Apple CEO Tim Cook speaks during the annual Worldwide Developers Conference in San Jose, California, June 6, 2022.
Petr Dasilva | Reuters
Using market declines to accumulate stocks of companies with strong fundamentals and prospects can lead to good returns when the market rises. For this purpose, it can be a good practice to keep track of which stocks are recommended by analysts.
Here are five stocks selected by the top Wall Street analysts according to TipRanks, a service that ranks analysts based on the performance of their ratings.
Micron (IN) strives to be the most efficient and innovative global semiconductor memory solutions provider. Growing demand for memory chips from cloud computing providers, along with the rapid expansion of 5G cellular networks and the Internet of Things, is driving the company’s growth.
However, the company’s near term appears to be uneven, with weak demand in the PC and smartphone markets. Additionally, supply constraints for certain components are expected to hurt bit supplies for a period of time. (See Micron Dividend Date & History on TipRanks)
Last week, the company’s fiscal 2022 fourth quarter painted a dull picture of its development. However, Goldman Sachs analyst Toshiya Hari did not budge from his bullish stance. The analyst was “encouraged by Micron’s supply-side response,” which included the company’s cost-cutting strategy. In particular, Micron is working to reduce its FY23 capital expenditures (CapEx) by about 30% year-over-year (that’s about $4.1 billion).
That said, the company also said it will double its construction investment and take other strategic steps to slow the growth of some DRAM and NAND processes. However, these steps will ensure smoother long-term growth. “From our point of view, we believe that these actions will highlight Microncommitment to make difficult decisions to maintain profitability and shareholder returns, and based on our previous conversations is likely to be well received by investors,” Hari noted, reiterating a Buy rating on MU shares. Taking into account short-term headwinds, although the analyst lowered the price target from $63 to $62.
Ranked #318 out of nearly 8,000 analysts tracked on TipRanks, Hari has earned profitable ratings 57% of the time. Additionally, each of its ratings has earned an average return of 16.3% over the past year.
Amazon (AMZN) benefits from solid Prime momentum thanks to fast delivery and a strong content portfolio. In addition, the company’s cloud dominance is continuously strengthened by the high adoption rate of AWS. Most importantly, the company’s strong global presence and unwavering customer focus remain its biggest selling points. (See Amazon Stock Investors on TipRanks)
Amazon is holding a Prime Early Access Sale next week, ahead of which Monness Crespi Hardt analyst Brian White is bullish. The analyst believes sales ahead of the holiday season will boost Prime’s value and also benefit customers who are struggling with high spending.
In an effort to improve its Prime platform, Amazon also offered its US Prime members a free one-year Grubhub+ membership. The company has also invested significantly in improving its content portfolio in recent months. Moreover, White believes this Amazon’acquisition of MGM Holdings.
Additionally, looking at Amazon’s reinvestment back into the business, White believes the company’s current profitability is well below its long-term potential. Needless to say, the analyst reiterated a buy rating on the stock with a price target of $172.
“We believe the company’s long-term growth path is attractive across e-commerce, AWS, digital media, advertising, Alexa, robotics, artificial intelligence and more,” White explained his exuberance.
White comes 491Holy among nearly 8,000 analysts tracked on TipRanks. Notably, 56% of its evaluations have been successful, each generating an average return of 10.10%.
apple (AAPL) is struggling to overcome slowing demand and rising costs. Its consistent and compelling product launch moves the brand forward in an increasingly uncertain environment.
In that context, Tigress Financial Partners analyst Ivan Feinseth didn’t seem too concerned about the near-term threats facing the company. The analyst recently maintained his Buy rating on AAPL stock, believing that “continued innovation, new product launches and increasing service revenue will continue to drive long-term shareholder value creation.”
Feinseth also thinks the stock’s recent decline due to weak demand for Apple devices is a major buying opportunity. (See Apple Hedge Fund Trading Activity on TipRanks)
The analyst points out that CarPlay for vehicles is a testament to its automotive expansion and integration, which could be a major driver of growth. In addition, Feinseth is also looking forward to launching a virtual reality headset later this year or early 2023. The analyst believes the launch can “drive another paradigm shift for AAPL’s services and ecosystem.”
Additionally, the company’s balance sheet and cash flow are strong enough to allow Apple to continue its growth initiatives and increase shareholder returns.
Feinseth, who is a five-star analyst on TipRanks, holds a 288Thursday position among about 8,000 tracked analysts. 57% of his ratings yielded profits and each rating returned an average of 10.6% return.
DHI Group (DHX), which offers a subscription-based career marketplace for techies, rides a competitive moat that represents the 6.4 million tech candidates currently signed up to its two brands—Dice and ClearanceJobs.
Barrington Research analyst Gary Prestopino believes so DHI has the advantage of long-term secular demand for technical specialists. “DHI specializes in employment categories in which there is long-term excess demand for highly skilled technologists who work in various industries or have active government security clearances,” the analyst said. (See DHI Group stock chart on TipRanks)
Prestopino also found that the global digital global technology workforce is expected to grow from 41 million in 2020 to 190 million in 2025, highlighting the huge opportunity in the market that DHI serves.
Additionally, analysts were encouraged by the relatively cheap valuation of a company with such strong growth and profit potential. “DHI is selling at a more than 60% discount to its peer group on 2022 and 2023 TEV/EBITDA multiples,” said Prestopino, who initiated coverage on the stock with a $12 price target.
Prestopino, who is also a five-star analyst on TipRanks, is ranked 61Holy among nearly 8,000 analysts tracked on the platform. Interestingly, 55% of its evaluations were successful in obtaining an average return of 31.5%.
Last on this week’s list of top stocks is McDonald’s (MCD), which gracefully sails through the further decline of its lifespan. BTIG analyst Peter Saleh, who is ranked #600 out of about 8,000 analysts on TipRanks, gave us some valuable insight last week about a company he is bullish on for the long term.
To delve deeper into the company’s development, the analyst interviewed several franchisees and took notes on their sales, plant-based meat demand and supply, labor, commodities, and automation. After the survey, Saleh was encouraged by McDonald’s healthy sales trends that appeared to defy inflated food and gas prices.
The analyst further found that reductions in manpower and overtime can result in meaningful margin expansion for franchisees as labor availability improves. (See McDonald’s Blogger Opinions and Sentiment on TipRanks)
“We see McDonald’s as one of the strongest restaurant concepts in the world, which is in the middle of a multi-year recovery in sales. After several years of lackluster results, management has restored revenue and profit growth through a combination of relevant menu offerings, restaurant upgrades, digital engagement and stronger leadership,” said Saleh, who also noted that these moves improved sales trends.
The analyst reiterated a Buy rating on MCD stock with a price target of $280.
Saleh has a 55% success rate with his assessments. Additionally, each rating accumulated an average return of 9.8%.
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