5 Stocks to Buy Before Tariffs Kick In

Benzinga

Predicting the actions of an incoming administration is always tricky, and that's doubly true for someone with a penchant for saber rattling like Donald Trump. While Trump seems committed to another round of tariffs (especially aimed at Chinese imports), the actual size and scope of these moves remains to be seen.

Many business leaders and executives are preparing for new tariffs by readying consumers for increased costs, and the retail sector could be hit hard if the most protective policies come to fruition.

However, not every company stands to suffer from tariff expansion. Some industries, like domestic shippers and specialty retailers, saw a boost in the wake of the election results.

Here are five stocks that stand to benefit from American tariffs on foreign imports.

Methodology

To find stocks that will benefit from tariffs, we need to look for firms with reliable production alternatives outside China and the ability to pass on extra costs to consumers.

If a company’s main competitors have high import costs or lack that kind of pricing power, even better.

Let’s go through the list:

AutoZone Inc.

DIY auto store stocks have soared in the post-pandemic era, and the two clear winners have been AutoZone and Oreilly Automotive Inc. . Both companies have had little issue raising prices during previous tariff implementations, and investors have no reason to assume they won't do the same in the face of the next round.

AutoZone is uniquely positioned to benefit from a higher tariff environment. Even when the first round of tariffs was administered during Trump's initial term, AutoZone still managed to improve its profit margins despite higher costs. Additionally, DIY auto parts stores often hold significant pricing power over consumers since fixing a car is usually a non-negotiable part of life in America (especially in the suburbs). CEO Philip Daniele recently stated that the company intends to pass any tariff increases back onto consumers, which could prompt a flurry of car repair activity before the calendar flips to 2025.

We selected AutoZone over O'Reilly Automotive due to a combination of valuation and analyst ratings. Some of the fundamental valuation factors compared include:

Metric	AZO	ORLY
Price to Earnings (P/E)	21.18	30.11
Price to Sales (P/S)	2.99	4.32
PEG Ratio	1.67	1.89

Based on most fundamental metrics, AutoZone is the cheaper stock to own, and analysts seem to agree. Based on reports from 25 different analysts, AZO shares are a consensus Buy, while ORLY is a consensus Hold. AZO’s three most recent price targets indicate more than 12% upside potential, while recent price targets on ORLY shares indicate only a 4% upside.

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e.l.f. Beauty Inc.

Another company that has previously had success managing trade war battles is e.l.f. Beauty, which sells cosmetic products such as lipstick, eyeliner, foundation, and other skin care products. The company has a solid domestic and international footprint and has products in stores ranging from high-end shops like Ulta Beauty Inc. to drugstores like Rite-Aid.

E.l.f. Beauty relies heavily on Chinese imports but remains on our list because CEO Tarang Amin is confident the company has both the pricing power and supply chain infrastructure to withstand any tariffs until 2026. The company informed customers back in August to expect prices to increase during a potential 2nd Trump term, which could increase sales in the short term as shoppers stock up on their favorite products before the administration can levy new tariffs.

J.B. Hunt Transport Services Inc.

One industry that seems set to benefit from tariffs with minimal downside is domestic shipping and trucking companies. As more retail and consumer discretionary firms move production back to the United States (or at least closer to shore), railways, trucking firms, and other companies focusing on intermodal and last-mile transportation could benefit greatly. One shipping stock that saw a boost in the immediate aftermath of Trump's election was JBHT.

J.B. Hunt is one of the largest domestic transportation companies in the United States. One of its main businesses is loading and unloading shipping containers from railcars. If manufacturers re-shore or near-shore their operations closer to domestic shipping channels, stocks like JBHT could rapidly increase as revenue is boosted by expanding domestic rail usage.

Netflix Inc

If physical goods like electronics, cars, and clothes are going to get more expensive, an excellent place to invest will be services that trade in intellectual property. And after setting records for viewership and gate at the Jake Paul vs. Mike Tyson fight, Netflix is poised to steamroll into one of the few places it hasn't dared tread: live sports. On Christmas Day, Netflix will air two exclusive NFL games with significant playoff implications when the defending champion Kansas City Chiefs visit the Pittsburgh Steelers and the Baltimore Ravens take on the Houston Texans.

To borrow some terms from boxing, Netflix has knocked out its competition in the streaming wars. The company boasts more than 247 million subscribers in 2024, far outpacing Amazon's Prime Video's 200 million (and you don't get the benefits of Prime shipping with Netflix). Disney+ is growing rapidly but still sits nearly 100 million subs behind Netflix.

Hasbro Inc.

