In this article, we discuss 10 companies that recently raised their guidance.
Inflation risks continue to weigh heavily on the US economy, with the International Monetary Fund (IMF) recently revising growth projections for 2022 and 2023, and also raising the unemployment rate forecasts through 2025. On July 13, the IMF said it expected the US economy to expand by 2.3% this year, down from the 2.9% growth it had projected in the month of June. The IMF also raised the unemployment rate forecast to 3.7% from 3.2% previously. It noted that the rate may exceed 5% in 2024 and 2025.
Later, JPMorgan Chase CEO Jamie Dimon also outlined some warning signs for the US economy, citing geopolitical tensions, high inflation, and waning consumer confidence to make the point that not all was good despite the numbers from the job market. However, comments made by the executives of the investment bank during their earnings calls show that they do not believe that the market has entered a recession yet, as the labor market continues to grow and consumer spending numbers also remain healthy.
Other advisors are also turning bearish on the economy. Investment bank Goldman Sachs decreased its outlook for the US GDP in the second quarter of 2022 to an annualized gain of just 0.7%, down from the previous projection of a 1.9% increase. In this bleak macro environment, it might be prudent to identify firms that have raised their guidance despite the weakening economy. Some of the stocks to monitor in this regard include Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Abbott Laboratories (NYSE:ABT), and Biogen Inc. (NASDAQ:BIIB).
Our Methodology
The companies that have raised guidance numbers in 2022 were selected for the list. Data from around 900 elite hedge funds tracked by Insider Monkey in the first quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Speedcurve Performance Analytics
Companies that Recently Raised Guidance
10. Elevance Health Inc. (NYSE:ELV)
Number of Hedge Fund Holders: N/A
Elevance Health Inc. (NYSE:ELV) is a health benefits firm. The firm posted earnings for the second quarter of 2022 on July 20, reporting earnings per share of $8.04, beating market estimates by $0.30. The revenue over the period was $38 billion, up over 15% compared to the revenue over the same period last year and beating estimates by $430 million. The firm increased guidance numbers for earnings, saying it expected annual earnings guidance of up to $28.70 against consensus of $28.64.
On July 21, RBC Capital analyst Ben Hendrix maintained a Sector Perform rating on Elevance Health Inc. (NYSE:ELV) stock and lowered the price target to $505 from $544, appreciating the solid earnings of the firm in the second quarter.
Just like Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Abbott Laboratories (NYSE:ABT), and Biogen Inc. (NASDAQ:BIIB), Elevance Health Inc. (NYSE:ELV) is one of the stocks on the radar of elite investors.
9. Valmont Industries, Inc. (NYSE:VMI)
Number of Hedge Fund Holders: 23
Valmont Industries, Inc. (NYSE:VMI) markets fabricated metal products. In earnings results for the second quarter of 2022, posted on July 20, the company reported earnings per share of $3.70, beating estimates by $0.36. The revenue over the period was $1.1 billion, up close to 27% compared to the revenue over the same period last year and beating estimates by $140 million. The firm raised fiscal year 2022 net sales guidance, projecting growth of up to 21% against prior projections of 17%. The revenue was guided to exceed $4 billion.
On July 18, Northcoast analyst Ryan Connors initiated coverage of Valmont Industries, Inc. (NYSE:VMI) stock with a Buy rating and a price target of $300, noting that the demand outlook for the firm appears more promising relative to construction and municipal.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Impax Asset Management is a leading shareholder in Valmont Industries, Inc. (NYSE:VMI), with 987,877 shares worth more than $235 million.
In its Q2 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Valmont Industries, Inc. (NYSE:VMI) was one of them. Here is what the fund said:
“Valmont Industries, Inc. (NYSE:VMI) is a leading designer and manufacturer of engineered metal products. Its portfolio includes metal and concrete poles for traffic lighting, cell towers and highway signs, utility support structures such as poles for transmission lines and a single-axis solar tracker for utility scale solar installations and electric-powered, center-pivot irrigation systems that efficiently irrigate fields ranging from 4 to 500 acres. The company is led by a new management team we believe is positioning it to benefit from several secular and cyclical tailwinds. These include accelerating spending for solar, wind and 5G infrastructure, and renewed irrigation investments in international markets—Egypt and Kazakhstan in particular—to ensure more efficient (reducing water usage by 50%), reliable and secure food production following disruptions in food/commodity supplies during the COVID-19 pandemic. With shares trading at an attractive price relative to our private market value estimate and a compelling growth runway ahead, we added to our position during the quarter.”
