With recent economic data pointing to sticky inflation, strong consumer spending and a resilient labor market, renewed fears about possible Fed rate hikes are expected to spark massive market volatility in the coming months. next months. Amid a volatile market backdrop, investors might consider buying fundamentally strong Autodesk (ADSK), Forrester Research (FORR) and Bridgestone (BRDCY) stocks with their tax refunds for consistent returns. Keep reading….
While strong labor markets and retail sales indicate resilience in the economy, this will keep inflation high, forcing the Fed to raise rates and keep them higher for longer. This is going to cause the markets to experience significant volatility. Amid this, it might be prudent to buy fundamentally strong Autodesk, Inc. stock (ADSK), Forrester Research, Inc. (FORR), and Bridgestone Corporation (BRDCY) with your tax refund for solid risk-adjusted returns.
After witnessing a slowdown from the 2022 peak, inflation showed signs of rising again this year. The Consumer Price Index (CPI) grew 0.5% month-over-month in January and 6.4% year-over-year, exceeding economists’ expectations of 0.4% and 6.2%, respectively. Eugenio Alemán, chief economist at Raymond James, said: “It is clear that the Federal Reserve has more to do to continue slowing inflation.”
While the strong retail sales and employment numbers for January reflect economic resilience, they will likely underscore the Fed’s determination to continue raising rates to cool demand and control inflation. retail sales increased by 3% in January, the biggest gain in nearly two years. Additionally, the labor market remained strong, with employers adding 517,000 jobs in January, while the unemployment rate fell to 3.4%.
federal minutes warn of more interest rate hikes to reduce inflation to the central bank’s 2% target. Goldman Sachs and Bank of America expect the Fed increase rates three times more this year. Both banks raised their estimates for the federal funds rate to the 5.25%-5.5% range following stronger-than-expected economic data.
While potential interest rate hikes from the Federal Reserve could keep the stock market volatile in the near term, investors shouldn’t shy away from buying quality stocks ADSK, FORR and BRDCY with their tax refunds to ensure a strong risk-adjusted return.
Autodesk, Inc. (ADSK)
ADSK provides 3D design, engineering and entertainment software and services worldwide. The company offers AutoCAD Civil 3D, BIM 360, AutoCAD, and AutoCAD LT, among other software and tools.
On February 23, 2023, Andrew Anagnost, President and CEO of ADSK, said: “As we deliver next-generation technology and services to our customers, the pace of transformation within and between the industries we serve will accelerate, generating great new growth opportunities for Autodesk.”
“We started to see the shift to cloud-connected digital workflows in product design and manufacturing, then architecture, followed by building engineering, and most recently construction. And now we’re seeing growing momentum with the owners,” he added.
For the fourth quarter of fiscal 2023 ended January 31, 2023, ADSK’s total net revenues increased 8.8% year-over-year to $1.32 billion, and its gross profit grew 8.6% year-over-year to $1.19 billion. Non-GAAP income from the company’s operations was $479 million, an increase of 13.8% year-over-year.
In addition, the company’s non-GAAP net income per share was $1.86, up 24% from the prior year. Its free cash flow increased 26.1% over the prior year value to $903 million.
Analysts expect ADSK’s EPS and revenue for the fiscal year (ending January 2024) to rise 9.4% and 8.4% year-over-year to $7.26bn and $5.43bn, respectively. The company has an impressive track record of earnings surprises, beating consensus EPS estimates in three of the past four quarters.
Additionally, the company’s earnings per share and revenue for the upcoming fiscal year (ending January 2025) are expected to grow 15.8% and 12% over the prior year to $8.4 billion and $6.08 billion, respectively. . ADSK shares have gained 7.2% in the past nine months to close the latest trading session at $192.53.
ADSK POWR Ratings reflect this positive outlook. The stock has an overall rating of B, which translates to Buy on our proprietary rating system. POWR scores are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ADSK is ranked 12th out of 137 shares in the software application industry. It has an A rating for Quality and a B for Growth.
We have also given ADSK ratings for Feel, Value, Drive and Stability. Get all ADSK ratings here.
