Tag: Meta Platforms Inc

February was a great month for Wall Street. These were our 5 best-performing stocks

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Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 23, 2024. 

Brendan McDermid | Reuters

February was a strong month for stocks and the Club’s portfolio.

The advance came as investors parsed through fourth-quarter earnings results and fresh economic data, searching for clues about when the Federal Reserve will finally cut interest rates. The Nasdaq Composite led the march higher in February, gaining 6.1% and finishing the month at its first record close since November 2021. Meanwhile, the Dow Jones Industrial Average and S&P 500 both hit a series of all-time highs throughout the month, climbing 2.2% and 5.2%, respectively.

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GPT and other AI models can’t analyze an SEC filing, researchers find

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Patronus AI co-founders Anand Kannappan and Rebecca Qian

Patronus AI

Large language models, similar to the one at the heart of ChatGPT, frequently fail to answer questions derived from Securities and Exchange Commission filings, researchers from a startup called Patronus AI found.

Even the best-performing artificial intelligence model configuration they tested, OpenAI’s GPT-4-Turbo, when armed with the ability to read nearly an entire filing alongside the question, only got 79% of answers right on Patronus AI’s new test, the company’s founders told CNBC.

Oftentimes, the so-called large language models would refuse to answer, or would “hallucinate” figures and facts that weren’t in the SEC filings.

“That type of performance rate is just absolutely unacceptable,” Patronus AI co-founder Anand Kannappan said. “It has to be much much higher for it to really work in an automated and production-ready way.”

The findings highlight some of the challenges facing AI models as big companies, especially in regulated industries like finance, seek to incorporate cutting-edge technology into their operations, whether for customer service or research.

The ability to extract important numbers quickly and perform analysis on financial narratives has been seen as one of the most promising applications for chatbots since ChatGPT was released late last year. SEC filings are filled with important data, and if a bot could accurately summarize them or quickly answer questions about what’s in them, it could give the user a leg up in the competitive financial industry.

In the past year, Bloomberg LP developed its own AI model for financial data, business school professors researched whether ChatGPT can parse financial headlines, and JPMorgan is working on an AI-powered automated investing tool, CNBC previously reported. Generative AI could boost the banking industry by trillions of dollars per year, a recent McKinsey forecast said.

But GPT’s entry into the industry hasn’t been smooth. When Microsoft first launched its Bing Chat using OpenAI’s GPT, one of its primary examples was using the chatbot to quickly summarize an earnings press release. Observers quickly realized that the numbers in Microsoft’s example were off, and some numbers were entirely made up.

‘Vibe checks’

Part of the challenge when incorporating LLMs into actual products, say the Patronus AI co-founders, is that LLMs are nondeterministic — they’re not guaranteed to produce the same output every time for the same input. That means that companies will need to do more rigorous testing to make sure they’re operating correctly, not going off-topic, and providing reliable results.

The founders met at Facebook parent company Meta, where they worked on AI problems related to understanding how models come up with their answers and making them more “responsible.” They founded Patronus AI, which has received seed funding from Lightspeed Venture Partners, to automate LLM testing with software, so companies can feel comfortable that their AI bots won’t surprise customers or workers with off-topic or wrong answers.

“Right now evaluation is largely manual. It feels like just testing by inspection,” Patronus AI co-founder Rebecca Qian said. “One company told us it was ‘vibe checks.'”

Patronus AI worked to write a set of more than 10,000 questions and answers drawn from SEC filings from major publicly traded companies, which it calls FinanceBench. The dataset includes the correct answers, and also where exactly in any given filing to find them. Not all of the answers can be pulled directly from the text, and some questions require light math or reasoning.

Qian and Kannappan say it’s a test that gives a “minimum performance standard” for language AI in the financial sector.

Here’s some examples of questions in the dataset, provided by Patronus AI:

  • Has CVS Health paid dividends to common shareholders in Q2 of FY2022?
  • Did AMD report customer concentration in FY22?
  • What is Coca Cola’s FY2021 COGS % margin? Calculate what was asked by utilizing the line items clearly shown in the income statement.

