Wall Street is suffering from volatility in the first quarter of 2025. Out of the three large-cap indexes, the S&P 500 and the Nasdaq Composite are in negative territory year to date, while the Dow has remained almost flat. The small-cap benchmarks — the Russell 2000 and the S&P 600 — are also in the negative zone year to date. Similarly, the mid-cap-specific S&P 400 index is also in the red.
Despite this headwind, a handful of mid-cap stocks with a top Zacks Rank is set for solid returns in the short term. Five such stocks are Brinker International Inc. EAT, Mattel Inc. MAT, Century Aluminum Co. CENX, SkyWest Inc. SKYW and ANI Pharmaceuticals Inc. ANIP.
Why Mid-Cap Stocks
Investment in mid-cap stocks is often recognized as a good portfolio diversification strategy. These stocks combine the attractive attributes of both small and large-cap stocks. Top-ranked, mid-cap stocks have a high potential to enhance their profitability, productivity and market share. These may also become large caps over time.
If economic growth slows down due to any unforeseen internal or external disturbance, mid-cap stocks will be less susceptible to losses than their large-cap counterparts owing to their lower international exposure.
On the other hand, if the economy continues to thrive, these stocks will gain more than small caps due to established management teams, a broad distribution network, brand recognition and ready access to the capital markets.
Buy 5 Mid-Cap Stocks for Sparkling Returns
These stocks have strong revenues and earnings growth potential for 2025. Moreover, these stocks have seen positive earnings estimate revisions over the last 60 days. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Zacks Investment Research
Image Source: Zacks Investment Research
Brinker International Inc.
Brinker International is benefiting from increased menu pricing, effective marketing strategies and traffic-driving initiatives. Also, focus on menu adjustments bodes well. EAT intends to focus on balancing value offerings with margin expansion and adaptability to changing consumer preferences to drive growth.
For 2025, EAT will look for more ways to offer convenience, value, and a great guest experience by doubling its pipeline of new restaurant openings and expanding its portfolio of brands. Also, EAT’s focus on digitalization and remodeling initiatives bode well.
Impressive Price Upside Potential for EAT Stock
Brinker International has an expected revenue and earnings growth rate of 18.7% and more than 100%, respectively, for the current year (ending June 2025). The Zacks Consensus Estimate for current-year earnings has improved 39.3% over the last 60 days.
The average short-term price target of brokerage firms represents an increase of 20.8% from the last closing price of $154.15. The brokerage target price is currently in the range of $140 to $215. This indicates a maximum upside of 39.6% and a downside of 9.1%.
Mattel Inc.
Mattel is benefiting from the Optimizing for Profitable Growth program and strong demand for Hot Wheels. This and strategic initiatives toward capturing the full value of its IPs and transforming itself into a high-performing toy company bode well. Furthermore, MAT is simplifying its organization structure, optimizing processes and supply chain to generate savings across operations.
MAT expects to realize incremental benefits from the upcoming digital content in 2025. MAT anticipates the toy segment to grow in the future on the back of new product innovations, increased retail support, enhanced marketing and promotions and fresh content.
Excellent Price Upside Potential for MAT Shares
Mattel has an expected revenue and earnings growth rate of 1.4% and 4.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.3% over the last 60 days.
The average short-term price target of brokerage firms represents an increase of 28.3% from the last closing price of $20.17. The brokerage target price is currently in the range of $21 to $30. This indicates a maximum upside of 48.7% and no downside.
Century Aluminum Co.
Century Aluminum is well-placed to gain from the rise in global demand for aluminum. Aluminum demand is expected to continue to increase, particularly in automotive and renewable energy applications. CENX is implementing cost-reduction measures, leading to a favorable EBITDA impact.
Anticipating a surge in global aluminum demand, particularly in the Western market due to robust manufacturing activities, CENX is committed to enhancing operational efficiency. With the Jamalco buyout, CENX has solidified its raw material supply chain and unlocked opportunities for value expansion through capital and operational improvements.
Lucrative Price Upside Potential for CENX Stock
Century Aluminum has an expected revenue and earnings growth rate of 17.3% and 14%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 35.9% over the last 30 days.
The average short-term price target of brokerage firms represents an increase of 29.4% from the last closing price of $18.91. The brokerage target price is currently in the range of $22 to $27. This indicates a maximum upside of 42.8% and no downside.
SkyWest Inc.
SkyWest’s shareholder-friendly approach, including share buybacks boosts investor confidence and positively impacts the company's bottom line. SKYW’s fleet-modernization efforts are commendable. SKYW has fleet-related agreements with other airline heavyweights like United Airlines and Alaska Airlines. By 2026-end, SKYW is scheduled to operate 278 E175 aircraft.
We believe that the positives surrounding SKYW stock outweigh the concerns of higher operating expenses and high debt. We therefore encourage investors to add SKYW stock to their portfolios for healthy returns.
Huge Price Upside Potential for SKYW Shares
SkyWest has an expected revenue and earnings growth rate of 8.2% and 16%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.6% over the last 60 days.
The average short-term price target of brokerage firms represents an increase of 41.4% from the last closing price of $95.59. The brokerage target price is currently in the range of $100 to $150. This indicates a maximum upside of 56.9% and no downside.
ANI Pharmaceuticals Inc.
ANI Pharmaceuticals is a specialty pharmaceutical company. ANIP is engaged in developing, manufacturing and marketing branded and generic prescription pharmaceuticals. ANIP offers liquid, powder, oral solid dose, cough/cold products, antacids, laxatives, stomach remedies as well as hydrocortisone retention enema, esterified estrogen and methyltestosterone, fluvoxamine maleate tablets, hydrocortisone rectal suspension, metoclopramide oral solution, opium tincture and metoclopramide tablets.
In addition, ANIP offers contract manufacturing services for other pharmaceutical companies. ANIP serves through wholesalers, smaller regional distributors and chains and pharmacy and retail outlets primarily in the United States.
Attractive Price Upside Potential for ANIP Shares
ANI Pharmaceuticals has an expected revenue and earnings growth rate of 25% and 22.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 14.6% over the last 30 days.
The average short-term price target of brokerage firms represents an increase of 26.8% from the last closing price of $65.98. The brokerage target price is currently in the range of $62 to $94. This indicates a maximum upside of 42.4% and a downside of 1.5%.
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