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Panasonic (PCRFY) Surges 39.6% YTD: Will the Uptrend Continue?

Panasonic PCRFY has witnessed healthy momentum so far this year. Shares of the company have gained 39.6% year to date compared with the sub-industry’s growth of 6.9%.

The company is a leader in the development and manufacture of electronic products for a wide range of consumer, business and industrial needs. The company also offers a wide array of products and services like automotive and avionics systems, industrial systems, etc.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Catalysts Behind the Price Surge

Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #3 (Hold) stock.

The company benefits from increased demand for its Automotive Batteries, Automotive and Connect business segments. The Automotive segment benefited from a recovery in automobile production. However, the company expects semiconductor shortage and economic uncertainties to act as headwinds.

Recently, the company has entered into a non-binding memorandum of understanding with FPX Nickel Corp for the vertical integration of nickel production and to achieve further decarbonization.

The Lifestyle business segment is likely to benefit from solid demand for its HVAC system, electrical construction materials in overseas markets and A2W products in Europe. Increased sales in Avionics and Blue Yonder, along with recovery in the aviation industry and robust demand for rugged mobile terminals and notebook PCs, are major tailwinds for the Connect business segment.

In the first quarter, the company signed a contract with Hexagon Purus ASA to supply automotive batteries for commercial vehicles in North America. Also, a medium-term to long-term relationship between Panasonic Energy and Mazda Motor Corporation is discussed to address the market's growing need for battery-powered vehicles and automobile batteries.

Panasonic’s 2024 and 2025 earnings are anticipated to rise 19.1% and 4% year over year, respectively. The company expects 2024 earnings to reach ¥460 billion compared with the year-ago earnings of ¥265 billion.

Panasonic outpaced estimates in three of the trailing four quarters, delivering an earnings surprise of 438.8%, on average.

Apart from its solid fundamentals, the company is prone to several risks. The company’s performance is likely to be affected due to prevailing global macroeconomic uncertainties and rising inflation.

Stocks to Consider

Some better-ranked stocks in the broader technology space are Asure Software ASUR, Aspen Technology AZPN and Badger Meter BMI. Asure Software presently sports a Zacks Rank #1 (Strong Buy), whereas Badger Meter and Aspen Technology currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Asure Software’s 2023 earnings per share (EPS) has increased 35% in the past 60 days to 54 cents.

Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 676.4%. Shares of ASUR have surged 59.1% in the past year.

The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has increased 6.8% in the past 60 days to $6.58.

Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have declined 17.1% in the past year.

The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 1.4% in the past 60 days to $2.86.

Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 58.8% in the past year.

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Asure Software Inc (ASUR) : Free Stock Analysis Report

Aspen Technology, Inc. (AZPN) : Free Stock Analysis Report

Panasonic Corp. (PCRFY) : Free Stock Analysis Report

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