How the AI models did on the test

Patronus AI tested four language models: OpenAI’s GPT-4 and GPT-4-Turbo, Anthropic’s Claude 2 and Meta’s Llama 2, using a subset of 150 of the questions it had produced.

It also tested different configurations and prompts, such as one setting where the OpenAI models were given the exact relevant source text in the question, which it called “Oracle” mode. In other tests, the models were told where the underlying SEC documents would be stored, or given “long context,” which meant including nearly an entire SEC filing alongside the question in the prompt.

GPT-4-Turbo failed at the startup’s “closed book” test, where it wasn’t given access to any SEC source document. It failed to answer 88% of the 150 questions it was asked, and only produced a correct answer 14 times.

It was able to improve significantly when given access to the underlying filings. In “Oracle” mode, where it was pointed to the exact text for the answer, GPT-4-Turbo answered the question correctly 85% of the time, but still produced an incorrect answer 15% of the time.

But that’s an unrealistic test because it requires human input to find the exact pertinent place in the filing — the exact task that many hope that language models can address.

Llama 2, an open-source AI model developed by Meta, had some of the worst “hallucinations,” producing wrong answers as much as 70% of the time, and correct answers only 19% of the time, when given access to an array of underlying documents.

Anthropic’s Claude 2 performed well when given “long context,” where nearly the entire relevant SEC filing was included along with the question. It could answer 75% of the questions it was posed, gave the wrong answer for 21%, and failed to answer only 3%. GPT-4-Turbo also did well with long context, answering 79% of the questions correctly, and giving the wrong answer for 17% of them.

After running the tests, the co-founders were surprised about how poorly the models did — even when they were pointed to where the answers were.

“One surprising thing was just how often models refused to answer,” said Qian. “The refusal rate is really high, even when the answer is within the context and a human would be able to answer it.”

Even when the models performed well, though, they just weren’t good enough, Patronus AI found.

“There just is no margin for error that’s acceptable, because, especially in regulated industries, even if the model gets the answer wrong 1 out of 20 times, that’s still not high enough accuracy,” Qian said.

But the Patronus AI co-founders believe there’s huge potential for language models like GPT to help people in the finance industry — whether that’s analysts, or investors — if AI continues to improve.

“We definitely think that the results can be pretty promising,” said Kannappan. “Models will continue to get better over time. We’re very hopeful that in the long term, a lot of this can be automated. But today, you will definitely need to have at least a human in the loop to help support and guide whatever workflow you have.”

An OpenAI representative pointed to the company’s usage guidelines, which prohibit offering tailored financial advice using an OpenAI model without a qualified person reviewing the information, and require anyone using an OpenAI model in the financial industry to provide a disclaimer informing them that AI is being used and its limitations. OpenAI’s usage policies also say that OpenAI’s models are not fine-tuned to provide financial advice.

Meta did not immediately return a request for comment, and Anthropic didn’t immediately have a comment.

Don’t miss these stories from CNBC PRO:

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Top Wall Street analysts believe in the long-term potential of these stocks

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An Amazon delivery truck at the Amazon facility in Poway, California, Nov. 16, 2022.

Sandy Huffaker | Reuters

Investors are confronting several headwinds, including macro uncertainty, a spike in energy prices and the unanticipated crisis in the Middle East.

Investors seeking a sense of direction can turn to analysts who identify companies that have lucrative long-term prospects and the ability to navigate near-term pressures. 

To that end, here are five stocks favored by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Amazon

We begin this week’s list with e-commerce and cloud computing giant Amazon (AMZN). While the stock has outperformed the broader market year to date, it has declined from the highs seen in mid-September.

JPMorgan analyst Doug Anmuth noted the recent sell-off in AMZN stock and highlighted certain investor concerns. These issues include the state of the U.S. consumer and retail market, rising competition, higher fuel costs and the Federal Trade Commission’s lawsuit. Also on investors’ mind is Amazon Web Services’ growth, with multiple third-party data sources indicating a slowdown in September.

