It’s never too late for a comeback.
Some stocks have languished and underperformed for years only to bounce back on evidence that business is back on track and financial results are improving. As Q3 earnings have poured in, several companies that had largely been written off or ignored by investors have surprised to the upside.
And in turn, it’s sent their stocks trending higher after a prolonged slump. This presents an encouraging opportunity. Investors can buy beaten down stocks as their fortunes reverse and ride the share price higher to big gains. Get ready for a bullish run with these three stocks ready to rebound.
Toyota Motor Corp. (TM)
Japanese vehicle manufacturer Toyota Motor Corp. (NYSE:TM) just blew the roof off with its financial results, raising its full-year guidance. Reporting its fiscal Q2 profit, it more than doubled from a year earlier.
The world’s best-selling automaker reported a record operating profit of 1.44 trillion yen (US$9.5 billion) for the three months ended Sept. 30. That was up 155% from the same period of 2022. TM said the impressive results were due to strong global sales and a weaker yen vis-à-vis the U.S. dollar and other currencies.
Also, Toyota continues to gain traction from its electric vehicle (EV) strategy. That focus is on improving battery life and driving range. Also, it’s reducing the cost of EVs, which remain a barrier for many consumers. As the company implements its EV plan, it benefits from strong sales of its gas-electric hybrid vehicles, which tend to be cheaper than EVs.
Toyota reported that sales of its hybrid vehicles rose 41% to 888,000 units in the most recent quarter. Along with its latest financial results, Toyota said that it plans to boost investment by $8 billion. Its North Carolina plant will make batteries for hybrids and fully electric vehicles .
Looking ahead, Toyota raised its full-year profit forecast to 4.5 trillion yen from 3 trillion yen previously. The new outlook is ahead of analysts’ average forecast of 4.0 trillion yen. TM stock rose 5% on the latest earnings report and is up 33% year to date (YTD).
Thomson Reuters (TRI)
Media company Thomson Reuters (NYSE:TRI) continues to report healthy financials. Also, it is pushing further into artificial intelligence (AI). The company that operates the Reuters News Agency most recently announced Q3 earnings per share (EPS) of 82 cents. Analysts’ forecasts were only 71 cents.
Revenue in the period climbed 1% higher to $1.59 billion, which was slightly below forecasts of $1.61 billion. Thomson Reuters, also owning Westlaw legal database and Checkpoint tax firm, said organic revenue increased 7% from a year earlier.
The company’s news division led the Q3 growth with revenues up 3% driven by contractual price increases and a rise in digital advertising. However, Thomson Reuters’ future growth is likely to come from AI, its strategic priority. The company has announced plans to spend $10 billion on acquisitions and investments to bolster its AI capabilities.
During the third quarter, Thomson Reuters finalized its $650 million acquisition of Casetext, an AI company that helps legal professionals conduct research and analysis. TRI stock has increased 1% in 2023 but is up 130% over five years.
AT&T (T)
The telecommunications giant AT&T’s (NYSE:T) share price has risen 6% since it reported in mid-October Q3 earnings beat, raising its outlook for the rest of this year. AT&T announced EPS of 64 cents, which edged past forecasts of 62 cents. Revenue in Q3 rose 1% from a year earlier to $30.40 billion. Analysts had predicted sales of $30.20 billion for the July through September period.
Also, the wireless internet provider is lifting its guidance for free cash flow for 2023’s remainder. It now anticipates $16.5 billion, up from previous estimates of $16 billion. The company adds that its broadband revenue should grow 7% or better this year.
Analysts applauded the upward revisions, as well as encouraging news that net additions of wireless postpaid phone subscribers totaled 468,000 in Q3. And, net adds for consumer wireline fibre optic service was 296,000. Both numbers topped expectations. T stock is down 16% this year, but a rebound looks to be in the cards for this company.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
