The June consumer price index rose 9.1% on a year-over-year basis, marking the biggest increase since 1981. The hot inflation report is expected to prompt the Fed to deliver another 75 basis points rate hike.
Despite the dismal performance of the S&P 500 in the first half of this year, experts believe that there might be some signs of hope for investors. The major indices are expected to improve as buy-low opportunities become heavy on fears of further declines. The market is predicted to reach a bottom and stabilize sometime before 2023.
We think the fundamentally strong stocks Tesla, Inc. (TSLA) and Sony Group Corporation (SONY) are well-positioned to help grow your portfolio.
Tesla, Inc. (TSLA)
This EV manufacturing behemoth does not need any introduction. TSLA sells EVs, electric generation systems, and storage systems globally. The company operates through the segments Automotive; and Energy Generation and Storage.
On July 2, TSLA declared that in the second quarter, it produced over 258,000 vehicles and delivered over 254,000 vehicles. June marked the highest production month in the history of the company.
For the fiscal first quarter of 2022, TSLA’s total revenues increased 80.5% year-over-year to $18.76 billion. Non-GAAP net income attributable to common stockholders rose 255.1% from the prior-year quarter to $3.74 billion. Non-GAAP EPS attributable to common stockholders improved 246.2% from the same period the prior year to $3.22.
The consensus EPS estimate of $1.98 for the quarter that ended June 2022 indicates a 36.6% year-over-year increase. Likewise, the consensus revenue estimate for the same quarter of $17.39 billion reflects an improvement of 45.4% from the prior-year period. Moreover, TSLA has an impressive surprise earnings history, as it has topped consensus EPS estimates in each of the trailing four quarters.
The stock has gained 2% over the past year and marginally over the past five days to close its last trading session at $699.21.
Sony Group Corporation (SONY)
SONY, headquartered in Tokyo, Japan, is a global seller of electronic equipment, instruments, and devices. The company serves consumer, professional, and industrial markets.
On July 11, SONY subsidiary Sony Electronics Inc. announced the expansion of its portable speaker range with three new models. Earlier, on June 13, the company introduced two premium music players with Wi-Fi compatibility and the option to download and stream music. The new products should add to the company’s revenue stream.
SONY’s total sales and financial services revenue increased 1.2% year-over-year to ¥2.26 trillion ($16.53 billion) for the fiscal fourth quarter ended March 31. Net income improved 68.3% from the prior-year period to ¥112.97 billion ($824 million), and net income per share attributable to SONY stockholders came in at ¥88.98, up 66.9% from the same period the prior year.
Street EPS estimate for the fiscal year 2024 of $7.67 indicates a 21.7% year-over-year rise. Likewise, Street revenue estimate for the same year of $82.69 billion reflects an increase of 0.7% from the prior year. In addition, SONY has topped consensus EPS estimates in three out of the trailing four quarters, which is impressive.
The stock has gained 2.2% over the past five days to close its last trading session at $82.05.
TSLA shares were trading at $723.69 per share on Wednesday afternoon, up $24.48 (+3.50%). Year-to-date, TSLA has declined -31.52%, versus a -19.04% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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