3 Stocks That Recently Raised Their Guidance for the Year

GDP grew at a rate of 2.4% in the second quarter as the economy did better than expected. And many businesses are also seeing strong demand for their products and services. That, in turn, leads to upgraded forecasts and better outlooks for the entire year.

AbbVie (ABBV -4.58%), Coca-Cola (KO), and DoorDash (DASH 3.12%) all recently boosted their projections for 2023. Here's a look at why they are more optimistic about the future, and whether you should consider adding these stocks to your portfolio.

1. AbbVie

Drugmaker AbbVie is looking at a tough year with sales of its top drug Humira expected to fall significantly amid an increase in competition. With biosimilars becoming available, the drug's market share will take a big hit. But the situation isn't as dire as the company's original forecast suggested.

Initially, AbbVie expected Humira's sales to fall by 37% this year, but now the company is expecting a 35% decline. Some of the biosimilars aren't priced at big discounts to Humira, which is why the outlook is a bit more favorable.

At 35%, it's still a sizable hit for a drug that generated around $20 billion in revenue for AbbVie in each of the past three years. But the company raised its guidance nonetheless, and now expects its adjusted diluted per-share earnings to be within a range of $10.90 to $11.10, which is up from its previous forecast of $10.57 to $10.97.

At 13 times estimated future earnings, AbbVie's valuation is relatively low -- the average healthcare stock trades at a multiple of more than 18. Although Humira's sales will continue to decline in the future, the company has previously stated that it expects new immunology drugs Skyrizi and Rinvoq to eventually reach a higher combined peak. For long-term investors, AbbVie could make for an excellent stock to buy right now.

2. Coca-Cola

Soft drink company Coca-Cola enjoys strong pricing power, which has enabled it to pass along rising costs to consumers without seeing a big drop off in demand.

Through the first six months of the year, the company's net revenue has risen by 5%, even with foreign currency exchange rates negatively impacting its top line. Price mix has played a big part in the company's sales growth, resulting in a 10% boost to the top line -- but even concentrate sales, which relate to volume, were up by 1%, indicating that demand hasn't dropped off even with the increase in price.

As a result of the stronger-than-expected performance, management projects that the company's comparable earnings per share will grow between 4% and 5% this year, up from a previous range of 3% to 4%. It also upgraded its forecast for organic revenue growth, now projecting it to be between 8% and 9%, which is a full percentage point higher than before.

Coca-Cola could be a solid stock to own for dividend investors as it yields 3% and has a robust, stable business. But if you're a growth investor, you still may want to pass on the stock as its price-to-earnings multiple of 27 is fairly high for a business that has been relying on price increases for much of its growth this year.

3. DoorDash

Food delivery also remains surprisingly resilient even though prices are on the rise. DoorDash reported its second-quarter numbers last week, and revenue of $2.1 billion for the period ended June 30 was up 33% year over year. The company's orders were up by 25% to 532 million as demand remained strong.

For the full year, DoorDash is projecting that its marketplace gross order value, which is the total of all of its orders, will be within a range of $64.2 billion to $65.2 billion this year, up from a previous forecast of $63 billion to $64.5 billion. The company also boosted its projections for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by $150 million, and is now expecting up to $1.05 billion in adjusted earnings.

DoorDash may be the riskiest stock on this list. The business is doing well right now, but if economic conditions worsen, demand could start to drop off. A possible headwind is the resumption of student loan repayments later this year, which will impact purchasing power and potentially the amount of money consumers spend on food delivery.

With the stock inching closer to its 52-week high and trading at 83 times its estimated future earnings, investors may be better off taking a wait-and-see approach as there could still be tougher times ahead for the business.