Yahoo Finance Relative Strength Watch: 3 Stocks Delivering Outsized Returns
Investors who focus on stocks displaying relative strength can find themselves in favorable market trends where buyers are in control, helping to deliver outsized gains.
And that’s precisely what we’ve seen in 2023 from Chipotle Mexican Group CMG, Graphic Packaging Company GPK, and W.W. Grainger GWW.
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In addition, all three are forecasted to witness solid growth and have seen their near-term earnings outlooks turn favorable, undoubtedly a strong pairing. Let’s take a closer look at each.
Chipotle Mexican Group
Chipotle Mexican Grill, a Zacks Rank #1 (Strong Buy) operates quick-casual and fresh Mexican food restaurant chains. We see their restaurants everywhere, and generally with packed customer lines.
The company posted an impressive quarter in its latest release, exceeding the Zacks Consensus EPS estimate by nearly 20%. Quarterly revenue totaled $2.4 billion, ahead of expectations and improving roughly 16% from the year-ago quarter.
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The company’s growth profile can’t be ignored, with earnings forecasted to soar more than 30% in its current fiscal (FY23) on 14% higher revenues. And in FY24, earnings and revenue are projected to climb an additional 20% and 12%, respectively.
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Graphic Packaging Company
Graphic Packaging Holding is a leading provider of paperboard packaging solutions for various products. The stock presently sports a favorable Zacks Rank #1 (Strong Buy), with earnings expectations increasing across all timeframes.
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GPK shares could also entice value-focused investors, further reflected by the Style Score of “A” for Value. Graphic Packaging shares presently trade at an 8.5X forward earnings multiple, a fraction of the 14.3X five-year median.
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The company grew revenue by more than 30% in its last fiscal year, with analysts calling for an additional 6% growth in FY23. Earnings growth is there, too, with estimates projecting an uptick of 30% in FY23.
W.W. Grainger Inc.
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair, and operating (MRO) products and services. The company boasts the highly-coveted Zacks Rank #1 (Strong Buy).
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In addition, W.W. Grainger’s 61% trailing twelve-month return on equity (ROE) is worth noting, well above the Zacks Industrial Products sector average. This reflects a higher level of efficiency in generating profits from existing assets.
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GWW is forecasted to witness earnings growth of nearly 20% in its current fiscal year (FY23) on 10% higher revenues. The stock boasts a Growth Style Score of “A.”
Bottom Line
For those interested in relative strength, all three stocks above – Chipotle Mexican Group CMG, Graphic Packaging Company GPK, and W.W. Grainger GWW – fit the criteria.
On top of providing market-beating returns, all three have seen their near-term earnings outlook shift positively and carry solid growth profiles.
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Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report
Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report
