Three Strong Conviction Buys for the Week Ahead

In the ever-shifting landscape of the stock market, separating the wheat from the chaff is no easy feat. It’s a world where the wrong picks can erode your hard-earned gains, but the right ones? They have the power to catapult your portfolio to new heights. With thousands of stocks in the fray, pinpointing those poised for a breakthrough can feel like searching for a needle in a haystack.

This is where we step in. Every week, we comb through the market, scrutinizing trends, earnings reports, and industry shifts. Our goal? To distill this vast universe of stocks down to a select few – those unique opportunities that are primed for significant movement in the near future.

This week, we’ve zeroed in on three standout stocks. Trust us, this is one reveal you don’t want to miss.

Mastercard (MA) – Strong Earnings Prospect This Week

As we approach one of the busiest weeks of the earnings season, the financial landscape looks promising. With over 160 S&P 500 companies slated to report results—nearly one-third of the index and including six Dow Jones Industrial Average constituents—the first quarter earnings season is hitting its stride. Notably, performance has been encouraging so far: according to FactSet, 77% of reporting companies have surpassed analyst earnings estimates, and 60% have exceeded revenue expectations as of last Friday.

In this optimistic setting, Mastercard stands out as a particularly noteworthy stock. The credit card giant has seen its earnings estimates increase by 12% over the past three months, with a six-month rise of 20%. Such adjustments point to strong confidence in its operational success and financial health.

Adding to the positive sentiment, Mastercard was recently initiated with a buy rating by TD Cowen. Analyst Bryan Bergin set a price target of $545, indicating an anticipated 18% rally. This aligns well with the average analyst price targets, which also suggest substantial potential for price appreciation.

Shares of Mastercard have risen 8% this year, reflecting robust market confidence ahead of its upcoming earnings release, scheduled before Wednesday’s market open. Given the current upbeat market environment and Mastercard’s promising outlook, it’s a stock to watch closely in this dynamic earnings season.

Duke Energy (NYSE:DUK) – A Steady Player in a Volatile Market

Utility stocks often shine as beacons of stability, especially in uncertain economic times marked by challenges like inflation and high interest rates. Duke Energy, a powerhouse in the regulated electric sector, is no exception. With its expansive operations across the Carolinas, Florida, and the Midwest, Duke not only generates electricity using traditional sources like coal and natural gas but also taps into renewable energies such as solar and wind.

While Duke’s shares may not be the cheapest in the utility sector, trading at 18.5X trailing-year earnings and 2.63X trailing-year revenue, the company stands out for its robust forward annual dividend yield of 4.14%. This yield, combined with Duke’s strategic position in regions attracting young workers due to lower living costs, positions it as an attractive investment.

Looking forward, analysts project Duke’s earnings per share will climb to $5.97 for the current fiscal year, up from $5.56 the previous year. Sales are also expected to rise by 3.6% to $30.12 billion. These figures underscore Duke’s consistent performance and potential for steady growth, making it a compelling pick for investors seeking reliability amidst market fluctuations.

Lithium Americas (NYSE:LAC) – Poised for Growth in the EV Battery Sector

Battery stocks have faced downward pressure in recent quarters due to macroeconomic challenges and slower-than-expected EV adoption rates. However, the long-term outlook remains positive, presenting a prime opportunity to invest in potential high-growth battery stocks. The EV battery market, valued at $63.51 billion in 2023, is projected to explode to $573.08 billion by 2033, suggesting a ninefold increase over the next decade.

Among the promising names in this sector is Lithium Americas, a company that stands out for its significant undervaluation and strong future prospects. The company’s Thacker Pass asset, with an impressive mine life of 40 years and an after-tax net present value of $5.7 billion, is expected to become a major cash flow contributor once it reaches full production. With projected annual EBITDA of $2 billion post both phases of development, the financial outlook is robust.Furthermore, Lithium Americas has recently secured substantial financial backing, including a $2.26 billion loan from the U.S. Department of Energy and a $275 million equity offering, ensuring that financing for construction at the Thacker Pass asset is well in place. As the demand for lithium is expected to soar, driven by a compound annual growth rate of 30% from 2022 to 2030 and an anticipated acute supply gap, LAC’s stock is well-positioned for potential multibagger returns. Now is an opportune time to consider adding Lithium Americas to your investment portfolio, especially as lithium prices are projected to rise, likely boosting LAC’s stock value significantly.