Earning season continues as 2023 kicks off and top-rated stocks from a variety of industries will report. Zacks Investment Research shared in Yahoo Finance its top 3 stocks to consider buying in 2023:
Expedia Group (EXPE)
Expedia appears to be on track for continued growth, and rising earnings estimate revisions for FY23 suggest that the company may provide an uptrend and positive direction.
Expedia’s Q4 earnings are expected to catapult at $1.85 per share, a 74% increase from Q4 2021. Earnings are expected to rise 350% to $7.44 per share in 2022, up from $1.65 in fiscal 2021. This 2023, earnings are projected to rise 24% to $9.21 per share.
It is note-taking that Expedia stock is now up by 36% year to date and trades at only 16.5X forward earnings. This is 56% lower than its decade-long high of 38X and a 21% discount to the median of 21X, implying that Expedia stock still has room to grow.
Lyft’s stock looks very appealing at around $17 per share, with Uber stock at $33 per share. While the traditional valuation metric cannot be applied to Lyft or Uber stock yet, investor must consider that Lyft’s price to sales is more appealing at 1.2X vs. Uber’s 1.8X and is also significantly lower than the S&P 500’s 3.5X.
Finally, upbeat Q4 earnings could fuel Lyft’s stock, which has now rallied 83% from its December 2022 lows, with shares up 62% Year to Date, crushing the broader indexes’ strong start in this year’s first quarter.
Ralph Lauren (RL)
Ralph Lauren’s stock trading at a discount from its previous year’s valuation, strong earnings would be an excellent catalyst and could lead to even more uptrend. Ralph Lauren shares have risen 14% this year, outperforming the S&P 500’s +7% gain. With its stock trading at 15.6X forward earnings, well below its decade-long high of 242.3X and 10% below the median of 17.4X, no wonder it made it to the top three stocks to buy in 2023.
On top of the strong performances in 2023, these three stocks provide diversification in investment portfolios across multiple industries. The possibility of exceeding earnings expectations is very likely which make them more appealing, as strong earnings could act as a further catalyst for Expedia, Lyft, and Ralph Lauren stocks.