The Zacks Analyst Blog Highlights Fortinet, Barrick Gold, Okta, The Progressive and Norwegian Cruise Line
For Immediate Release
Chicago, IL – October 2, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Fortinet Inc. FTNT, Barrick Gold Corp. GOLD, Okta Inc. OKTA, The Progressive Corp. PGR and Norwegian Cruise Line Holdings Ltd. NCLH.
Here are highlights from Tuesday’s Analyst Blog:
5 Momentum Stocks for October After a Surprisingly Strong September
September is generally known as the worst-performing month on Wall Street. But this year, the situation was completely different. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — were up 1.9%, 2%, and 2.7%, respectively. The broad-market benchmark — the S&P 500 — posted its first September in green since 2019.
On Monday, the month ended with the Dow and the S&P 500 recording their all-time highs on both intraday and closing basis. October is also known to be highly volatile. September’s solid performance and the Fed’s dovish stance should drive U.S. stock markets this month too.
Under this circumstance, we recommend five momentum stocks for October. These are - Fortinet Inc., Barrick Gold Corp., Okta Inc., The Progressive Corp. and Norwegian Cruise Line Holdings Ltd.
Positives for October Stock Market Outlook
This year September started with a market rout as investors were highly concerned about a near-term recession. A large section of market participants thought that the Fed was too late to adopt an accommodative monetary stance.
Nevertheless, the situation took a complete turnaround after the central bank announced an aggressive 50 basis-point cut in the benchmark interest rate at the September FOMC meeting. Moreover, the release of a few key better-than-expected economic data boosted investors’ confidence in a much-hyped soft landing of the economy.
In October, a major driver will be the third-quarter 2024 earnings results. Our current projection shows that total earnings for the S&P 500 index are expected to be up 3.34% from the same period last year on 4.5% higher revenues.
Inflation is declining gradually moving toward the Fed’s 2% target. On Sept. 27, the Atlanta Fed GDPNow tracker showed the U.S. economy growing at a solid 3.1% in the third quarter after rising 1.4% and 3% in the first two quarters of 2024.
Finally, the Fed’s dot-plot of the last FOMC meeting showed that another 50-basis points rate cut is expected this year. Two more FOMC meetings in November and December are left this year. On Monday, in his speech at the National Association for Business Economics, Fed Chairman Jerome Powell also hinted at more rate cuts this year but at a smaller magnitude depending on economic data.
5 Momentum Stocks to Buy for October
These five stocks have strong potential for October and have seen positive earnings estimate revisions in the last 30 days. Each of the stocks sports a Zacks Rank #1 (Strong Buy) at present and has a Zacks Momentum Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fortinet Inc.
Fortinet is benefiting from rising demand from large enterprise customers and growth in the company's security subscriptions. FTNT is also gaining from the robust growth in Fortinet Security Fabric, cloud and Software-defined Wide Area Network offerings. Higher IT spending on cybersecurity is further expected to aid FTNT in growing faster than the security market.
We expect 2024 net sales to rise 9.9% from 2023. FTNT has a strong balance sheet that bodes well for investors. The focus on enhancing its unified threat management portfolio through product development and acquisitions is a tailwind for the company.
Fortinet has an expected revenue and earnings growth rate of 10.2% and 24.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 30 days.
Barrick Gold Corp.
Barrick Gold is expected to gain from progress in key growth projects that are likely to significantly contribute to its production. GOLD continues to focus on high-return investments, particularly in Nevada, bolstered by successful exploration programs and ongoing project executions. The merger with Randgold also fortified its position in the industry, now owning top-tier assets.
The joint venture with Newmont provides additional upsides. GOLD also has a strong liquidity position and is focused on boosting shareholders’ returns by leveraging solid cash flows. GOLD’s debt-reduction actions are also expected to lower interest expenses. Higher gold prices are also expected to drive the company’s margins and cash flows.
Barrick Gold has an expected revenue and earnings growth rate of 16.1% and 50%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 30 days.
Okta Inc.
Okta operates as an identity partner in the United States and internationally. OKTA offers a suite of products and services used to manage and secure identities, such as Single Sign-On, which enables users to access applications in the cloud or on-premises from various devices.
OKTA’s Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications, and data, while API Access Management enables organizations to secure APIs. Access Gateway enables organizations to extend Workforce Identity Cloud, and Okta Device Access enables end users to securely log in to devices with Okta credentials. OKTA also provides Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization.
Okta has an expected revenue and earnings growth rate of 13.1% and 61.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last seven days.
The Progressive Corp.
The Progressive continues to gain on higher premiums, given its compelling product portfolio, leadership position and strength in both Vehicle and Property businesses. Focus on becoming a one-stop insurance destination, catering to customers opting for a combination of home and auto insurance, augurs well for PGR’s growth.
Policies in force and retention ratio should remain healthy. Competitive pricing to retain current customers and address their needs with new offerings should continue to drive policy life expectancy.
The Progressive has an expected revenue and earnings growth rate of 19.7% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% in the last seven days.
Norwegian Cruise Line Holdings Ltd.
Norwegian Cruise Line 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 NCLH’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.
Norwegian Cruise Line has an expected revenue and earnings growth rate of 9.8% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.1% in the last 60 days.
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The Progressive Corporation (PGR) : Free Stock Analysis Report
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Okta, Inc. (OKTA) : Free Stock Analysis Report