Are These The Best Cyclical Stocks To Buy Right Now?
Amidst the current mentions about the Federal Reserve potentially reeling back its stimulus package, cyclical stocks could be worth watching. After all, the Fed has and continues to note the surprising strength in the economy, similarly reflected in the stock market. At the same time, there are also other factors such as inflation and an improving U.S job market adding to the narrative as well. Sure, while the Fed decelerates its bond buyback program, stocks could decline in the short to mid-term. However, it would also signal that the economy is on the road to recovery. Pair all of this with the current momentum in consumer spending and the case for cyclical stocks continues to grow.
Evidently, we could take a look at how the two core cyclical industries are doing now. On one hand, you have consumer discretionaries such as Nike (NYSE: NKE). Now, Nike would stand to benefit from the current uptick in the economy. In fact, the company appears to be gearing up for the busy holiday shopping season ahead. As of today, the company is deepening its current partnership with Dick’s Sporting Goods (NYSE: DKS). In detail, Nike’s loyalty program will reportedly link to Dick’s membership offerings. Simply put, this allows consumers to purchase exclusive Nike shoes via Dick’s website.
On the other hand, industrials like Caterpillar (NYSE: CAT) also continue to thrive in the current economy. With the rise in demand for construction services, Caterpillar’s construction machinery offerings remain hot as ever. So much so that the company smashed analyst estimates in its quarterly earnings call last week. Notably, Caterpillar posted an earnings per share of $2.66 versus projections of $2.20. With all that said, here are three top cyclical stocks to know in the stock market today.
Top Cyclical Stocks To Watch This Month
- T-Mobile US Inc. (NASDAQ: TMUS)
- Lyft Inc. (NASDAQ: LYFT)
- Estee Lauder Companies Inc. (NYSE: EL)
T-Mobile US Inc.
Right off the bat, we will be taking a look at T-Mobile. For some context, it is a leading name in the consumer telecommunications industry today. Through its nationwide 5G network, T-Mobile brings fast and reliable wireless connectivity services to U.S. consumers. In a quarter where consumers could be keen on upgrading to the latest 5G devices, T-Mobile’s services remain relevant. With the addition of 5G into the company’s latest connectivity offerings, T-Mobile could be looking at another busy quarter ahead.
As it stands, TMUS stock currently trades at $122.98 a share as of 10:45 a.m. ET. This would be after gaining by over 5% since today’s opening bell. Accordingly, the reason for this surge could be thanks to the company’s latest quarterly financials posted earlier today. To highlight, T-Mobile reported an earnings per share of $0.55 on revenue of $19.62 billion for the quarter. The company topped Wall Street’s estimates in terms of earnings per share. Additionally, T-Mobile also added a whopping 673,000 new subscribers throughout the quarter.
The company cites continued strength across its core markets and solid customer growth as key contributors to this quarter’s performance. As a result of all this, T-Mobile is also raising its 2021 guidance across the board. With T-Mobile seemingly firing on all cylinders, could TMUS stock be a top watch in the stock market now?
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Lyft Inc.
Another name to consider among cyclicals in the reopening trade now would be Lyft. To begin with, the company boasts one of the largest transportation networks spanning the U.S. and Canada. Through its flagship transportation-as-a-service model, Lyft continues to cater to consumers today. This would especially be the case as vaccination rates rise and more in-person forms of entertainment reopen. With LYFT stock trading at $48.62 a share as of 10:45 a.m. ET, could it be worth investing in now?
Well, for one thing, the company’s shares are now up by over 10% as of today’s opening bell. Similar to our previous entry, this would be thanks to Lyft posting solid figures across the board in its latest quarterly earnings call. Impressively, the company posted an earnings per share of 5 cents versus an expected loss of 3 cents per share. Not to mention, the company also hit a record Revenue Per Active Rider for the quarter, citing rising ride frequency. This alongside a driver supply increase of 45% year-over-year would explain the current strength in Lyft’s business.
By and large, CFO Brian Roberts notes that Lyft is building its drivers pool while also weathering supply tailwinds well. Accordingly, Roberts believes that Lyft’s service levels “will naturally improve in Q4 and lead to lower prices”. In theory, this would serve to further incentivize the use of Lyft’s services during the year-end season. All things considered, will you be keeping an eye on LYFT stock?
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Estee Lauder Companies Inc.
Following that, we have Estee Lauder (EL). In brief, it is a multinational manufacturer and marketer of cosmetic products. This includes but is not limited to skincare, makeup, fragrance, and hair care wares. For a sense of scale, the company’s portfolio of brands is present in over 150 countries and territories worldwide. Given the viability of its offerings as presents during the current shopping season, EL stock could be in focus.
For starters, EL stock is now trading at $334.05 as of 10:45 a.m. ET. This would be after gaining by over 115% since its pandemic era low. In its first-quarter report yesterday, the company saw an earnings per share of $1.86 on revenue of $4.39 billion. This well exceeded analysts’ forecasts of $1.70 and $4.25 billion respectively. EL also saw net sales gain year-over-year across its product categories and in every region it is present in.
Overall, CEO Fabrizio Freda notes that EL delivered outstanding results throughout its fiscal 2021 and continues to do so this quarter. Freda also points out that “both sales and profitability meaningfully exceeded fiscal 2019 performance”. This would suggest that EL is already performing above pre-pandemic levels. As such, could EL stock be a top watch for you in the stock market this week?
