Nauman Khan - Barchart - Mon Jun 17, 6:00AM CDT
The Nasdaq-100 Index ($IUXX) set new record highs as recently as June 14, peaking at 19,664 last Friday amid ongoing investor enthusiasm regarding artificial intelligence (AI) stocks. While Nvidia (NVDA) has become a standout growth story, and leads the index with a gain of 166.3% on a YTD basis, Big Tech names like Apple(AAPL) and Broadcom(AVGO) helped spark the latest leg higher in the Nasdaq-100's record-setting uptrend.
But while the index might be best known for its tech-heavy slant, there's much more to the Nasdaq-100 than just AI stocks. Technically, it's a collection of the 100 largest non-financial names on the Nasdaq. And when it comes to the two Nasdaq-100 stocks that analysts overwhelmingly agree on, AI doesn't really enter the picture.
First up, we have Coca-Cola Europacific Partners (CCEP), a dividend standout with 100% “Strong Buy” ratings. Next up is PDD Holdings (PDD), the parent company of Temu, which has garnered 92.3% “Strong Buys” amid breakout revenue growth. Here's a closer look at these top-rated names.
#1. Coca-Cola Europacific Partners
Founded in 2016, Coca-Cola Europacific Partners (CCEP) is a premier bottling company, engaged in the production, distribution, and marketing of Coca-Cola beverages across Europe and the Asia-Pacific region. The company, a result of the merger between Coca-Cola European Partners and Coca-Cola Amatil, operates in more than 29 countries and caters to a population of 300 million people throughout Europe. Thanks to its loyal customer base in the beverage space, it has established itself as one of the world's leading consumer goods companies.
Valued at $33.8 billion by market cap, CCEP shares have risen13.1% over the past year, compared to the Nasdaq-100'sgain of 31% during the same period. In terms of valuation, CCEP is currently trading at 17.35 times its earnings, making it relatively cheap compared to its peers.
CCEP also rewards its investors with a semi-annualdividend of $0.80 per share, resulting in a yield of 2.16%.
The bottler has delivered promising year over year sales growth, surging from $13.4 billion in 2019 to $19.8 billion in 2023 - up 47.7% for the period. Moreover, the company generated a solid operating cash flow of$3 billion in the fiscal year 2023, a testament to CCEP's efficient operations and growth.
In April, CCEP released a trading update regarding itsQ1 earnings. Total sales reached $5 billion, a 5.3% increase year over year. Similarly, volume grew by 8.1% in the European region.
CCEP's earnings per share (EPS) have also grown at a strong pace, roughly doubling from $2.06 in fiscal year 2020 to $4.01 in 2023. Analysts estimate that EPSwill grow to $4.15 for the full fiscal year 2024.
Overall, analysts are bullish about CCEP stock. All 10 analysts in coverage have given the stock a unanimous "strong buy" rating, with a mean price target of $78.44 and a high price target of $85. This suggests the stock has an upside potential of up to 14.7% from current levels.
#2. PDD Holdings
Based in Dublin, PDD Holdings (PDD) is a global commerce company recognized for its diverse portfolio of businesses. Its primary platform, Pinduoduo, offers a wide range of products, including agricultural produce, apparel, electronics, and household items, while Temu operates as a vibrant online marketplace. Committed to advancing digital integration for businesses and consumers, the company underwent a rebranding from Pinduoduo to PDD Holdings in February 2023.
With a substantial market cap of $205 billion, PDD stock has outperformed the market with a gain of over 607% in the last five years. The stock is up 89.4% over the past 52 weeks. This growth is primarily driven by the company's robust earnings results, which have consistently expanded, positioning PDD as one of the fastest-growing companies in the e-commerce sector.
For the quarter ended in March, PDD reported salesof $12 billion, marking a 131% surge year over year. Transaction revenue was up 327% to $6.1 billion, while non-GAAP net income jumped 202% to $4.23 billion, with EPS arriving at $2.83 per share - surpassing analysts' expectations by $1.40.
Beyond its exceptional financials, PDD Holdings shares currently trade at 12.64 times forward adjusted earnings, which is a discount to historical valuations, and points to a strong buying opportunity for investors.
Goldman Sachs recentlyupgraded PDD Holdings from “Neutral” to “Buy,” noting the company's exceptional performance in the recent quarter. Overall, Wall Street analysts have given PDD Holdings stock a consensus rating of “Strong Buy,” with 12 out of 13 analysts covering the stock giving it their top rating, and 1 more suggesting “Moderate Buy.”
The mean price target for PDD is $192.87, about 29.5% higher than current prices.
On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
