The Magnificent 7 are arguably the most popular stocks in the market. And with the S&P 500 showing signs of recovery - at least for the meantime - you can expect these seven market leaders to drive the rally. But here’s the thing: Nvidia, Microsoft, Apple, Amazon, Tesla, Alphabet, and Meta may be at the top, but some of them are more attractive than others, at least in terms of valuations. More News from Barchart So which one is the “cheapest” right now? And what option strategy would work with it? Let’ ...

Core Insights - L Brands is set to announce its quarterly earnings on November 12, 2025, with analysts predicting an EPS of $0.70 and revenue around $50.3 million [1][5] Financial Metrics - The company has a high price-to-earnings (P/E) ratio of 95.76, indicating that investors are paying $95.76 for each dollar of earnings, reflecting high growth expectations [2][5] - The price-to-sales ratio stands at 36.69, suggesting that the market values L Brands' sales significantly, at 36.69 times its revenue [2] - L Brands' enterprise value to sales ratio is 38.93, providing insight into how the market values the company's overall worth relative to its sales [3] - The enterprise value to operating cash flow ratio is 69.52, indicating how much investors are paying for the company's cash flow from operations [3] - The earnings yield is 1.04%, representing the return on investment, which is the inverse of the P/E ratio [4] - A debt-to-equity ratio of 1.39 shows that L Brands uses $1.39 of debt for every dollar of equity, highlighting its reliance on debt financing [4] - The current ratio of 4.26 indicates a strong liquidity position, with $4.26 in current assets for every dollar of current liabilities, ensuring the company can meet its short-term obligations [4][5]

Core Insights - lululemon athletica inc. (LULU) shares have experienced a significant decline, losing 56.1% year-to-date, underperforming both the Zacks Textile – Apparel industry and the broader Zacks Consumer Discretionary sector [6][7][24] - The stock has fallen below its 50-day and 200-day simple moving averages (SMA), indicating a bearish sentiment and a long-term downward trend [1][9][24] - The company has cut its fiscal year 2025 guidance due to sluggish U.S. demand and increased tariff-related costs, leading to a cautious outlook from analysts [9][14][25] Performance Metrics - LULU's stock closed at $170.30 on October 29, 2025, below the 50-day SMA of $178.55 [1] - The stock is currently trading 1.1% above its 52-week low of $159.25 and 60.3% below its 52-week high of $423.32 [10] - The company anticipates net revenues of $10.85-$11 billion for fiscal 2025, reflecting a 2-4% year-over-year growth [14] Competitive Landscape - LULU's performance is notably weaker than its competitor NIKE Inc., which has declined 14.3% year-to-date, and other competitors like Gildan Activewear and Ralph Lauren, which have seen growth of 25.1% and 39.8%, respectively [7][24] - The current forward 12-month price-to-earnings (P/E) multiple for LULU is 12.92X, lower than the industry average of 16.13X and the S&P 500's average of 24.03X, indicating a relatively cheap valuation [20][21] Financial Outlook - Analysts have revised down earnings estimates for LULU, reflecting skepticism about the company's near-term growth potential [18] - For fiscal 2025, the Zacks Consensus Estimate suggests a revenue growth of 3.7% year-over-year, while EPS is expected to decline by 11.8% [19] - Management expects a decline in operating margin by 390 basis points for fiscal 2025 due to tariff pressures and markdowns [13] Strategic Initiatives - The company is undergoing a reset phase, aiming to rebalance its merchandise mix and accelerate innovation, with plans to increase the share of new styles from 23% to 35% by spring 2026 [16] - Despite strong international performance, particularly in China, the execution gap in the U.S. market and margin pressures are contributing to the stock's decline [16][24]