Addressing each of these concerns, Anmuth said that Amazon remains his best idea, with the pullback offering a good opportunity to buy the shares. In particular, the analyst is optimistic about AWS due to moderating spending optimizations by clients, new workload deployment and easing year-over-year comparisons into the back half of the third quarter and the fourth quarter. He also expects AWS to gain from generative artificial intelligence.

Speaking about the challenging retail backdrop, Anmuth said, “We believe AMZN’s growth is supported by key company-specific initiatives including same-day/1-day delivery (SD1D), greater Prime member spending, & strong 3P [third-party] selection.”

In terms of competition, the analyst contends that while TikTok, Temu and Shein are expanding their global footprint, they pose a competitive risk to Amazon mostly at the low end, while the company is focused across a broad range of consumers.

Anmuth reiterated a buy rating on AMZN shares with a price target of $180. He ranks No. 84 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, with each delivering an average return of 16.6%. (See Amazon’s Stock Charts on TipRanks)  

Meta Platforms

Anmuth is also bullish on social media company Meta Platforms (META) and reaffirmed a buy rating on the stock. However, the analyst lowered his price target to $400 from $425, as he revised his model to account for higher expenses and made adjustments to revenue and earnings growth estimates for 2024 and 2025 due to forex headwinds.

The analyst highlighted that Meta is investing in the significant growth prospects in two big tech waves – AI and metaverse, while continuing to remain disciplined. (See META Insider Trading Activity on TipRanks)

“AI is clearly paying off in terms of incremental engagement from AI-generated content and Advantage+, and as discussed at Meta Connect, Llama 2 should drive AI experiences across the Family of Apps and devices, while Quest 3 is the most powerful headset Meta has ever shipped,” said Anmuth. Llama 2 is Meta’s new large language model.

The analyst expects Meta’s advertising business to continue to outperform, with AI investments bearing results and Reels anticipated to turn revenue-accretive soon. Overall, Anmuth is convinced that Meta’s valuation remains compelling, with the stock trading at 15 times his revised 2025 GAAP EPS estimate of $20.29.

Intel

We now move to semiconductor stock Intel (INTC), which recently announced its decision to operate its Programmable Systems Business (PSG) as a standalone business, with the intention of positioning it for an initial public offering in the next two to three years.

Needham analyst Quinn Bolton thinks that a standalone PSG business has several benefits, including autonomy and flexibility that would boost its growth rate. Operating PSG as a separate business would also enable the unit to more aggressively expand into the mid-range and low-end field programmable gate arrays segments with its Agilex 5 and Agilex 3 offerings.

Additionally, Bolton said that this move would help Intel drive a renewed focus on the aerospace and defense sectors, as well as industrial and automotive sectors, which carry high margins and have long product lifecycles. It would also help Intel enhance shareholder value and monetize non-core assets.  

“We believe the separation of PSG will further allow management to focus on its core IDM 2.0 strategy,” the analyst said, while reiterating a buy rating on the stock with a price target of $40.   

Bolton holds the No.1 position among more than 8,500 analysts on TipRanks. His ratings have been successful 69% of the time, with each rating delivering an average return of 38.3%. (See Intel Hedge Fund Trading Activity on TipRanks). 

Micron Technology

Another semiconductor stock in this week’s list is Micron Technology (MU). The company recently reported better-than-feared fiscal fourth-quarter results, even as revenue declined 40% year over year. The company’s revenue outlook for the first quarter of fiscal 2024 exceeded expectations but its quarterly loss estimate was wider than anticipated.  

Following the print, Deutsche Bank analyst Sidney Ho, who holds the 66th position among more than 8,500 analysts on TipRanks, reiterated a buy rating on MU stock with a price target of $85. 

