2% year to date. Within the mid-cap space, a handful of stocks (market capital greater than $8 billion but currently less than $10 billion) have the potential to become large caps in the near future.
Five such stocks are Maplebear Inc. (CART - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) , Sirius XM Holdings Inc. (SIRI - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and Pilgrim's Pride Corp. (PPC - Free Report) .
These stocks have seen positive earnings estimate revisions in the last 60 days and have strong price upside potential in the short-term. Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Why Mid-Cap Stocks?
Investment in mid-cap stocks is often recognized as a good portfolio diversification strategy. These stocks combine the attractive attributes of both small and large-cap stocks. Top-ranked, mid-cap stocks have a high potential to enhance their profitability, productivity and market share. These may also become large-cap over time.
If the economic growth slows down due to any unforeseen internal or external disturbance, mid-cap stocks will be less susceptible to losses than their large-cap counterparts owing to less international exposure.
On the other hand, if the economy continues to thrive, these stocks will gain more than small caps due to established management teams, a broad distribution network, brand recognition and ready access to the capital markets.
5 Mid-Caps Set to Turn to Large-Cap Stocks
These stocks could be poised to cross $10 billion in valuation, the yardstick for large-cap stocks status:
Maplebear Inc.
Maplebear is a grocery technology company operating principally in North America with grocers and retailers to transform how people shop. CART’s Instacart Platform offers retailers a suite of enterprise-grade technology products and services to power their e-commerce experiences, fulfill orders, digitize brick-and-mortar stores, provide advertising services, and glean insights. CART also operates virtual convenience stores; and provides software-as-a-service solutions to retailers.
Attractive Short-Term Price Upside Potential for CART Stock
The Zacks Consensus Estimate for the current-year earnings of CART has improved 10.9% in the last 60 days. The short-term average price target of brokerage firms for the stock represents an increase of 18.6% from the average target price of $43.85. The brokerage target price is currently in the range of $32-$52.
Image Source: Zacks Investment Research
Norwegian Cruise Line Holdings Ltd.
Norwegian Cruise Line reported solid second-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. NCLH is benefiting from strong demand, high pricing and increased booking volumes, leading to record advance ticket sales.
NCLH’s focus on fleet expansion efforts and digital initiatives bodes well. These factors showcase that the company’s strategy is well-aligned with its growth goals and 2026 financial and sustainability targets. Given the substantial progress made so far and current demand expectations, NCLH raised its 2024 full-year guidance.
NCLH Stock Has Impressive Price Appreciation Potential
The Zacks Consensus Estimate for the current-year earnings of NCLH has improved 12.1% in the last 60 days. The short-term average price target of brokerage firms for the stock represents an increase of 16.8% from the average target price of $22.58. The brokerage target price is currently in the range of $17.5-$32.
Image Source: Zacks Investment Research
Sirius XM Holdings Inc.
Sirius XM has been benefiting from an improvement in ad revenues, offset by a decline in Sirius XM Standalone’s paid promotional subscribers. SIRI continues to bolster its content offerings by adding content from all spheres, including music, politics, news and sports, to its platform. SIRI’s expanded podcast efforts fit well with the existing advertising-led focus at Pandora and AdsWizz and are expected to improve monetization in the near term.
Huge Price Upside Potential for SIRI Shares
The Zacks Consensus Estimate for the current-year earnings of SIRI has improved 2.7% in the last seven days. The short-term average price target of brokerage firms for the stock represents a jump of 51.2% from the average target price of $37.05. The brokerage target price is currently in the range of $25-$65.
Image Source: Zacks Investment Research
Abercrombie & Fitch Co.
Abercrombie & Fitch has benefited from continued momentum across its both brands, which bolstered sales in fiscal 2024. ANF witnessed strong sales growth for each of its brands during the last reported quarter.
ANF reported sturdy second-quarter fiscal 2024 results. Management anticipates net sales for fiscal 2024 to increase 12-13% year over year from $4.3 billion. For third-quarter fiscal 2024, net sales are projected to be up in low double digits year over year compared with our estimate of a 10.1% rise.
Robust Price Upside Potential for ANF Shares
The Zacks Consensus Estimate for the current-year earnings of ANF has improved 1.5% in the last seven days. The short-term average price target of brokerage firms for the stock represents a jump of 29.6% from the average target price of $184.33. The brokerage target price is currently in the range of $147-$220.
Image Source: Zacks Investment Research
Pilgrim's Pride Corp.
Pilgrim's Pride’s portfolio diversification strategies, including its focus on branded offerings and strategic key customer partnerships, play a crucial role in driving growth. Focus on key customers is a pathway for refining PPC’s portfolio and creating competitive advantages over its peers.
PPC’s strategic investments in its U.S. and Mexican operations, including new facilities and expanded capacities, support growth. In addition to expansion, PPC is focused on cost-cutting measures, including optimizing operational processes and reducing grain input costs, which is driving profitability.
Solid Price Upside Potential for PPC Stock
The Zacks Consensus Estimate for the current-year earnings of PPC has improved 12.9% in the last 60 days. The short-term average price target of brokerage firms for the stock represents an increase of 13.5% from the average target price of $45.80. The brokerage target price is currently in the range of $36-$55.
Image Source: Zacks Investment Research