Two stocks expected to achieve a market capitalization of $500 billion in the latter half of the year.
As we approach the second half of 2024, the stock market has defied economic uncertainty and remained bullish. Despite the prevailing conditions, there are several equities that have shown resilience and surged to new levels, indicating their potential to attract buying pressure. Finbold has identified Mastercard and Costco stocks as two equities that could see an uptick in their market caps, potentially reaching the $500 billion mark.
Mastercard, a dominant force in the global payments industry, has demonstrated resilience and adaptability to economic shifts. As digital payments continue to replace cash transactions, Mastercard has positioned itself at the forefront of this transformation.
In 2024, the company has showcased its resilience with its stock trading in the green for most of the year. Currently, the stock is trading at $447.07, with a year-to-date gain of nearly 6%. The potential for Mastercard to reach a $500 billion market cap lies in its status as a significant growth stock with the potential for sustained gains in the coming months. This potential is supported by its projected earnings growth.
Stocks with rapidly increasing profits tend to attract significant attention, and double-digit earnings growth is particularly enticing as it signals strong future prospects and potential stock price gains. Mastercard’s historical EPS growth rate is 13.5%, but more importantly, its projected EPS growth for 2024 stands at 25.3%, surpassing the industry average of 17.1%.
Cash flow is another critical aspect to consider. Mastercard’s year-over-year cash flow growth currently stands at 28.5%, outpacing many peers and the industry average of 15.5%. Over the past 3-5 years, the company has achieved an annualized cash flow growth rate of 14.2%, compared to the industry average of 13.3%.
As of now, Mastercard’s market cap is $415.6 billion, meaning the stock would need to increase by 20% to reach the $500 billion mark.
Costco, on the other hand, is also on track to achieve a $500 billion market cap in the second half of 2024. This is driven by its robust financial performance and strategic growth initiatives. In 2024, Costco’s stock has rallied by almost 24%, reflecting strong investor confidence.
The potential for Costco’s market cap increase is backed by its recent performances. In the fiscal third quarter, the company surpassed Wall Street expectations, reporting net sales of $58.52 billion and adjusted earnings of $3.78 per share. This performance was supported by higher sales and lower-than-expected operating expenses.
Costco’s business model, which focuses on providing high-quality products at competitive prices, has garnered a loyal customer base and driven substantial growth. The company’s global expansion efforts, including the opening of new warehouses in China and Spain, tap into burgeoning middle-class populations, further boosting revenue streams and contributing to bullish sentiment.
Additionally, Costco is considering a potential membership fee increase, which further supports its stock. This strategy, coupled with its ability to navigate macroeconomic challenges effectively, solidifies Costco’s reputation as a premier name in the retail sector.
Currently, Costco’s stock is trading at $809.89, having rallied over 12% last month. Its market cap stands at $359.08 billion, meaning it would need an increase of almost 40% to reach the $500 billion market cap.
Both Mastercard and Costco have strong fundamentals, and their ability to attract significant buying pressure will depend on the overall economic outlook.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative, and when investing, your capital is at risk.