Forrester Research, Inc. (FORR)
FORR is an independent research and advisory firm. Its segments include Research; Consultant; and Events. The company offers content such as future trends, predictions and market forecasts. It also provides consulting services, including strategy design, business case creation, and technology vendor selection.
On January 23, 2023, FORR introduced Forrester Decisions for Partner Ecosystem Marketing, the next generation of the Forrester Decisions for Channel Marketing service. The Partner Ecosystem Marketing service would help marketing leaders develop, enable and engage their partners to drive revenue growth and foster customer loyalty. This launch must strategically benefit the company.
For the fourth quarter ended December 31, 2022, FORR revenue from the Research and Events segment increased 3% and 43.2% over prior year values to $92.19 million and $7.19 billion, respectively. Additionally, total company revenue grew 2.4% year-over-year to $136.89 million.
In addition, as of December 31, 2022, the company’s outstanding debt was $50 million, compared to $75 million as of December 31, 2021.
The consensus revenue estimate of $556.91 million for the fiscal year ending December 2024 indicates a year-over-year improvement of 5.4%. Likewise, the EPS consensus estimate of $2.67 for the same year reflects an increase of 14.1% over the prior year. Also, the company beat its consensus EPS in the four subsequent quarters, which is impressive.
The stock has declined 5.6% in the past three months to close the latest trading session at $33.37.
FORR’s POWR ratings reflect its promising outlook. The stock has an overall rating of A, which equates to a Strong Buy on our proprietary rating system.
The stock has a quality grade of A and a value grade of B. It has exceeded 106-stock Financial Services (Company) industry.
Beyond what we said above, we also have FORR ratings for Stability, Growth, Sentiment, and Momentum. Get all FORR ratings here.
Bridgestone Corporation (BRDCY)
Headquartered in Tokyo, Japan, BRDCY primarily manufactures and sells tires and rubber products throughout the world. The company operates through two segments, Tires and Diversified Products.
On December 19, 2022, Thai Bridgestone Co., Ltd. (TBSC), a subsidiary of BRDCY, announced that it had installed rooftop solar panels to directly power the tire production process at its Nong Khae plant in the province. from Saraburi. The company’s largest solar rooftop panel, with a total capacity of 9.95 MWp, is expected to reduce 97,500 tons in total CO2 emissions over the next 15 years.
Also, on November 18, BRDCY announced an investment of approximately $190 million to renovate and expand its tire manufacturing plant located in Heredia, Costa Rica. This investment would help the company to expand its facilities, increase its production capacity up to 36% by 2026 and add more than 160 new permanent jobs.
BRDCY’s revenue increased 26.6% year-over-year to ¥4.11 trillion ($30.11 billion) for the fiscal year ending December 31, 2022. The company’s gross profit increased 21% year-over-year to ¥1.59 trillion ($11.65 billion). Its adjusted operating profit grew 22.4% year-over-year to 482.6 billion yen ($3.54 billion), while its pre-tax profit was 423.5 billion yen ($3.1 billion), up 12 2% more than the previous year.
Analysts expect BRDCY’s revenue and earnings per share for the fiscal year (ending December 31, 2023) to increase 322.9% and 21.87% year-over-year to $31.01 billion and $1 .82, respectively. In addition, the company’s fiscal 2024 revenue and earnings per share are expected to grow 2.6% and 8.4% year-over-year to $31.82 billion and $1.97, respectively.
The stock has gained 2.2% over the past month to close the latest trading session at $18.97.
BRDCY’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of A, which equates to a Strong Buy on our proprietary rating system. It also has an A rating for Stability and Quality and a B for Growth.
BRDCY is ranked number 3 out of 61 shares in the A rating auto parts industry. Click here for additional BRDCY Drive, Courage, and Sentiment ratings.
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ADSK shares were unchanged in premarket trading on Monday. So far this year, ADSK has gained 3.03%, versus a 3.65% rise in the benchmark S&P 500 index over the same period.
About the author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet seeks to help retail investors understand underlying factors before making investment decisions.
The charge 3 Great Stocks to Buy When Your Tax Refund Arrives first appeared in stocknews.com