Thanksgiving is here, marking the start of the 2024 holiday season – and what better time to get your stock portfolio in order for the year ahead?
Investors enter the market for all kinds of reasons and bring their own skills and opinions, but the end goal is always the same: generate returns and make a profit.
That requires good stock selection, and the Smart Score tool is available to make that process smooth. The Smart Score is a data collection and sorting tool developed by TipRanks to use AI and natural language processing to collect and sort the data generated by the stock market – all data compiled by thousands of traders trading in thousands of stocks , for tens of millions of daily transactions.
The Smart Score uses this data to rate each stock based on a range of factors that have been proven to be good predictors of future outperformance. Each stock is given a simple score, on a scale of 1 to 10, with the ‘Perfect 10’ indicating stocks that certainly deserve the attention of a discerning stock picker.
So let’s make good use of the Smart Score and take a look at the two top-grossing stocks to watch as 2024 draws to a close.
Delta Airlines (VALLEY)
We start in the aviation sector. Delta Airlines is the largest player in the sector with a market capitalization of over $41 billion. The company employs 100,000 people and oversees a network from its headquarters and hub in Atlanta that includes more than 4,000 daily flights to 280 destinations around the world. Delta connects major regional and international hubs such as Boston, New York, LA, Mexico City, Seoul-Inchon, Tokyo, London and Amsterdam.
Delta operates a fleet of nearly 1,000 aircraft (992 as of November 25 this year) on its routes, including some of the largest and smallest commercial passenger aircraft in the airline industry. The company has a history of favoring Boeing jets, but has increased the number of Airbus liners in its fleet in recent years. In the last reported quarter, 3Q24, Delta took delivery of 27 new aircraft. In addition, the company announced that by 2025 it will offer more than 700 weekly flights to more than 33 destinations and open 7 new routes.
That said, when we look at last quarter’s financial results, we see that Delta missed both the top and bottom line. Revenue came in at $14.59 billion, relatively flat year-over-year and $700 million below forecast. In the end, Delta’s non-GAAP earnings per share came in at $1.50, missing estimates by a nickel. On a more positive note, Delta had operating cash flow of $1.3 billion in the quarter, and quarterly free cash flow of $95 million contributed to this year’s FCF total of $2.7 billion.
This stock has caught the attention of Morgan Stanley’s Ravi Shanker, an expert on the aviation sector, who sees a lot of potential here for investors, especially in terms of long-term free cash flow.
Following the third quarter results and recent Investor Day, Shanker wrote: “We believe the stock still has a long way to go. While the LT EPS guide came in modestly below the Street and comfortably below MSe, we view this guide as extremely conservative… The stock… is still very attractively valued relative to history, at ~8x our 2025 EPS While some investors may not have received the fireworks they were looking for (i.e. a detailed loyalty announcement or a major buyback announcement), the fact is that DAL expects more than 1/3 of that in the next three years. its market capitalization in free cash flow (potentially up to 40%) should attract long-only investors to the story regardless, whether through deleveraging or buybacks (or ultimately both).
For Shanker, this view equates to an Overweight (i.e. Buy) rating for DAL, with a $100 price target to allow room for a 57% one-year upside. (To view Shanker’s track record, click here)
Delta’s stock has a Strong Buy consensus rating, based on 18 unanimous positive Wall Street reviews in recent weeks. The shares are trading for $63.62 and their average price target of $75.19 suggests a one-year upside of 18%. (To see DAL stock forecast)
Trimble (TRMB)
Next on our list of Perfect 10s is Trimble, a technology company with a niche in high-tech manufacturing processes. That’s not as redundant as it sounds – what Trimble does is provide specialist technology services, in areas such as inertial navigation, aerial drones, laser ranging and even global navigation satellite systems. The company’s products and services can be found in everything from agriculture to the utilities sector, with the construction, government and transportation sectors in between. In addition, Trimble also offers software platforms and services to bring it all together, in a unified package designed to bring out the best of modern manufacturing.
Trimble’s history is in high-tech hardware, but the company has shifted its emphasis to software, data analytics and AI. The company offers several product suites designed to provide solutions for specific industries. These include the Construction One suite, designed to simplify construction technology projects with an emphasis on time and budget; the Unity suite, designed to centralize data and workflows for better results and lower cost of ownership; and the TMW.Suite, to merge operational, administrative and safety tools into a single solution in the transportation sector. The company also uses AI technology in its software systems to generate the best results from data analysis and reporting.
The company’s recent Q3 24 results were seen as strong – with shares rising nearly 18% after the release. The company’s revenue was $875.8 million. Although down 8.5% year over year, it exceeded forecast by more than $11 million. Ultimately, Trimble’s earnings came in at 70 cents per share by non-GAAP measures, beating expectations by 8 cents per share. Looking ahead, the company upgraded its full-year revenue guidance to a range of $3.625 billion to $3.665 billion, better than the $3.63 billion expected on Wall Street.
For five-star Goldman Sachs analyst Jerry Revich, this stock simply offers a solid prospect for further gains – and it’s getting his full attention. Revich says: “We maintain our Buy rating on the stock as we see room for sustained subscription adoption across TRMB’s software portfolio, and as a result, continued strong growth for the companies with the company’s highest multiples and margins… We note that TRMB has consistently beaten the high-end. of the EPS guidelines of the past three years…’
Along with that buy rating, Revich puts an $87.40 price target on TRMB stock, showing his confidence in a potential one-year gain of 20.5%. (To view Revich’s track record, click here)
The Strong Buy consensus rating for Trimble’s stock is based on 5 recent analyst ratings, including 4 for Buy and 1 for Hold. The shares have a current trading price of $72.43 and their average price target of $79.88 implies a 10% upside for the coming year. (To see TRMB stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important to do your own analysis before making an investment.