8. Herc Holdings Inc. (NYSE:HRI)
Number of Hedge Fund Holders: 25
Herc Holdings Inc. (NYSE:HRI) operates as an equipment rental supplier. The firm posted earnings for the second quarter of 2022 on July 21, reporting earnings per share of $2.47, missing market estimates by $0.12. The revenue over the period was $640 million, up over 30% compared to the revenue over the same period last year and beating projections by $9 million. The firm increased guidance numbers for earnings, saying it expected adjusted EBITDA to range from $1.195 billion to $1.245 billion versus prior outlook of $1.175 billion to $1.245 billion.
On May 13, Herc Holdings Inc. (NYSE:HRI) declared a quarterly dividend of $0.575 per share, in line with previous. The forward yield was 2.11%. The dividend was paid to shareholders by late May and early June.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm Icahn Capital LP is a leading shareholder in Herc Holdings Inc. (NYSE:HRI), with 4 million shares worth more than $672 million.
7. Verra Mobility Corporation (NASDAQ:VRRM)
Number of Hedge Fund Holders: 30
Verra Mobility Corporation (NASDAQ:VRRM) provides smart mobility technology solutions. On July 19, the firm raised guidance numbers for the rest of the fiscal year based on year-to-date results. Revenue for the fiscal year was guided up to $740 million against consensus estimates of $715 million. The adjusted EBITDA was guided to around $325 million to $335 million compared to $322 million that had been forecasted earlier. The share price of the firm jumped over 3% after the guidance raise.
On July 20, Deutsche Bank analyst Faiza Alwy maintained a Hold rating on Verra Mobility Corporation (NASDAQ:VRRM) stock and raised the price target to $19 from $18, noting the firm had strong driving trends amid robust travel demand.
Among the hedge funds being tracked by Insider Monkey, Delaware-based firm Darlington Partners Capital is a leading shareholder in Verra Mobility Corporation (NASDAQ:VRRM), with 10.9 million shares worth more than $178 million.
6. Quest Diagnostics Incorporated (NYSE:DGX)
Number of Hedge Fund Holders: 37
Quest Diagnostics Incorporated (NYSE:DGX) provides diagnostic testing services. On July 21, the firm released earnings for the second quarter of 2022. It posted earnings per share of $2.36, beating analyst estimates by $0.10. The revenue over the period was $2.45 billion, down 3.9% year-on-year but beating market estimates by $110 million. The company also raised full year earnings per share guidance to $8.64 per share. The guidance for revenue for the year was raised to $9.75 billion against consensus estimates of $9.4 billion.
On July 19, Quest Diagnostics Incorporated (NYSE:DGX) had announced that it was partnering with Rite Aid to offer COVID-19 testing at more than 2,300 stores. As part of the deal, Rite Aid customers can receive testing kits at a drive-thru location or at home.
At the end of the first quarter of 2022, 37 hedge funds in the database of Insider Monkey held stakes worth $442 million in Quest Diagnostics Incorporated (NYSE:DGX), compared to 32 in the preceding quarter worth $602 million.
Alongside Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), Abbott Laboratories (NYSE:ABT), and Biogen Inc. (NASDAQ:BIIB), Quest Diagnostics Incorporated (NYSE:DGX) is one of the stocks that hedge funds are monitoring.
In its Q4 2021 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Quest Diagnostics Incorporated (NYSE:DGX) was one of them. Here is what the fund said:
“Healthcare is included in the portfolio both for company-specific reasons, as well as big picture trends. At the company level, we hold select companies in pharmaceuticals, healthcare services and health insurance at attractive valuations. This is at a time when the average age of the U.S. population is fast approaching 40, older than Asia-Pacific and a little younger than the aged populations of Europe and Japan. The number of seniors in the U.S.—i.e., 65 years or older— now surpasses 54 million, or about 15% of the population. Seniors, on average, take a much greater number of medications and account for a large and disproportionate share of healthcare spending, and we expect that trend to continue due to both raw demographics and a proliferation in the number of available treatments and services available now, the latter being driven by innovation and investment in the healthcare industry. Representative holdings in the Fund include Cigna, UnitedHealth Group, Viatris and Quest Diagnostics Incorporated (NYSE:DGX).”
5. Pool Corporation (NASDAQ:POOL)
Number of Hedge Fund Holders: 42
Pool Corporation (NASDAQ:POOL) markets swimming pool supplies, equipment, and related leisure products. The firm posted earnings for the second quarter of 2022 on July 21, reporting earnings per share of $7.63, beating market estimates by $0.11. The revenue over the period was $2.1 billion, up over 17% compared to the revenue over the same period last year but missing estimates by $30 million. The firm increased guidance numbers for earnings, saying it expected annual earnings guidance of up to $19.13 per share against consensus of $18.85.
On June 23, Loop Capital analyst Garik Shmois maintained a Hold rating on Pool Corporation (NASDAQ:POOL) stock and lowered the price target to $370 from $465, noting there was a strong demand and pricing environment for the firm but pressure from inflation.
At the end of the first quarter of 2022, 42 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Pool Corporation (NASDAQ:POOL), compared to 38 in the preceding quarter worth $1.3 billion.
In its Q1 2022 investor letter, Carillon Tower Advisers highlighted a few stocks and Pool Corporation (NASDAQ:POOL) was one of them. Here is what the fund said:
“Pool Corporation (NASDAQ:POOL) is the world’s largest wholesale distributor of swimming pool supplies, equipment, and related leisure products. After an impressive run, the shares cooled off a bit as investors took some profits on stocks that were perceived to have benefitted from the pandemic. Despite this, the firm continues to see strong demand and remains well positioned to capitalize on a number of firmly established secular trends. Migration trends toward the Sunbelt as well as the desire consumers have shown to invest in their outdoor living and entertainment spaces have resulted in healthy fundamentals for the pool industry going forward.”
4. Tractor Supply Company (NASDAQ:TSCO)
Number of Hedge Fund Holders: 43
Tractor Supply Company (NASDAQ:TSCO) is a rural lifestyle retailer. On July 21, the firm released earnings for the second quarter of 2022. It posted earnings per share of $3.53, beating estimates by $0.01. The revenue over the period was $3.9 billion, up over 8% compared to the revenue over the same period last year and beating estimates by $10 million. The firm also raised guidance numbers for the 2022 fiscal year, saying it expected net sales of upto $14.05 billion against consensus estimates of $13.79 billion.
On July 6, Truist analyst Scot Ciccarelli maintained a Buy rating on Tractor Supply Company (NASDAQ:TSCO) stock and lowered the price target to $246 from $266, noting that multiple, long-duration top line drivers continue for the firm.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Select Equity Group is a leading shareholder in Tractor Supply Company (NASDAQ:TSCO), with 2 million shares worth more than $512 million.
In its Q4 2021 investor letter, Wedgewood Partners highlighted a few stocks and Tractor Supply Company (NASDAQ:TSCO) was one of them. Here is what the fund said:
“Tractor Supply Company (NASDAQ:TSCO) contributed favorably to performance during the quarter. Demand from the Company’s niche, affluent rural customer base continues to surge in a post-COVID world with comparable store sales running over +40% higher compared to pre-pandemic (2019) levels. Tractor Supply is seeing growth across all channels, from its website to e-commerce that is fulfilled by its 2000-store fleet to regular in-store traffic. The Company is also managing inflation and supply chain disruptions extremely well, passing through nearly +7% of inflation on consumable goods and managing a quarterly inventory in-stock rate that was actually higher than pre-pandemic. Tractor Supply is an exceptional retailer, and we continue to hold it as a top position.”
3. Biogen Inc. (NASDAQ:BIIB)
Number of Hedge Fund Holders: 61
Biogen Inc. (NASDAQ:BIIB) develops therapies for the treatment of neurological and neurodegenerative diseases. In earnings results for the second quarter of 2022, posted on July 20, the company reported earnings per share of $5.25, beating estimates by $1.16. The revenue over the period was $2.5 billion, down close to 7% compared to the revenue over the same period last year but beating estimates by $110 million. The firm raised fiscal year 2022 revenue outlook to $10.1 billion against consensus estimates of $9.84 billion.
On July 21, Truist analyst Robyn Karnauskas maintained a Buy rating on Biogen Inc. (NASDAQ:BIIB) stock and lowered the price target to $270 from $320, appreciating the prospects of the drug pipeline of the firm despite depression in base business volumes.
