Many companies are struggling this year amid turbulent macroeconomic issues. Supply chain problems, inflation, and rising interest rates are crippling forecasts this year. Most recently, Target trimmed its outlook for its current quarter as mounting inventory levels threaten to chip away at its margins.
But there are some companies that are optimistic about this year, even despite the adversity. Three stocks that recently raised their guidance include Thermo Fisher Scientific (TMO 0.80%), Home Depot (HD 0.66%), and Pembina Pipeline (PBA 0.69%). Here's why these companies remain positive about this year.
1. Thermo Fisher Scientific
Healthcare giant Thermo Fisher provides businesses with consumables, including scientific instruments, that are essential to the industry as a whole. And so with hospitals resuming more normal, pre-pandemic operations, this is a company that can benefit.
NYSE: TMO
Key Data Points
In the past year, the healthcare stock has outperformed the S&P 500, rising by 10% while the index has fallen by 11%. The company released its latest earnings report in April, where revenue for the first three months of the year topped $11.8 billion and rose 19% from the prior-year period. The company has gotten a boost from COVID-19 testing revenue and that's one of the reasons that the business increased its guidance for the year as demand for that is proving to be better than anticipated.
Plus, Thermo Fisher sees growth opportunities in its core business that will help drive better-than-expected results. At $42.5 billion for 2022, it's not a huge increase from the company's earlier forecast of $42 billion in sales. The company is also modestly hiking its adjusted earnings guidance by $0.22 per share. Thermo Fisher now expects to make $22.65 per share this year.
These aren't huge increases in guidance, but given the economic circumstances, it's still a positive sign for investors that a company is doing well. Its versatility is one of the main reasons this is an excellent stock to hold for the long haul.
2. Home Depot
Did you know that nearly four out of five homebuyers have to take on an unexpected repair within the first year of acquiring a new home? At a time when home sales have been going through the roof, it stands to reason then that a home repair retailer like Home Depot should remain busy.
NYSE: HD
Key Data Points
And the company is doing well. When it reported earnings last month, management said its revenue for the period marked the best first quarter in its history. Net sales of $38.9 billion for the period ended May 1 rose by 3.8% year over year. The results were encouraging enough that the company announced an increase to the guidance.
At the end of the 2021, the company projected sales for the coming year "to be slightly positive." Now, it's projecting a firmer growth rate of 3%. And its diluted per-share earnings growth will be in the mid-single digits versus the low single digits the company forecast previously.
Like Thermo Fisher, these aren't huge increases in guidance. But any rosy outlook these days is still a rarity in the markets. Although the stock remains down 8% over the past 12 months, Home Depot can be a potential underdog to be hanging onto right now.
3. Pembina
Given the run-up in oil prices this year, investors probably aren't surprised to find an oil and gas company on this list. Oil storage and transportation company Pembina Pipeline is growing more bullish given the activity levels in the industry of late; demand for oil may not have even hit a peak yet as the busy travel season is just about to get underway.
NYSE: PBA
Key Data Points
The Canadian-based company released its first-quarter numbers in May, where revenue of 3 billion Canadian dollars for the period ended March 31 rose by a staggering 51% year over year. Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) profit of CA$1 billion was also a record for the company. Pembina credited higher commodity prices and rising volumes for its strong earnings results in Q1.
The company announced that its guidance for adjusted EBITDA in 2022 would now be between CA$3.45 billion and CA$3.6 billion, up from a previous range of CA$3.35 billion and CA$3.55 billion. The boost in the guidance comes from the expectation of high prices for crude oil and natural gas liquids.
Shares of Pembina are up around 20% in the past year, and the stock could be a great way to gain exposure to a red-hot oil and gas sector.