Core Insights - Eagle Materials Inc. reported earnings per share (EPS) of $8.72, significantly exceeding the estimated EPS of $4.35 [1][5] - The company's revenue for the quarter ending in September 2025 was approximately $638.9 million, surpassing the estimated $635.5 million, and representing a 2.5% year-over-year increase [2][5] Financial Metrics - The price-to-earnings (P/E) ratio of Eagle Materials Inc. is approximately 11.93, indicating the market's valuation of its earnings [3][5] - The price-to-sales ratio stands at about 3.08, reflecting the market's valuation of its revenue [3] - The enterprise value to sales ratio is around 3.39, suggesting how the market values the company's total value in relation to its sales [3] Debt and Liquidity - The company's debt-to-equity ratio is approximately 0.50, indicating a moderate level of debt relative to its equity [4] - The current ratio is about 2.72, demonstrating the company's ability to cover its short-term liabilities with its short-term assets [4]

Core Insights - Nucor Corporation is a leading player in the steel manufacturing industry, producing a diverse range of steel products across North America [1] - The company is set to report quarterly earnings on October 27, 2025, with analysts estimating an EPS of $2.16, reflecting a 45% year-over-year increase [2][6] - Projected revenue for the upcoming quarter is approximately $8.15 billion, indicating a 9.7% rise year-over-year [2][6] Financial Metrics - The consensus EPS estimate has been revised upward by 1.4% over the past month, suggesting positive analyst sentiment [3] - Nucor's P/E ratio is approximately 24.64, indicating favorable market valuation of its earnings [4] - The price-to-sales ratio stands at about 1.03, showing that investors are willing to pay slightly more than one times the company's sales [4] - The enterprise value to sales ratio is around 1.19, reflecting the company's total valuation relative to its sales [4] Debt and Liquidity - Nucor maintains a low debt-to-equity ratio of 0.34, indicating a relatively low level of debt compared to its equity [5] - The company has a strong current ratio of approximately 2.83, demonstrating its ability to cover short-term liabilities with short-term assets [5]

Core Viewpoint - Marsh & McLennan Companies, Inc. (MMC) is expected to report strong quarterly earnings, with significant year-over-year growth in both earnings per share (EPS) and revenue, driven by its Risk and Insurance Services and Consulting segments [2][3][6] Financial Performance - The anticipated EPS for the upcoming quarter is $1.79 according to Wall Street estimates, with a slightly higher Zacks Consensus Estimate of $1.80, representing a 10.4% increase from the previous year [2][6] - Projected revenue for the quarter is approximately $6.31 billion, with Zacks estimating $6.3 billion, indicating an 11.1% year-over-year growth [2][6] - The company's full-year revenue estimate stands at $27 billion, reflecting confidence in its business model despite potential challenges from higher operating and interest expenses [3] Market Position and Metrics - MMC has a price-to-earnings (P/E) ratio of approximately 24.68, indicating strong investor confidence [5][6] - The price-to-sales ratio is about 3.94, and the enterprise value to sales ratio is around 4.72, reflecting its market value relative to sales [5] - The debt-to-equity ratio of 1.37 suggests moderate debt usage, while a current ratio of 1.20 indicates a solid ability to cover short-term liabilities [5] Analyst Sentiment - Analysts have slightly revised the consensus EPS estimate upwards by 0.1% over the past 30 days, suggesting potential investor optimism [4] - The actual earnings compared to these estimates will be crucial in determining the stock's near-term trajectory [4]

Core Viewpoint - Home Depot presents a more compelling investment opportunity compared to Lowe's due to its larger market presence, better growth potential, and favorable capital allocation strategy [1][2]. Group 1: Market Presence - Home Depot has a significantly larger store count with 2,347 stores generating $159.5 billion in sales, compared to Lowe's 1,748 stores and $83.7 billion in sales [3]. - Home Depot's same-store sales increased by 1.4% in the second quarter, while Lowe's saw a 1.1% increase, indicating stronger customer engagement despite a general slowdown in home improvement projects [4]. Group 2: Customer Base Expansion - Home Depot has invested heavily in expanding its customer base, particularly targeting professional contractors through dedicated sales forces and loyalty programs [6]. - Recent acquisitions, such as SRS and GMS, are aimed at enhancing product offerings for professional customers, which is expected to drive long-term sales growth [7][8]. Group 3: Return on Capital - Home Depot's capital allocation policy prioritizes business investment, share repurchases, and dividends, leading to a return on invested capital (ROIC) of 27.2% for the last 12 months [9][10]. - Although Lowe's has a higher ROIC of 29.5%, Home Depot's historical ROIC was significantly higher at 44.6% in 2022, suggesting potential for recovery and growth in a favorable market environment [10][11]. Group 4: Valuation and Growth Expectations - The market has higher growth expectations for Home Depot, reflected in its price-to-earnings (P/E) ratio of 27 compared to Lowe's 20, indicating that the higher valuation for Home Depot is justified given its long-term prospects [12].

