By Ian Salisbury
It's been a great stretch for foreign stocks. There are plenty of U.S. stocks poised to ride the wave.
After years of lagging behind the U.S., international stocks have leapt ahead in recent months. In the past year, international stocks have returned 35%, more than double the 14% returns for the S&P 500.
Investors can thank the European Central Bank's dovish interest-rate policy and the weakening dollar, which has fallen nearly 7% in the past year. A weak greenback boosts the value of foreign-currency profits and stock prices when they are translated back into dollars for U.S. investors.
The trend is also likely to benefit U.S. companies that derive a majority of their business overseas, notes Ryan Detrick, chief market strategist at Carson Group.
As markets gear up to see fourth-quarter results over the next few weeks, companies with half their revenue coming from outside the U.S. are expected to deliver 12.5% earnings growth, he noted Sunday on X. That compares with just 8.2% for the broad market, and 5.5% for companies that do a majority of their business in the U.S.
There are 120 S&P 500 stocks that report a majority of their sales as foreign, according to FactSet. Just over 40 of them are forecast to deliver double-digit earnings growth over the next two years.
The list includes some big names such as Apple, Netflix, Broadcom, GE Aerospace and Visa. Netflix has struggled recently, with shares down more than 25% in the past six months, in large part thanks to investors' doubts about its $83 billion offer for Warner Bros. in December.
But the selloff may be a buying opportunity. Netflix earnings are still expected to grow more than 20% in both 2026 and 2027. The Warner Bros.' imbroglio has helped knock its forward price-to-earnings ratio from a high of more than 47 last summer to around 27 today. Its sales are about 59% foreign, 41% U.S., according to FactSet.
On Monday, Netflix shares were raised to Accumulate from Sell by Helena Wang, an analyst at the Singapore-based PhillipCapital. Her $100 price target, up from $95, represents a 16% upside from Netflix's current price of around $86.
Investors looking for internationally-focused stocks outside the sphere of megacaps should check out beauty company Estée Lauder; glass and ceramics company Corning; financial-services provider MSCI; or hard-drive maker Western Digital.
Corning, which recently committed a large $1.5 billion bet on a new plant to produce solar panel components, has seen shares nearly double in the past year. Still the stock has plenty of growth potential. Analysts forecast earnings to grow about 20% in both 2026 and 2027. About two-thirds of its sales are foreign, according to FactSet data. Corning trades at about 26 times 2027 earnings.
Write to Ian Salisbury at ian.salisbury@barrons.com
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(END) Dow Jones Newswires
January 26, 2026 15:03 ET (20:03 GMT)
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