Toy maker Hasbro has been a trendsetter when it comes to moving production out of China. The company began moving its operations away from the communist regime in 2012, citing "enterprise risk," the transition has drastically limited the company's exposure to tariffs, showcasing strategic foresight and a proactive approach.

Hasbro makes popular toys, board games, and party favorites under brands like Parker Brothers, Milton Bradley, Kenner, and its own name. While most of its products had traditionally been made in China, the company began its exit in 2012 and reduced Chinese manufacturing to the United States to 50% as of 2020. While the company still depends significantly on Chinese imports, analysts believe the business is better insulated from tariff costs than its peers like Mattel. Plus, many toys were granted a reprieve from the initial tariff blast in 2017, and it’s possible that carveouts could be on deck for companies like Hasbro that moved production out of China.

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Netflix stock keeps ripping higher — why some analysts see more room to run

Yahoo Finance

Netflix (NFLX) stock has closed at a fresh record every day this past week — and it could keep soaring.

A growing number of analysts are calling for the streaming giant's shares to soon trade in the quadruple digits.

On Wednesday, Pivotal Research analyst Jeff Wlodarczak raised his price target on Netflix to a Street high of $1,100 a share, implying over 20% upside based on current trading levels of around $900.

Bank of America's Jessica Reif Ehrlich followed one day later, boosting her target to $1,000 from $800. Jefferies analyst James Heaney also raised his target to $1,000 earlier this week.

The price target increases come despite some concerns over slowing growth for the streaming giant.

Wall Street analysts who cover Netflix have a median price target of just around $800 a share, according to the latest Bloomberg consensus estimates.

One of the main catalysts for the recent price target boosts is the company's continued foray into live events, with the most recent boxing match between Jake Paul and Mike Tyson attracting over 108 million global viewers last weekend to become the most-streamed sporting event of all time.

For context, the 2024 Super Bowl, which was the most-watched American TV broadcast ever, pulled in 124 million US viewers.

The Netflix event's impressive numbers came despite the streamer experiencing several technical glitches throughout the broadcast, which analysts (and investors) mostly shrugged off.

"We view the event as a (very) successful learning experience for NFLX and expect these technical issues will not happen again with future live events," Pivotal Research's Wlodarczak wrote on Wednesday.

The analyst said the event's success likely means Netflix will "accelerate its offerings of 'eventized' live programming," which will help lower subscriber churn and increase the streamer's ability to raise prices.

"The NFLX service remains a highly compelling, frankly relatively inexpensive, entertainment alternative for consumers, which bodes well for future subscriber/average revenue per user growth," he said.

Netflix's 'complementary growth drivers'

Since the start of the year, Netflix shares have surged over 85%, far outpacing the broader markets and streaming rivals, including Disney (DIS) and Comcast (CMCSA). Much of the uptick has been driven by the company's push into live content and the positive impact that could have on its ad-supported offering.

Last week, Netflix said its ad tier, now two years old, has reached 70 million global monthly active users, a significant jump from the 40 million users the company revealed at its second Upfront presentation in May.

Netflix's next big live event will be its NFL Christmas Day doubleheader, with the Kansas City Chiefs vs. Pittsburgh Steelers and the Baltimore Ravens vs. Houston Texans. Beyoncé will serve as the headline performer during the Ravens vs. Texans halftime show, which analysts said should help attract viewers outside of the US.

The company inked a three-season deal with the NFL earlier this year to air the Christmas Day games, which will be produced by CBS Sports (PARA). The streamer reportedly coughed up about $75 million per game, according to the Wall Street Journal.

Jefferies' Heaney, who described the the success of the Jake Paul, Mike Tyson match as a "breakthrough" moment for Netflix's live events strategy, said he's increasingly confident the NFL Christmas Day games will outperform linear viewership and serve as a catalyst to ad growth.

BofA's Reif Ehrlich agreed, adding, "Live and advertising are complementary growth drivers, as more live programming drives additional high value, premium ad inventory. Netflix's ability to monetize this premium live inventory will be key to making advertising a multi-year growth driver."

Netflix recently beat Wall Street expectations across every major financial metric in its third quarter results on Oct. 17, with shares surging to all-time highs as many analysts call Netflix the winner of the hard-fought streaming wars.

Still, the company recently revealed that year-over-year engagement levels came in roughly flat — a potential headwind when it comes to its ability to raise prices and boost growth.

"With much of the subscriber growth seemingly representing improved monetization of an existing (and not growing) user base, we question whether the momentum can continue into next year," MoffettNathanson analyst Robert Fishman wrote in a recent note to clients.