At the end of the first quarter of 2022, 61 hedge funds in the database of Insider Monkey held stakes worth $2.4 billion in Biogen Inc. (NASDAQ:BIIB), compared to 63 in the preceding quarter worth $2.3 billion.
In its Q4 2021 investor letter, Longleaf Partners Fund highlighted a few stocks and Biogen Inc. (NASDAQ:BIIB) was one of them. Here is what the fund said:
“Biogen Inc. (NASDAQ:BIIB) (83%, 2.43%; 5%, 0.10%), a biotechnology company specializing in therapies for the treatment of neurological diseases, was a strong contributor before we exited the position in the first half. We began acquiring shares in January 2021, paying between 9- 11x FCF and a discount to our appraisal, even if the company’s promising drug pipeline turned out to be worth 0. After Biogen’s Alzheimer’s drug Aduhelm was approved in June, we quickly sold out after the stock’s price appreciated over 70% and briefly exceeded our appraisal of the value. We re-initiated a position in Biogen Inc. (NASDAQ:BIIB) in December at a price below our original cost basis from January. The stock became very cheap once again after Aduhelm’s early sales disappointed due to its high initial cost before management correctly cut the price. We think Biogen’s core Multiple sclerosis (MS) and Biosimilars businesses are strong enough to create sustainable double-digit EPS growth, even if Aduhelm and the entire Alzheimer’s program is worth zero. We also expect a board led by large shareholders to continue the company’s accretive repurchase, while considering other beneficial corporate actions.”
2. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 68
Abbott Laboratories (NYSE:ABT) is an Illinois-based healthcare company. On July 20, the firm released earnings for the second quarter of 2022. It posted earnings per share of $1.43, beating analyst estimates by $0.29. The revenue over the period was $11.3 billion, up over 10% year-on-year and beating market estimates by $930 million. The company also raised full year earnings per share guidance to $3.50 per share. The guidance for COVID-related testing sales was $6.1 billion, over $5.6 billion of which have already been achieved.
On July 21, RBC Capital analyst Shagun Singh maintained an Outperform rating on Abbott Laboratories (NYSE:ABT) stock and lowered the price target to $132 from $143, appreciating the solid second quarter results of the firm.
Among the hedge funds being tracked by Insider Monkey, Ohio-based investment firm Diamond Hill Capital is a leading shareholder in Abbott Laboratories (NYSE:ABT), with 6 million shares worth more than $721 million.
In its Q1 2022 investor letter, Diamond Hill Capital highlighted a few stocks and Abbott Laboratories (NYSE:ABT) was one of them. Here is what the fund said:
“Abbott Laboratories (NYSE:ABT) announced a recall of its infant formula brand Similac® in the US. Though the recall will impact near-term revenues, we are not concerned about any long-term impacts. We remain optimistic about the company’s prospects over the long run because, in our view, it is one of the highest quality names in health care with a talented management team that makes smart capital allocation decisions. Abbott also has leading health care and consumer franchises with a particularly strong competitive position in the medical device business. Abbott Laboratories (NYSE:ABT) continues to launch innovative products in key strategic areas (such as diabetes, structural heart and diagnostics), which should help drive not only revenue growth but margin expansion.”
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 81
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) makes and sells integrated circuits and semiconductors. The company posted earnings for the second quarter of 2022 on July 14, reporting earnings per share of $1.55, beating estimates by $0.05. The revenue over the period was $18 billion, up 36% compared to the revenue over the same period last year and beating estimates by $580 million. The firm guided third quarter revenue to up to $20.6 billion against consensus estimates of $18.4 billion.
On June 21, Loop Capital analyst Charles ParkTaiwan initiated coverage of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock with a Buy rating and a price target of NT$600, noting that the firm was an industry leader in foundry.
At the end of the first quarter of 2022, 81 hedge funds in the database of Insider Monkey held stakes worth $10.1 billion in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 72 in the preceding quarter worth $10.9 billion.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was one of them. Here is what the fund said:
“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted in the first quarter due to rising geopolitical tensions, macroeconomic uncertainties, and concerns over softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver above its 15% to 20% revenue growth target over the next several years.”
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Disclosure. None. 10 Companies that Recently Raised Guidance is originally published on Insider Monkey.
