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3 Industrial Stocks with Healthy Growth Prospects
Stock Analysis & Ideas

3 Industrial Stocks with Healthy Growth Prospects

Apart from some prime banks releasing their results, it was the industrial production data that caught investors’ attention last week. Issued by the Federal Reserve, this metric gives an insight into the industrial output of the United States and the health of the U.S. economy.

The recent data, released on Friday, reveals that the industrial production in the U.S. advanced 5.5% year-over-year in March. The metric expanded 3.3% in January and 7.5% in February. On a month-over-month basis, industrial production grew 0.9% in March and February and 1% in January.

A snapshot of the report is given below.

Industrial Production: April Report

The breakdown of the federal report reflects that the manufacturing output grew 4.9%, the mining output increased 7%, and the output of the utilities industry rose 7.5% year-over-year in March.

For the first quarter of 2022, the U.S. industrial production increased 8.1% from the year-ago quarter. Manufacturing output was up 5.4%, and the mining output grew 8% in the quarter.

Promising Picks

Using the TipRanks Stock Screener tool, we have selected three stocks from the industrial goods sector that have a market capitalization of $10 billion to $200 billion, a ‘Perfect 10’ Smart Score, and carry either a Strong Buy or Moderate Buy consensus rating.

Applied Materials, Inc. (NASDAQ: AMAT)

The $100.1-billion company provides software solutions, equipment, and services necessary for the making of advanced displays and chips. It is headquartered in Santa Clara, CA.

In February, Applied Materials’ President and CEO, Gary Dickerson, said, “Our outlook for 2022 and beyond is very positive as long-term secular trends drive our markets structurally higher and Applied’s broad technology portfolio puts us in a great position to capture a larger portion of our served markets.”

For the second quarter of Fiscal 2022 (ending April 2022), the company anticipates net sales to be $6.35 billion, +/-$300 million, and adjusted earnings (non-GAAP) to be within the $1.75-$2.05 per share range.

Five days ago, Sidney Ho of Deutsche Bank reiterated a Buy rating on Applied Materials while lowering the price target to $145 (27.91% upside potential) from $180. The analyst opines that the semiconductor capital equipment companies will continue to sound bullish on demand despite ongoing supply constraints.

Presently, Applied Materials has a Moderate Buy consensus rating based on 11 Buys and four Holds. Applied Materials’ average price forecast of $172.93 suggests 52.55% upside potential from the current level. Over the past year, shares of Applied Materials have declined 13.4%.

Canadian Pacific Railway Limited (NYSE: CP)

The transcontinental freight services provider is based in Calgary, Canada. It transports coal, sulphur, grain, metals, and other commodities. Over the past year, shares of this $71-billion company have increased 4.5%.

In January, the company’s President and CEO, Keith Creel, said that solid demand, economic strength, and unique initiatives have well-positioned Canadian Pacific “to drive profitable growth” for shareholders, customers, and employees.

“These factors, coupled with the progression of our proposed combination with Kansas City Southern, position CP for another history-making year,” he added.

Recently, Wells Fargo analyst Allison Poliniak maintained a Buy rating on Canadian Pacific while increasing the price target to $88 (15.21% upside potential) from $87.

The company has a Moderate Buy consensus rating based on nine Buys and four Holds. Canadian Pacific’s average price target is $84.62, suggesting 10.79% upside potential from current levels.

Carlisle Companies Incorporated (NYSE: CSL)

Based in Scottsdale, AZ, the $12.7-billion company manufactures and supplies engineered products to be used by original equipment manufacturers. It also supplies products for aftermarket customers. Shares of this company surged 38% last year.

In February, the Chairman, President, and CEO of Carlisle Companies, D Christian Koch, said, “With all of our segments trending positively both from a demand and operational perspective, Carlisle is well positioned to drive continued profitable growth in 2022 and beyond.”

Recently, Timothy Wojs of Robert W. Baird maintained a Buy rating on Carlisle Companies with a price target of $300 (22.80% upside potential).

Carlisle Companies presently has a Strong Buy consensus rating based on six Buys and two Holds. Carlisle Companies’ price forecast of $282 mirrors 15.44% upside potential from current levels.

Conclusion

Applied Materials, Canadian Pacific and Carlisle Companies exhibit solid growth prospects amid the near-term headwinds of supply-chain issues, cost inflation, labor problems and freight charges, making them worth the consideration.

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