The third quarter is shaping into a pivotal period for the stock market. Economic indicators suggest a potential upswing, with inflation slowly coming down to the Fed’s 2% target range.
This makes the case for stocks set to surge as a myriad of companies stand out to emerge as potential winners. Amidst all the uncertainty, certain companies can significantly outperform the broader market. These outliers have demonstrated robust financial performance in the last year. Positive tailwinds in the economy also support its growth in the second half of 2024. While the market is always fraught with uncertainty, these three companies have the potential to weather the storm and surge ahead.
Let’s unpack the top three stocks set to surge higher in Q3 2024.
TJX Companies (TJX)
TJX Companies (NYSE:TJX), a leading discount apparel and home goods retailer, has carved a retail niche. It operates several well-known brands, including T.J. Maxx, Marshalls, HomeGoods, Sierra and Winners. This has allowed it to cater to a broad demographic, leading to strong revenue and earnings growth.
One of the critical drivers behind TJX’s expected surge is its ability to adapt to changing consumer preferences. With inflationary pressures and economic uncertainties, more consumers will likely seek value-oriented shopping experiences. That is the nature of this company’s brand, and its financial performance has been strong despite various headwinds in the economy. Growth continues to accelerate after reporting record revenue, earnings and free cash flow in the 2024 fiscal year. In Q1 FY25, revenue increased 6% year over year to $12.48 billion. Moreover, earnings per share rose 22% yearly to 93 cents per share, with comparable store sales up 3% from the previous year. TJX has emerged stronger than ever after the pandemic, placing it among the top stocks set to surge higher in Q3 2024.
Waste Management (WM)
Waste Management (NYSE:WM), a leader in waste collection, disposal and recycling services, is another stock set to surge in the third quarter of 2024. The company’s strong market position and capital expenditures in renewable natural gas make it well-positioned to outperform.
Waste Management is at the forefront of integrating advanced technologies to enhance operational efficiency. The company’s investments in automation, data analytics and route optimization have significantly improved its service delivery and cost management. Moreover, its recent foray into renewable natural gas is a no-brainer, with significant EBITDA margin expansion potential.
Management is allocating approximately $1.2 billion to invest in 20 new renewable natural gas facilities by 2026, which could accelerate its growth in the coming years. In its latest quarterly financial results, revenue increased 5% year over year to $5.16 billion. Earnings per share swelled 35% year over year to $1.75 per share, with adjusted EBITDA margin up 240 basis points. With strong guidance for FY24, WM stock is one of the best stocks set to surge in the second half of 2024.
Goldman Sachs (GS)
Goldman Sachs (NYSE:GS), a global investment banking and securities firm, rounds out the list of top stocks set to surge in Q3 2024. The company’s diversified business model and improving financial conditions in the broader economy provide a solid foundation for growth.
Goldman Sachs’ potential to surge is its strategic focus on technology and innovation. The firm has invested heavily in digital platforms to enhance its service offerings and improve client experiences. This digital transformation is expected to drive efficiency, reduce costs and open new revenue opportunities.
Furthermore, the company is undergoing a massive turnaround in 2024 after its slump from higher interest rates over the last two years. Its investment banking and wealth management divisions are rebounding as risk appetite boosts its growth prospects. In Q1 FY24, revenue increased 16% year over year to $14.21 billion. Additionally, earnings per share rose 32% from the year prior, with assets under supervision hitting a record $2.85 trillion. As economic activity improves, Goldman Sachs is well-positioned to capitalize on new growth opportunities.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.