With the first half of 2024 almost over, the stock market has been bullish despite prevailing economic uncertainty. Several equities have shown resilience, surging to new levels.
As the second half of the year approaches, there remain several equities with significant potential to attract buying pressure. In this context, Finbold has identified Mastercard (NYSE: MA) and Costco (NASDAQ: COST) stocks as having the potential to see an uptick in their market caps, possibly reaching the $500 billion mark.
Mastercard
Mastercard, already a dominant force in the global payments industry, has shown resilience and adaptability to economic shifts. As digital payments continue supplanting cash transactions, Mastercard has positioned itself at the forefront of this transformation.
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In 2024, the company has demonstrated resilience, with its stock trading in the green for much of the year. As of press time, MA was trading at $447.07, with a year-to-date gain of almost 6%.
The potential for Mastercard to hit the $500 billion market cap level lies in its standing as a significant growth stock with the potential for sustained gains in the coming months. This potential is evident in its projected earnings growth.
Notably, stocks with rapidly increasing profits tend to attract significant attention, and double-digit earnings growth is particularly appealing 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%, exceeding the industry average of 17.1%.
Additionally, cash flow is another critical aspect to consider. Mastercard’s year-over-year cash flow growth is currently 28.5%, outpacing many peers and the industry average of 15.5%. Historically, Mastercard’s annualized cash flow growth rate has been 14.2% over the past 3-5 years, compared to the industry average of 13.3%.
As of press time, MA’s market cap stood at $415.6 billion, meaning the stock will need an upside of 20% to reach the $500 billion mark.
Costco
Costco is on track to achieve a $500 billion market cap in the second half of 2024, driven by robust financial performance and strategic growth initiatives. In 2024, Costco’s stock has rallied almost 24%, reflecting strong investor confidence.
The potential is backed by recent performances. In the fiscal third quarter, Costco surpassed Wall Street expectations, reporting net sales of $58.52 billion and adjusted earnings of $3.78 per share. Higher sales and lower-than-expected operating expenses bolstered this performance.
Costco’s business model, which focuses on providing high-quality products at competitive prices, has built a loyal customer base and driven substantial growth. The company’s global expansion continues, with new warehouses recently opened in China and Spain. This international growth taps into burgeoning middle-class populations, further boosting Costco’s revenue streams and contributing to bullish sentiment.
Moreover, Costco is considering a potential membership fee increase, further supporting its stock. This strategy and its ability to navigate macroeconomic challenges effectively solidifies Costco’s reputation as a premier name in the retail sector.
As of press time, Costco’s stock was trading at $809.89, having rallied over 12% last month.
The stock currently has a market cap of $359.08 billion, meaning it needs an upside of almost 40% to attain the $500 billion market cap.
As highlighted, the two stocks have strong fundamentals, and their ability to attract significant buying pressure will rely on the overall economic outlook.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
