The broad market pullback continues, so traders are focused on finding stocks that are trading at attractive levels.
While the market is worried about rising rates and the potential slowdown of the economy, analyst estimates for some industrial stocks have started to move higher.
Rising analyst estimates could provide more support to the shares of FedEx and Cummins.
S&P 500 continues to move lower, and traders are searching for value stocks which could protect them from broad market sell-off. While many tech stocks remain rather expensive despite the recent pullback, some industrial stocks are valued at less that 10 forward P/E.
FedEx stock has been moving lower since June 2021, and the stock has reached attractive valuation levels. Analysts expect that the company will report earnings of $20.62 per share in the current year and earnings of $22.62 per share in the next year, so the stock is trading at 9 forward P/E.
It should be noted that analyst estimates have started to move higher in recent weeks, which could provide more support to FedEx stock. The current attractive valuation may serve as the main positive catalyst for FedEx shares as traders are moving away from high-PE names in the rising interest rate environment.
Cummins stock has been trending lower since February as worries about the health of the global economy have put pressure on earnings estimates for one of the leading engine producers.
However, earnings estimates have recently started to move higher. Currently, the company is expected to report earnings of $17.65 per share this year and earnings of $20.21 per share in the next year, so the stock is trading at less than 10 forward P/E, which is cheap for the current market environment.
Cummins has recently released its first-quarter report, easily beating analyst estimates on both earnings and revenue. The stock quickly found itself under pressure due to general market weakness, but attractive valuation and recent improvement in analyst estimates may provide enough support to Cummins shares near current levels.
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This article was originally posted on FX Empire