Core Insights - General Mills reported an earnings per share (EPS) of $0.86, exceeding the estimated $0.81, with revenue of approximately $4.52 billion, slightly above estimates [1][2] Financial Performance - The company exceeded quarterly sales estimates due to increased demand following strategic price cuts on select products, maintaining annual forecasts [2] - General Mills has a price-to-earnings (P/E) ratio of approximately 11.89, a price-to-sales ratio of about 1.38, an enterprise value to sales ratio of around 2.15, and an enterprise value to operating cash flow ratio of approximately 14.33 [3] Financial Metrics - The earnings yield stands at 8.41%, indicating earnings relative to share price [4] - The debt-to-equity ratio is about 1.66, suggesting a higher level of debt compared to equity, while the current ratio is approximately 0.67, indicating the ability to cover short-term liabilities with short-term assets [4]

Group 1: Inflation Impact on Retail - Inflation has been a significant issue for consumers in recent years, with rates hitting 2.7% as of June [3][5] - Historical data shows that the S&P 500 performs best when inflation is between 2% and 3%, with higher inflation potentially leading to increased interest rates that can negatively impact stock valuations [2] - Costco Wholesale, a leading big-box retailer, has seen its stock return over 200% in the past five years, outperforming the broader market [3][6] Group 2: Costco's Business Model - Costco operates on razor-thin margins, primarily generating profits from membership fees rather than product sales [4] - As one of the largest retailers, Costco can source goods at lower costs, allowing it to maintain competitive pricing even during inflationary periods [5] - The company attracts consumers looking for deals, but excessive inflation could still negatively affect sales, particularly of discretionary items [5][6] Group 3: Financial Performance and Valuation - Costco's sales for July 2025 reached $20.89 billion, reflecting an 8.5% increase from the previous year [6] - The company's price-to-earnings (P/E) ratio has increased from about 40 five years ago to 55 today, indicating a significant rise in valuation [8] - Analysts project Costco's earnings will grow at an annualized rate of 9% over the next three to five years, resulting in a PEG ratio of approximately 6.0, suggesting the stock may be overvalued relative to its growth potential [10] Group 4: Future Outlook - The stock's current valuation may lead to a reversion towards long-term norms, especially if inflation continues to rise and discretionary spending is squeezed [12] - Despite concerns about short-term prospects, Costco is expected to remain a strong business in the long term [13]

Core Insights - The stock market has experienced significant volatility in 2025, with notable declines followed by a strong bull market, raising concerns about high valuations [2][3][19] - The market cap-to-GDP ratio, known as the "Buffett Indicator," has reached unprecedented levels, indicating that the stock market is more expensive than ever before, surpassing previous peaks during the Dot Com Bubble and the Global Financial Crisis [10][11][12] Valuation Metrics - The traditional price-to-earnings (P/E) ratio is commonly used for stock valuation, but it may not be as effective during recessions or for growth stocks [7][8] - The Buffett Indicator, which compares the total market capitalization of publicly traded companies to U.S. GDP, has recently exceeded 213%, representing a 151% premium over its historical average of 85% since 1970 [9][11] Historical Context - Historical data shows that when the Buffett Indicator reaches new highs, it is often followed by significant market pullbacks, as seen in previous instances leading to bear markets [12][13] - Warren Buffett has been a net seller of stocks for ten consecutive quarters, totaling $174.4 billion, indicating a cautious approach to current market valuations [14] Market Cycles - The average U.S. recession lasts about 10 months, while economic expansions typically last around five years, suggesting that market downturns are often short-lived [18][21] - Despite high valuations, historical trends indicate that major indices like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average tend to rise over long-term periods [22]