The analyst highlighted that the company’s fiscal fourth quarter revenue exceeded his expectations, fueled by the unanticipated strength in NAND shipments through strategic buys, which helped offset a slightly weaker average selling price.

Micron’s management suggested that the company’s overall gross margin won’t turn positive until the second half of fiscal 2024, even as pricing trends seem to be on an upward trajectory. However, the analyst finds management’s gross margin outlook to be conservative.

The analyst expects upward revisions to gross margin estimates. Ho said, “Given that the industry is in the very early stages of a cyclical upturn driven by supply discipline across the industry, we remain confident that positive pricing trends will be a strong tailwind over the next several quarters.”

Ho’s ratings have been profitable 63% of the time, with each delivering a return of 21.5%, on average. (See Micron Blogger Opinions & Sentiment on TipRanks)  

Costco Wholesale

Membership warehouse chain Costco (COST) recently reported strong fiscal fourth-quarter earnings, despite macro pressures affecting the purchase of big-ticket items.

Baird analyst Peter Benedict explained that the earnings beat was driven by below-the-line items, with higher interest income more than offsetting an increased tax rate.

“Steady traffic gains and an engaged membership base underscore COST’s strong positioning amid a slowing consumer spending environment,” said Benedict.

The analyst highlighted other positives from the report, including higher digital traffic driven by the company’s omnichannel initiatives and encouraging early holiday shopping commentary.

Further, the analyst thinks that the prospects for a membership fee hike and/or a special dividend continue to build. He added that the company’s solid balance sheet provides enough capital deployment flexibility, including the possibility of another special dividend.   

Benedict thinks that COST stock deserves a premium valuation (about 35 times the next 12 months’ EPS) due to its defensive growth profile. The analyst reiterated a buy rating on the stock and a price target of $600.

Benedict ranks No. 123 among more than 8,500 analysts tracked on TipRanks. Moreover, 65% of his ratings have been profitable, with each generating an average return of 12.2%. (See COST’s Technical Analysis on TipRanks)

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Meta, Alphabet and 10 under-the-radar media stocks expected to soar

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The media landscape is going through a difficult transition, and it isn’t only because streaming is such a tricky business.

Companies such as Walt Disney Co.
DIS,
Warner Bros. Discovery Inc.
WBD
and Paramount Global
PARA
have made heavy investments in streaming services as their traditional media businesses wither, only to find that it is harder than it looks to emulate Netflix Inc.’s
NFLX
ability to make money from streaming.

Some of the companies are also saddled by debt, in part resulting from mergers that don’t hold the same shine in the current media landscape.

Needless to say, this is the age of cost-cutting for Netflix’s streaming competitors and many others in the broader media landscape.

Below is a screen of U.S. media stocks, showing the ones that analysts favor the most over the next 12 months. But before that, we list the ones with the highest and lowest debt levels.

All the above-mentioned media companies are in the communications sector of the S&P 500
,
which also includes Alphabet Inc.
GOOGL

GOOG
and Meta Platforms Inc.
META,
as well as broadcasters, videogame developers and news providers.

But there are only 20 companies in the S&P 500 communications sector, which is tracked by the Communications Services Select Sector SPDR ETF
.

High debt

Before looking at the stock screen, you might be interested to see which of the 53 media companies are saddled with the highest levels of total debt relative to consensus estimates for earnings before interest and taxes (EBIT) for the next 12 months, among analysts polled by FactSet. This may be especially important at a time when long-term interest rates have been rising quickly. Dollar amounts are in millions.

Company

 Ticker

 Debt/ est. EBIT

 Total debt

 Est. EBIT

 Debt service ratio

 Total return – 2023

 Market cap. ($mil)
Dish Network Corp. Class A

 DISH 1,245%

 $24,556

 $1,973

 15%

 -57%

 $1,773
Madison Square Garden Sports Corp. Class A

 MSGS 1,125%

 $1,121

 $100

 -14%

 -4%

 $3,400
Paramount Global Class B

 PARA 656%

 $17,401

 $2,654

 -29%

 -13%

 $9,529
Consolidated Communications Holdings Inc.

