After experiencing difficult periods of late, I’m looking at whether shares in Centrica PLC (LON:CNA) (CNA.L), easyJet plc (LON:EZJ) (EZJ.L), AstraZeneca plc (LON:AZN) (AZN.L) and Imperial Brands PLC (LON:IMB) (IMB.L) can deliver successful recoveries.
AstraZeneca appears to be on track to deliver improving performance over the medium term. Its aggressive acquisition programme of the last few years is due to yield a return to positive EPS growth in the next financial year.
With further acquisition potential due to what seems to be a strong balance sheet and solid free cash flow, AstraZeneca could be a strong performer in my view.
Imperial Brands is a company that I feel is significantly underrated by the stock market. It has a dividend yield that is around 7%, and this suggests that it may offer a large margin of safety.
The growth prospects within next generation products appears to be significant. Imperial Brands has a strong position within this area and this may be a strong catalyst in future years. Therefore, as someone who is optimistic about the overall prospects for tobacco stocks, I’m upbeat about its turnaround potential.
Centrica may seem to be a company experiencing a difficult period. However, it has the potential to deliver a strong turnaround in my view. The changes it is making to its business model could lead to a more efficient and robust operation in the long run.
Sure, there are risks ahead from underperformance in parts of its business, as well as political and regulatory challenges. However, with a 7%+ dividend yield, I feel that Centrica is cheap at the moment.
easyJet has been able to generate improving levels of passenger numbers in recent periods. They are due to lead to a stronger financial performance by the company over the medium term.
This could catalyse investor sentiment at a time when the company’s shares have a PEG ratio of around 0.8. Although the prospects for the airline industry could keep easyJet’s share price progress pegged back in the near term, in the long run it seems to offer upside potential.