Stocks to Consider as Market Reacts to New Tariffs

Stocks to Consider: With rising tariffs on Canada, Mexico, and China, investor sentiment has been affected. However, KLA Corp. and others show promise with high ROE, potentially cushioning the blow in uncertain times.

Date: 05-03-2025

AI Rating: 6

Market Overview

The recent announcement of tariffs by President Trump has created a significant shockwave in broader equity markets, leading to a downtrend. Investors are facing uncertainties, particularly due to the implications of the 25% levy on imports from Canada and Mexico and an additional 10% tariff on China.

This immediate impact on market sentiment could influence stock prices negatively in the short term. However, not all companies are equally affected, particularly those identified as having strong financial metrics.

Return on Equity (ROE)

The analysis highlights several companies, namely KLA Corp., Leidos Holdings, Raymond James Financial, Fortinet, and Pilgrim's Pride, that exhibit high ROE. This financial metric is crucial as it helps to determine how efficiently a company is utilizing its equity to generate profits.

For instance, KLA Corporation has demonstrated a long-term earnings growth expectation of 15.6% and a trailing four-quarter earnings surprise of 6.4% on average, which suggests robust operational performance that can attract investor interest even amid broader market challenges.

Likewise, Leidos Holdings has a healthy earnings growth expectation of 7.4% and an impressive earnings surprise of 28.3% over the trailing four quarters. This points toward effective management practices that may result in an increasing stock price despite overarching economic concerns.

Raymond James portrays a strong earnings growth expectation of 15.4% while Fortinet's expectation stands at 13% with a significant earnings surprise of 24.8%. Pilgrim's Pride boasts a remarkable trailing four-quarter earnings surprise of 25.7%, signaling strong market positioning and operational efficiency.

Given these positive indicators, companies with high ROE may potentially navigate through the current turbulent environment better than their peers.

Stocks: KLAC LDOS RJF FTNT PPC