Valuation has also been a concern, with Fishman adding that Netflix's stock "is massively expensive for a company whose own guidance implies a revenue deceleration into 2025." Last month, Netflix said its revenue growth is expected to slow from an expected 15% this year to between 11% and 13% in 2025.

is a Senior Reporter at Yahoo Finance. Follow her on X , and email her at alexandra.canal@yahoofinance.com.

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Warren Buffett Claims To Not 'Time The Market,' But His Cash Horde Tells A Different Story

Benzinga

For decades, famed value investor Warren Buffett has insisted that he does not try to “time the market.” But, his recent sales could serve as a warning sign for investors amid a period of protracted valuations.

What Happened: Buffett’s Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) has gradually wound down its largest positions over the last year.

Berkshire slashed its largest position in Apple Inc by over two-thirds since 2023. Buffett also sold much of his position in Bank of America Corp since the summer. He also trimmed back nearly all of his position in Ulta Beauty Inc , an atypically short holding period for the investor who preaches investing for the long term.

The Omaha, Nebraska-based company’s cash horde now stands at an astounding $325 billion.

See Also: As MSTR’s Michael Saylor Says Warren Buffett Is ‘Destroying’ Berkshire Capital, Analyst Suggests ‘Overpriced...Hot Stock Market’ Could Be The Reason Oracle Of Omaha Is Sitting On $325B Cash

Why it Matters: Several market experts have struggled to comprehend Buffett’s thought process — is he bearish on the market at large? Reallocating his portfolio away from Apple and Bank of America to diversify? Or, as Buffett hinted at in May, anticipating a future change to U.S. tax laws?

An article from Bloomberg columnist Nir Kaissar could fuel the first theory. A post on X relayed a graph from the article showing Buffett’s cash pile conspicuously rising ahead of financial crises.

Cullen Roche
@cullenroche
Interesting piece here from @markets and how Buffett's cash hoard often spikes before equity market slowdowns. 🤔🤔🤔 pic.twitter.com/9aFmsMpP2N
Nov 21, 2024

As companies in the SPDR S&P 500 ETF Trust sustain a period of high valuations, Buffett could simply be heeding his advice, “to be fearful when others are greedy and to be greedy only when others are fearful,” allocating his portfolio away from what he deems riskier investments

Also Read:

S&P 500 Faces Volatile 2025 As ‘Inflation Boom’ Could Return: Bank Of America Strategist

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Levi & Korsinsky Announces The Filing Of A Securities Class Action On Behalf Of Hasbro, Inc. (Has) Shareholders

Reuters

Hasbro

+0.99%

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O'Reilly Automotive (ORLY) Up 0.4% Since Last Earnings Report: Can It Continue?

Zacks

A month has gone by since the last earnings report for O'Reilly Automotive (ORLY). Shares have added about 0.4% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is O'Reilly Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

O'Reilly Q3 Earnings Miss Expectations

O’Reilly reported third-quarter 2024 adjusted earnings per share (EPS) of $11.41, which missed the Zacks Consensus Estimate of $11.53. However, the bottom line increased from $10.72 reported in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4.36 billion, missing the Zacks Consensus Estimate of $4.43 billion. The top line, however, increased 3.8% year over year.

During the quarter, comparable store sales grew 1.5%. The company opened 47 new stores in the United States, Mexico and Canada during the quarter. The total store count was 6,291 as of Sept. 30, 2024.

Financials, Share Repurchase & Costs

In the reported quarter, selling, general and administrative expenses rose 7% year over year to $1.35 billion. Operating income remained flat year over year at $897 million. Net income was $665 million, up from $650 million in the year-ago quarter.

During the reported quarter, O’Reilly repurchased 0.5 million shares for $541 million at an average price of $1,084.28 per share. After the end of the quarter until the release date, ORLY repurchased an additional 0.1 million shares of common stock for a total investment of $70 million at an average price of $1,170.55 per share. As of Oct. 23, the company had nearly $898 million remaining under the current share repurchase authorization.

It had cash and cash equivalents of $115.6 million at the end of the reported quarter, down from $279.1 million recorded as of 2023-end. Its long-term debt was $5.36 billion, lower than $5.57 billion as of Dec. 31, 2023.

During the reported quarter, O’Reilly generated $772 million in cash from operating activities compared with the year-ago period’s $2.43 billion. Capital expenditures totaled $258.3 million compared with $732.9 million in the year-ago period. Free cash flow was $500 million, down 69.8% year over year.

