Costco & 2 Earnings Acceleration Stocks to Watch for Upside
Zacks analysis highlights three stocks with accelerating earnings growth: Costco (COST), Cummins (CMI), and Kennametal (KMT). Accelerating EPS growth is historically a precursor to stronger stock performance.
A Zacks analysis highlighted Costco (COST), Cummins (CMI), and Kennametal (KMT) for their accelerating earnings growth, a trend that often precedes stronger stock performance.
What is Earnings Acceleration?
Earnings acceleration refers to a consistent increase in the earnings per share (EPS) growth rate over recent quarters. For example, if EPS grows 10% in Q1, 15% in Q2, and 20% in Q3, that's acceleration.
The Three Stocks
Costco (COST)
Costco is a major US retailer operating a membership model. Its earnings acceleration is driven by strong same-store sales growth and rising membership numbers.
Cummins (CMI)
Cummins is a diesel engine manufacturer. It benefited from increased demand for trucks and heavy equipment.
Kennametal (KMT)
Kennametal is a technology company specializing in HVAC systems. Demand for energy-efficient solutions boosted its earnings.
What This Means for Investors
Research shows that stocks with accelerating earnings tend to outperform the market. However, investors should evaluate each company's fundamentals and industry conditions before making decisions.
Frequently Asked Questions
Found this useful? Share it