 CNSL 651%

 $2,152

 $331

 -26%

 6%

 $441
TechTarget Inc.

 TTGT 629%

 $479

 $76

 16%

 -36%

 $788
Cinemark Holdings Inc.

 CNK 616%

 $3,630

 $589

 61%

 81%

 $1,908
Cogent Communications Holdings Inc.

 CCOI 548%

 $1,858

 $339

 -19%

 27%

 $3,388
E.W. Scripps Co. Class A

 SSP 529%

 $3,084

 $583

 80%

 -42%

 $552
AMC Networks Inc. Class A

 AMCX 492%

 $2,945

 $599

 26%

 -29%

 $357
Live Nation Entertainment Inc.

 LYV 466%

 $8,413

 $1,805

 135%

 22%

 $19,515
Source: FactSet

Click on the tickers for more about each company, including business profiles, financials and estimates.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

The debt figures are as of the end of the companies’ most recently reported fiscal quarters. The debt service ratios are EBIT divided by total interest paid (excluding capitalized interest) for the most recently reported quarters, as calculated by FactSet. It is best to see this number above 100%. Then again, these service ratios cover only one quarter.

Looking at the most indebted company by quarter-end debt to its 12-month EBIT estimate, it would take more than 10 years of Dish Network Corp.’s
DISH
operating income to pay off its total debt, excluding interest.

Shares of Dish have lost more than half their value during 2023, and the stock got booted from the S&P 500 earlier this year. The company has seen its satellite-TV business erode while it pursues a costly wireless build-out that won’t necessarily drive success in that competitive market. Dish plans to merge with satellite-communications company EchoStar Corp.
SATS
in a move seen as an attempt to improve balance sheet flexibility.

It is fascinating to see that for six of these companies, including Paramount, debt even exceeds the market capitalizations for their stocks. Paramount lowered its dividend by nearly 80% earlier this year as it continued its push toward streaming profitability, and Chief Executive Bob Bakish recently called the company’s planned sale of Simon & Schuster “an important step in our delevering plan.”

You are probably curious about debt levels for the largest U.S. media companies. Here they are for the biggest 10 by market cap:

Company

 Ticker

 Debt/ est. EBIT

 Total debt

 Est. EBIT

 Debt service ratio

 Total return – 2023

 Market cap. ($mil)
Alphabet Inc. Class A

 GOOGL 22%

 $29,432

 $133,096

 711%

 47%

 $1,528,711
Meta Platforms Inc. Class A

 META 47%

 $36,965

 $78,129

 717%

 137%

 $634,547
Comcast Corp. Class A

 CMCSA 266%

 $102,669

 $38,539

 77%

 33%

 $187,140
Netflix Inc.

 NFLX 197%

 $16,994

 $8,641

 192%

 41%

 $184,362
T-Mobile US Inc.

 TMUS 378%

 $116,548

 $30,838

 32%

 -5%

 $156,881
Walt Disney Co.

 DIS 263%

 $47,189

 $17,975

 88%

 -4%

 $152,324
Verizon Communications Inc.

 VZ 370%

 $177,654

 $48,031

 36%

 -11%

 $140,205
AT&T Inc.

 T 378%

 $165,106

 $43,681

 31%

 -20%

 $100,872
Activision Blizzard Inc.

 ATVI 93%

 $3,612

 $3,891

 2159%

 21%

 $72,118
Charter Communications Inc. Class A

 CHTR 434%

 $98,263

 $22,651

 89%

 23%

 $62,380
Source: FactSet

Among the largest 10 companies in the S&P Composite 1500 communications sector by market cap, Charter Communications Inc.
CHTR
has the highest ratio of debt to estimated EBIT, while its debt service ratio of 89% shows it was close to covering its interest payments with operating income during its most recent reported quarter. Disney also came close, with a debt service ratio of 88%.