ORLY’s Updated 2024 Outlook

For 2024, O’Reilly estimates total revenues in the range of $16.6-$16.8 billion, down from the prior guidance of $16.6-$16.9 billion. It now expects earnings per share in the range of $40.60-$41.10, down from the previous estimate of $40.75-$41.25. The outlook for comparable store sales growth was revised downward to 2-3% from 2-4%. The outlook for free cash flow remained unchanged at $1.8-$2.1 billion. Capital expenditure guidance remained unchanged in the range of $900 million to $1 billion. The company intends to open 190-200 stores this year.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, O'Reilly Automotive has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, O'Reilly Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

O'Reilly Automotive belongs to the Zacks Automotive - Retail and Wholesale - Parts industry. Another stock from the same industry, Genuine Parts (GPC), has gained 8.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.

Genuine Parts reported revenues of $5.97 billion in the last reported quarter, representing a year-over-year change of +2.5%. EPS of $1.88 for the same period compares with $2.49 a year ago.

For the current quarter, Genuine Parts is expected to post earnings of $1.54 per share, indicating a change of -31.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -22% over the last 30 days.

Genuine Parts has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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Old Dominion (ODFL) Up 13.9% Since Last Earnings Report: Can It Continue?

Zacks

JB Hunt Transport Services

+0.46%

Old Dominion Freight Line

+0.85%

A month has gone by since the last earnings report for Old Dominion Freight Line (ODFL). Shares have added about 13.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Old Dominion due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

In-Line Earnings at Old Dominion in Q3

Old Dominion Freight Line’s third-quarter 2024 earnings per share of $1.43 was in line with the Zacks Consensus Estimate but decreased 7.1% year over year. Revenues of $1.47 billion fell short of the Zacks Consensus Estimate of $1.51 billion and decreased 3% year over year. A 4.8% decrease in less-than-truckload (“LTL”) tons per day hurt results.

Revenues from LTL services came in at $1.46 billion, down 2.9% year over year. Segmental revenues were below our projection of $1.53 billion. Revenues from other services fell 6.5% to $13.1 million, which was just below our projection of $13.7 million.

In the quarter under review, LTL weight per shipment dipped 1.4% and LTL revenue per shipment inched up 0.1%. LTL shipments and LTL shipments per day were down 1.9% and 3.4%, respectively, on a year-over-year basis. LTL revenue per hundredweight increased 1.5%.

Total operating expenses remained flat at $1.07 billion. Operating income decreased 9.7% to $401.8 million.

Old Dominion exited the September quarter with cash and cash equivalents of $74.2 million compared with $433.8 million in 2023-end. Long-term debt at the end of the quarter was $40 million compared with $60 million at 2023-end. Capital expenditures were $242.8 million. The matric incurred in the reported quarter.

The company paid out dividends worth $168.2 million and repurchased its shares worth $824.8 million in the first nine months of the year. For 2024, ODFL anticipates total capital expenditures to be $750 million. Of the total, $350 million is anticipated to be invested in real estate and service center expansion projects, $325 million in tractors and trailers and $75 million in information technology and other assets.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -9.5% due to these changes.

VGM Scores

Currently, Old Dominion has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Old Dominion has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Old Dominion belongs to the Zacks Transportation - Truck industry. Another stock from the same industry, JB Hunt (JBHT), has gained 3.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.

JB Hunt reported revenues of $3.07 billion in the last reported quarter, representing a year-over-year change of -3%. EPS of $1.49 for the same period compares with $1.80 a year ago.

JB Hunt is expected to post earnings of $1.68 per share for the current quarter, representing a year-over-year change of +14.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for JB Hunt. Also, the stock has a VGM Score of B.

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Hasbro, Inc. Is Being Sued For Violating Securities Laws And Investors With Losses Are Encouraged To Reach Out To The Schall Law Firm

Reuters

Hasbro

+0.99%

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5 Stocks to Buy Before Tariffs Kick In

Netflix stock keeps ripping higher — why some analysts see more room to run

Netflix's 'complementary growth drivers'

Warren Buffett Claims To Not 'Time The Market,' But His Cash Horde Tells A Different Story

Levi & Korsinsky Announces The Filing Of A Securities Class Action On Behalf Of Hasbro, Inc. (Has) Shareholders

O'Reilly Automotive (ORLY) Up 0.4% Since Last Earnings Report: Can It Continue?

Old Dominion (ODFL) Up 13.9% Since Last Earnings Report: Can It Continue?

Hasbro, Inc. Is Being Sued For Violating Securities Laws And Investors With Losses Are Encouraged To Reach Out To The Schall Law Firm

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