Investors often gravitate towards large-cap stocks due to their stability and history of success. These stocks, while not as volatile as small-caps, are known for their reliability and are often associated with dividends.

While large-caps are generally favored by conservative investors, there are still opportunities for growth. Three large-cap stocks – Arista Networks, Target, and Cardinal Health – are particularly promising, each boasting a favorable Zacks Rank.

The AI Frenzy and Arista Networks

Arista Networks has seen its stocks thrive amid the AI frenzy. The company offers network switches to hyperscalers, facilitating faster communication between computer servers. With a Zacks Rank #2 (Buy), Arista Networks has seen positive earnings estimate revisions.

The company is anticipated to experience substantial growth, with consensus estimates predicting a 43% increase in earnings and a 33% rise in sales for the current fiscal year. Projections for FY24 suggest an additional 10% boost in earnings and an 11% increase in revenue.

Target’s Evolution and Growth Prospects

Target has transitioned from a traditional brick-and-mortar retailer to an omni-channel enterprise. With a Zacks Rank #2 (Buy) and increasing earnings estimates, Target is poised for significant profitability improvement in the current fiscal year, expecting a 40% growth in earnings. Additionally, the stock offers an attractive dividend yield of 3.1% and has demonstrated a robust 15% five-year annualized dividend growth rate.

Cardinal Health’s Strong Position in the Market

As a national drug distributor and service provider to pharmacies and healthcare entities, Cardinal Health holds a Zacks Rank #2 (Buy) and has witnessed a notable upward trend in earnings revisions for the current fiscal year. Earnings estimates anticipate a 20% growth on a 10% increase in sales. Furthermore, projections for FY25 indicate a 12% rise in earnings and an 8% growth in revenue.

Cardinal Health has consistently outperformed expectations, surpassing both earnings and revenue projections in its last five releases.

Conclusion

Investors Eye Three Promising Large-Cap Stocks for Growth Potential

Large-cap companies have long been fixtures in investment portfolios, prized for their stability and proven track records.

For investors seeking large-cap exposure, Target Corporation (TGT), Cardinal Health, Inc. (CAH), and Arista Networks, Inc. (ANET) are all worth considering, as they each exhibit improved earnings outlooks.

The Appeal of Large Caps

Large-cap equities are like the majestic redwoods of the investment world – sturdy, resilient, and deeply rooted. While small-cap stocks may show promising growth potential, large caps offer a sense of reassurance and dependability with their established market presence and solid financial history.

Promising Options for Investors

Within the large-cap segment, Target Corporation (TGT) stands out as a retail stalwart, offering investors exposure to the consumer market. Cardinal Health, Inc. (CAH) represents a compelling choice within the healthcare sector, while Arista Networks, Inc. (ANET) provides an appealing option in the technology space.

Rationale for Consideration

Target Corporation’s strategic initiatives, bolstered by its strong online sales and operational efficiency, present an optimistic outlook for earnings growth. Cardinal Health, Inc.’s role in the healthcare supply chain positions the company favorably in the current market environment, while Arista Networks, Inc. benefits from the increasing demand for network infrastructure solutions in an era driven by digital transformation.

The Quest for Growth

As investors chase growth opportunities, the prospect of identifying undervalued large-cap companies with the potential for substantial earnings expansion becomes more alluring. The allure intensifies with the promise of stocks poised to more than double, as exemplified by the recent surge of the Boston Beer Company and NVIDIA.

Within this context, Zacks Investment Research has identified a lesser-known chemical company with a robust year-over-year performance and promising future prospects. This compelling narrative, fortified by soaring 2022 earnings estimates and an impressive share repurchase program, adds intrigue to large-cap investments. Could this be the next hidden gem set to rival – or even surpass – the phenomenal growth of companies like Boston Beer and NVIDIA?