Zacks Industry Outlook Highlights Carrier Global, Garmin and Trimble

For Immediate ReleaseChicago, IL – October 21, 2024 – Today, Zacks Equity Research discusses Carrier Global CARR, Garmin GRMN and Trimble TRMB.Industry: ElectronicsLink: https://www.zacks.com/commentary/2353055/3-electronics-stocks-to-buy-from-a-prospering-industryThe Zacks Electronics – Miscellaneous Products industry has been suffering from challenging macroeconomic conditions, high levels of inventories with distributors, and steep interest rates. The global economic turmoil is expected to keep the semiconductor capex under check, which does not bode well for industry participants in the near term. However, players like Carrier Global, Garmin and Trimble are benefiting from higher spending on advanced technologies, including augmented reality (AR), virtual reality (VR), and intelligent climate solutions.Continuing investments in data centers, high-performance computing and 5G end markets are the key catalysts. Fab (foundry) expansion in the United States, South Korea, Taiwan and China, as well as higher spending on memory equipment, is expected to drive growth in 2024 and beyond.Industry DescriptionThe Zacks Electronics – Miscellaneous Products industry includes a number of original equipment manufacturers of air-conditioning systems, green energy solutions, remote-control systems, GPS navigation, home automation systems, healthcare devices, industry/factory automation, robotics, semiconductor and optical applications, and energy management solutions.The industry is evolving on digital transformation and the growing demand for silicon across multiple markets. The increasing cost of manufacturing bodes well for equipment suppliers, while the growing demand for silicon is a positive for semiconductor companies.Apart from the United States, companies in this industry are based in Japan, Germany, the Netherlands and Switzerland. These companies either have manufacturing operations in China and South-East Asia or generate significant revenues from these regions.3 Trends Shaping the Future of the IndustrySolid Capital Spending Drives Prospects: Technology transitions are driving product complexities, which are raising the demand for solutions provided by industry participants. Increasing investment in expanding manufacturing capacity by semiconductor companies is a key catalyst in the long run (irrespective of the near-term hiccups due to the challenging macroeconomic conditions).Since semiconductor companies are the major customers of miscellaneous electronics product manufacturers, the trend bodes well for industry participants. In addition, rising spending on advanced nodes — 7 nm, 5 nm, and 3 nm processes from logic and foundry customers — favors industry participants. Notably, logic and foundry spending is anticipated to be healthy this year.Emerging Markets of Wearables, AR & VR Drive Growth: Industry participants are riding on strong demand for wearables and AR and VR-supported display systems in defense, industrial, consumer applications and healthcare end markets. The adoption of AR and VR is increasing due to the growing proliferation of the metaverse.Challenging Macroeconomic Condition is a Headwind: Industry participants are suffering from a challenging macroeconomic condition globally, with enterprises showing reluctance in committing to multi-year deals. Persistent inflation and unfavorable forex trends do not bode well for industry participants.Zacks Industry RankThe Zacks Electronics – Miscellaneous Products industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #103, which places it in the top 41% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of the positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential. Since Sept. 30, 2024, earnings estimates for the industry for the current year have moved north by 2%.Given the bullish prospects, there are several stocks worth buying in the industry. But before we present those stocks, let’s take a look at the industry’s recent stock-market performance and valuation picture.Industry Lags S&P 500, Broader SectorThe Zacks Electronics – Miscellaneous Products industry has underperformed the S&P 500 and the broader Zacks Computer & Technology sector in the past year.The industry has returned 1.9% during this period compared with the S&P 500 composite’s return of 36.1% and the broader sector’s appreciation of 41.1%.Industry's Current ValuationOn the basis of the forward 12-month P/E, which is a commonly used multiple for valuing Electronics-Miscellaneous products companies, we see that the industry is currently trading at 17.31X compared with the S&P 500’s 22.2X and the sector’s forward-12-month P/E of 25.88X.Over the last five years, the industry has traded as high as 23.98X and as low as 11.31X, with the median being 16.94X.Stocks to Buy Right NowCarrier Global: This Palm Beach Gardens, FL-based company is a provider of intelligent climate and energy solutions.Carrier’s focus on intelligent climate solutions and strategic acquisitions, including Viessmann Climate Solutions, bolstered growth and expanded free cash flow.This Zacks Rank #2 (Buy) company’s shares have gained 41.8% year to date. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate CARR’s 2024 earnings has increased by a penny to $2.85 per share over the past 30 days.Garmin: This Zacks Rank #2 stock is benefiting from strong momentum across the Fitness and Auto OEM segments. While strength in the Fitness segment is primarily attributed to advanced wearables demand, Auto OEM revenues are driven by increased shipments of domain controllers to BMW.Strong momentum across the Aviation and Marine segments is a positive. Garmin’s growing focus on continued innovation, diversification, and market expansion to explore opportunities across all business segments is another positive.The Zacks Consensus Estimate for 2024 has increased by three cents to $6.08 per share over the past 30 days. GRMN shares have jumped 29.3% year to date.Trimble: This Zacks Rank #2 company is benefiting from strong momentum in the transportation segment, driven by organic growth in enterprise and solid demand for map solutions, which is driving top-line growth.Increasing recurring revenues in the revenue mix is improving visibility. Trimble’s initiatives to reduce debt improve balance sheet strength.TRMB shares have gained 15.5% in the year-to-date period. The consensus mark for Trimble’s 2024 earnings has remained unchanged at $2.74 per share over the past 30 days.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Garmin Ltd. (GRMN): Free Stock Analysis Report Trimble Inc. (TRMB): Free Stock Analysis Report Carrier Global Corporation (CARR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks