In the midst of recent disappointing economic data, the metals sector is emerging as a potential breakout story. Despite the challenges faced by the U.S. economy, there is optimism surrounding the manufacturing industry, particularly in the primary metals and nonmetallic products used in construction.
Investors are advised to focus on stocks with double-digit earnings per share (EPS) growth potential. Alcoa Co. (NYSE: AA), ATI Inc. (NYSE: ATI), and ArcelorMittal (NYSE: MT) are three stocks that stand out in terms of bullish price action and EPS projections justifying their premium valuations.
Analysts predict a potential breakout in the U.S. manufacturing sector, provided the Federal Reserve cuts interest rates. Lower rates could result in a weaker dollar, making American exports more attractive to foreign markets. This could lead to an increase in production and economic value for the sector.
Alcoa, a company heavily reliant on the aerospace industry, is expected to see significant growth with Boeing potentially on the brink of a comeback. ATI, known for its products in automotive and construction industries, also has strong earnings growth potential. ArcelorMittal, serving the appliances manufacturing supply chain and construction industries, is projected to experience substantial EPS growth.
Overall, these three metal stocks are positioned for double-digit growth in the coming year, making them attractive investment opportunities in the current economic climate.