CBOE Volatility Index’s 52.7% year-to-date gains indicate significant investor concerns. Owing to a double whammy of record-high inflation and consecutive rate hikes, the market turbulence could persist longer than expected.
Although the Fed’s hawkish stance is expected to slow the U.S. economy, Goldman Sachs believes the economy might be able to avoid a dreaded recession.
The market sell-off has led several fundamentally solid large-cap stocks to plunge in price and trade well below their intrinsic values.
However, given their robust financials and pricing power, these stocks are expected to bounce back soon.
We believe fundamentally sound large-cap stocks, Broadcom Inc. (AVGO), Abbott Laboratories (ABT), IQVIA Holdings Inc. (IQV), Agilent Technologies, Inc. (A), and QUALCOMM Incorporated (QCOM), which have plummeted in price this year, are well poised for a rebound.
Broadcom Inc. (AVGO)
AVGO designs, develops, and supplies various semiconductor devices focussing on complex digital and mixed-signal complementary metal oxide semiconductor-based devices and analog III-V-based products.
The company has two segments- Semiconductor Solutions and Infrastructure Software. Its market capitalization is $234.39 billion.
On May 26, 2022, Hock Tan, AVGO’s President and CEO, said, “Broadcom’s second quarter revenue accelerated sequentially and was driven by strength in networking and server storage. We expect this momentum to continue into the third quarter.”
Also, AVGO declared that it would acquire all of the outstanding shares of VMware, Inc. (VMW), a leading innovator in enterprise software, which is expected to boost its operational capability.
AVGO’s non-GAAP net revenue increased 22.6% year-over-year to $8.10 billion for the second quarter ended May 1, 2022.
Its non-GAAP net income came in at $4 billion, up 34.2% year-over-year, while its non-GAAP EPS came in at $9.07, up 37% year-over-year. Also, its adjusted EBITDA came in at $5.11 billion, up 29.1% year-over-year.
For fiscal 2022, analysts expect AVGO’s revenue to be $32.88 billion, representing a 19.8% year-over-year rise.
In addition, the company’s EPS is expected to increase 31.9% year-over-year to $36.95 in 2022.
Also, it surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has lost 16.4% year-to-date to close yesterday’s trading session at $556.22.
AVGO’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Also, the stock has an A grade for Growth and Quality and a B for Sentiment.
Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #8 out of 95 stocks.
Click here for the additional POWR Ratings for Value, Momentum, and Stability for AVGO.
Abbott Laboratories (ABT)
ABT and its subsidiaries discover, develop, manufacture, and sell health care products worldwide.
It operates in four segments: Established Pharmaceutical Products; Diagnostic Products; Nutritional Products; and Medical Devices. Its market capitalization is $197.35 billion.
On June 3, 2022, ABT’s new biowearable device for monitoring glucose and ketone levels in a single sensor achieved breakthrough device designation from the U.S. Food and Drug Administration.
Amid rapidly surging diabetes patients around the globe, this innovation marks a revolutionary chapter in diabetes treatment and therapy.
ABT’s net sales came in at $11.89 billion for the first quarter ended March 31, 2022, up 13.8% year-over-year. The company’s net earnings came in at $2.45 billion, up 36.5% year-over-year. Also, its EPS came in at $1.37, up 37% year-over-year.
For the quarter ended June 2022, analysts expect ABT’s revenue to increase 5.7% year-over-year to $10.25 billion. Its EPS is estimated to grow 11.3% per annum for the next five years.
It surpassed EPS estimates in each of the trailing four quarters. The stock has lost 19.9% year-to-date to close yesterday’s trading session at $112.71.
ABT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which indicates a Strong Buy in our proprietary rating system.
ABT has an A grade for Growth and a B grade for Stability, Sentiment, and Quality.
Within the Medical - Devices & Equipment industry, it is ranked #2 out of 149 stocks.
Click here for the additional POWR Ratings for Value and Momentum for ABT.
IQVIA Holdings Inc. (IQV)
IQV provides advanced analytics, technology solutions, and clinical research services to the life sciences industry in the Americas, Europe, Africa, and the Asia-Pacific.
