Market Overview

12 Stocks With The Most Earnings Upside Potential

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12 Stocks With The Most Earnings Upside Potential

At the end of the day, a successful business is measured by how much money the company makes. Investors are always looking for the next cash cow in the market. Long-term EPS growth is often very appealing to investors because it suggests potential upside over time.

For stock prices to rise, at least one of the following two phenomena must occur. First, a stock’s price-to-earnings ratio must expand, suggesting investors are willing to pay more for each dollar of earnings. Additionally, if a company grows its EPS over time at a constant earnings multiple, the share price will also get pushed to new highs.

At the present time, the S&P 500’s PE ratio is at around 22.1, well above its long-term average of 15.7 and at nearly its highest level of all time outside of the dot com bubble and the mortgage bubble. That elevated valuation suggests additional earnings multiple expansion may be difficult, and companies may have to grow their way into higher share prices.

EPS Growth Plays

Fortunately, there are plenty of stocks with impressive EPS growth rate projections. Here is a list of the 12 S&P 500 stocks with the highest projected five-year EPS growth rates, according to Finviz.

  1. Everest Re Group Ltd (NYSE: RE), 75.4% EPS growth.
  2. American International Group Inc (NYSE: AIG), 65.9% EPS growth.
  3. Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX), 47.3% EPS growth.
  4. Netflix Inc (NASDAQ: NFLX), 47.3% EPS growth.
  5. Charter Communications Inc (NASDAQ: CHTR), 46.2% EPS growth.
  6. Pioneer Natural Resources (NYSE: PXD), 46.0% EPS growth.
  7. Incyte Corporation (NASDAQ: INCY), 44.6% EPS growth.
  8. Marathon Oil Corporation (NYSE: MRO), 43.2% EPS growth.
  9. National-Oilwell Varco, Inc. (NYSE: NOV), 41.0% EPS growth.
  10. TechnipFMC PLC (NYSE: FTI), 36.6% EPS growth.
  11. Under Armour Inc (NYSE: UA) (NYSE: UAA), 35.9% EPS growth.
  12. Advanced Micro Devices, Inc. (NASDAQ: AMD), 35.8% EPS growth.

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