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Quite a few stocks stand out after exceeding Q2 earnings expectations this week with several sporting a Zacks Rank #2 (Buy) following their favorable quarterly reports.

Furthermore, here’s a look at two of these buy-rated stocks that investors shouldn’t overlook after beating EPS estimates on Wednesday.

Alcoa (AA - Free Report)
 

Integrated aluminum producer and bauxite miner Alcoa is appealing among the industrial products sector after Q2 EPS of $0.16 comfortably topped estimates of $0.11 per share. More importantly, this climbed from an adjusted loss of -$0.35 a share in the comparative quarter.

Alcoa’s profitability program appears to be paying off and Q2 sales rose 8% to $2.9 billion despite slightly missing estimates of $2.96 billion. Still, another catalyst to Alcoa’s increased profitability has been higher aluminum prices with it noteworthy that the Zacks Metal Products-Distribution Industry is currently in the top 13% of approximately 250 Zacks industries.

This comes as Alcoa’s annual earnings are now expected to soar to $2.20 per share in fiscal 2024 compared to an adjusted loss of -$2.27 a share last year. Plus, FY25 EPS is projected to climb another 57% and Alcoa’s stock trades at a reasonable 16.7X forward earnings multiple as one the world’s largest aluminum producers.

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Discover Financial Services (DFS - Free Report)
 

Standing out in the finance sector is Discover Financial Services as its stock is starting to check the boxes with an overall “A” VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum.

To that point, Discover’s Q2 EPS of $6.06 soared 71% from the prior year quarter and crushed estimates of $3.06 per share by 98%. The credit card and consumer loan giant also beat top line estimates by 9% with Q2 sales at $4.53 billion which was a 17% spike from sales of $3.87 billion a year ago.

Notably, Discover’s stock has soared +27% this year to outperform its Zacks Financial-Consumer Loans Market’s +19% and the S&P 500’s +16%. More intriguing is that DFS still trades at 12.1X forward earnings which is a slight premium to its industry average of 9.5X but well below the benchmark’s 23.4X.

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Bottom Line
 

Considering their reasonable valuations, the growth Alcoa and Discover Financial Services experienced during Q2 is very compelling and suggests there should be more short-term upside in these stocks with both being viable long-term investments as well.

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