It operates through three segments: Technology & Analytics Solutions; Research & Development Solutions; and Contract Sales & Medical Solutions. Its market capitalization is $41.36 billion.
On April 27, 2022, Ari Bousbib, IQV’s chairman and CEO, said, “We remain confident in our ability to deliver our growth targets for 2022 and beyond as the backdrop for the industry continues to be very strong, with our RFP dollar volume up 13 percent year-over-year.”
IQV’s revenues increased 4.7% year-over-year to $3.57 billion for the first quarter ended March 31, 2022.
The company’s adjusted net income came in at $477 million, up 12.2% year-over-year, while its adjusted EPS came in at $2.47, up 13.3% year-over-year.
Analysts expect IQV’s revenue to increase 10% year-over-year to $16.07 billion in 2023. In addition, its EPS is expected to grow 15.3% per annum over the next five years.
It surpassed EPS estimates in each of the trailing four quarters. The stock has lost 23.2% year-to-date to close yesterday’s trading session at $216.65.
According to our POWR Ratings, IQV has an A grade for Growth and a B grade for Sentiment.
Within the Medical - Diagnostics/Research industry, it is ranked #15 out of 53 stocks.
Click here to see the additional POWR Ratings for Value, Momentum, Stability, and Quality for IQV.
Agilent Technologies, Inc. (A)
A provides application-focused solutions to the life sciences, diagnostics, and applied chemical markets worldwide.
Its segments are Life Sciences and Applied Markets; Diagnostics and Genomics; and Agilent CrossLab. Its market capitalization is $37.08 billion.
On June 7, 2022, A announced its collaboration with Amazon Web Services and NVIDIA Corporation’s (NVDA) technologies.
This partnership aims to execute time and cost-efficient genomic discoveries using secure and advanced cloud technology. This should be strategically beneficial for A.
A’s net revenue came in at $1.61 billion for the second quarter ended April 30, 2022, up 5.4% year-over-year. Its non-GAAP net income came in at $340 million, up 13.7% year-over-year.
Moreover, its non-GAAP EPS came in at $1.13, up 16.5% year-over-year.
A’s revenue is expected to grow 12.4% year-over-year to $6.26 billion in 2022, while its EPS is also expected to grow 19.6% to $4.58. It surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock has lost 22.2% year-to-date to close yesterday’s trading session at $124.14.
A has an overall A rating, equating to a Strong Buy in our proprietary rating system. In addition, it has a B grade for Growth, Value, Sentiment, and Quality.
A is ranked #3 out of 53 stocks in the Medical - Diagnostics/Research industry.
Click here to see the additional POWR Ratings for A (Momentum and Stability).
QUALCOMM Incorporated (QCOM)
QCOM engages in developing and commercializing foundational technologies for the wireless industry worldwide.
The company operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). Its market capitalization is $153.12 billion.
On June 9, 2022, QCOM announced a next-generation powerline communication (PLC) device, the QCA7006AQ- for electric vehicle (EV) charging station communications.
This new product concerning the emerging EV industry is expected to bring about solid growth in the near term.
QCOM’s non-GAAP revenues came in at $11.16 billion, up 40.8% year-over-year for its second quarter ended March 27, 2022.
Its non-GAAP net income came in at $3.66 billion, up 67.6% year-over-year. Also, its non-GAAP EPS came in at $3.21, up 68.9% year-over-year.
Analysts expect QCOM’s revenue to increase 33.4% year-over-year in fiscal 2022 to $44.66 billion. Its EPS is expected to increase 46.8% from the year-ago value to $12.54 in 2022.
The stock surpassed its EPS estimates in each of the trailing four quarters. QCOM shares have lost 25.2% year-to-date to close yesterday’s trading session at $136.71.
QCOM's overall A rating equates to a Strong Buy in our POWR Ratings system. Also, the stock has a B grade for Growth, Value, Sentiment, and Quality.
Within the B-rated Semiconductor & Wireless Chip industry, it is ranked #6 out of 95 stocks.
Click here for the additional POWR Ratings for Momentum and Stability for QCOM.
AVGO shares rose $1.50 (+0.28%) in after-hours trading Friday. Year-to-date, AVGO has declined -18.11%, versus a -17.67% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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