As we enter September, it is important to assess the current state of the stock market. Despite a slight dip at the end of last month, the overall outlook remains positive, with expectations of a strong rebound in earnings growth next year. With this in mind, savvy investors may want to consider investing in proven large-cap stocks that have yet to fully recover.
The Case for Nike
Nike, Inc. (NKE) is a prime example of a large-cap stock that has experienced a significant drop in value. Despite facing challenges in recent years, including changing consumer shopping patterns and increased competition in the running shoe market, Nike remains a global leader in the apparel and footwear industry. The company has focused on enhancing its e-commerce and direct-to-consumer offerings to improve margins and adapt to the evolving retail landscape.
In the last fiscal year, Nike’s revenue increased by 10%, and Zacks estimates suggest further growth of 5% in FY24 and 9% in FY25. Although the stock currently holds a Zacks Rank #3 (Hold), it has consistently outperformed earnings estimates, making it an attractive option for long-term investors.
The Opportunity with NextEra Energy
NextEra Energy (NEE) is another large-cap stock that has experienced a decline in value. The company, which operates one of the largest electric utilities in the U.S. and is a major player in renewable energy, offers a unique combination of stability and long-term growth potential. Despite a 20% drop in 2023, NextEra Energy has achieved a remarkable 750% increase in the last 20 years.
NextEra Energy is trading at a discount to its 10-year highs and holds a position among the S&P 500 Dividend Aristocrats. With 10 out of 13 brokerage recommendations rating NEE as a “Strong Buy,” it is evident that NextEra Energy is a compelling investment opportunity.
Conclusion
Investors looking to capitalize on undervalued stocks should consider Nike and NextEra Energy. Both companies have strong fundamentals and a track record of success, making them attractive options for long-term gains.
Disclaimer: The views and opinions expressed herein are those of the author and do not necessarily reflect the views and opinions of Nasdaq, Inc.