Charter Chief Financial Officer Jessica Fischer said at an investor day late last year that “delevering would only make sense if the market valuation of our shares fully reflected the intrinsic value of the cash-flow opportunity, if debt capacity in the market were limited or if our expectations of cash-flow growth, excluding the impact of our expansion were significantly impaired.”

Meanwhile, Kevin Lansberry, Disney’s interim CFO, said during the company’s latest earnings call that it had “made significant progress deleveraging coming out of the pandemic” and that it would “approach capital allocation in a disciplined and balanced manner.”

Disney’s debt increased when it bought 21st Century Fox assets in 2019, and the company suspended its dividend in 2020 in a bid to preserve cash during the pandemic.

When Disney announced its quarterly results on Aug. 9, it unveiled a plan to raise streaming prices in October. Several analysts reacted positively to the price increase and other operational moves.

Read: The long-simmering rumor of Apple buying Disney is resurfacing as Bob Iger looks to sell assets

The largest companies in the sector, Alphabet and Meta, have relatively low debt-to-estimated EBIT and very high debt-service ratios. Netflix has debt of nearly twice the estimated EBIT, but a high debt-service ratio. For all three companies, debt levels are low relative to market cap.

Low debt

Among the 52 companies in the S&P Composite 1500 communications sector, these 10 companies had the lowest total debt, relative to estimated EBIT, as of their most recent reported fiscal quarter-ends:

Company

 Ticker

 Debt/ est. EBIT

 Total debt

 Est. EBIT

 Debt service ratio

 Total return – 2023

 Market cap. ($mil)
New York Times Co. Class A

 NYT 0%

 $0

 $414

 N/A

 32%

 $6,968
QuinStreet Inc.

 QNST 18%

 $5

 $26

 -153%

 -35%

 $513
Alphabet Inc. Class A

 GOOGL 22%

 $29,432

 $133,096

 711%

 47%

 $1,528,711
Shutterstock Inc.

 SSTK 26%

 $63

 $241

 39%

 -20%

 $1,502
Yelp Inc.

 YELP 31%

 $106

 $344

 78%

 55%

 $2,909
Meta Platforms Inc. Class A

 META 47%

 $36,965

 $78,129

 717%

 137%

 $634,547
Scholastic Corp.

 SCHL 54%

 $108

 $201

 319%

 12%

 $1,314
Electronic Arts Inc.

 EA 73%

 $1,951

 $2,678

 605%

 -2%

 $32,425
World Wrestling Entertainment Inc. Class A

 WWE 93%

 $415

 $448

 479%

 66%

 $9,455
Activision Blizzard Inc.

 ATVI 93%

 $3,612

 $3,891

 2159%

 21%

 $72,118
Source: FactSet

New York Times Co.
NYT
takes the prize, with no debt.

Wall Street’s favorite media companies

Starting again with the 52 companies in the sector, 46 are covered by at least five analysts polled by FactSet. Among these companies, 12 are rated “buy” or the equivalent by at least 70% of the analysts:

Company

 Ticker

 Share “buy” ratings

 Aug. 25 price

 Consensus price target

 Implied 12-month upside potential
Thryv Holdings Inc.

 THRY 100%

 $21.11

 $35.50

 68%
T-Mobile US Inc.

 TMUS 90%

 $133.35

 $174.96

 31%
Nexstar Media Group Inc.

 NXST 90%

 $157.08

 $212.56

 35%
Meta Platforms Inc. Class A

 META 88%

 $285.50

 $375.27

 31%
Cars.com Inc.

 CARS 86%

 $18.85

 $23.79

 26%
Alphabet Inc. Class A

 GOOGL 82%

 $129.88

 $150.04

 16%
Iridium Communications Inc.

 IRDM 80%

 $47.80

 $66.00

 38%
News Corp. Class A

 NWSA 78%

 $20.74

 $26.42

 27%
Take-Two Interactive Software Inc.

 TTWO 74%

 $141.42

 $155.96

 10%
Live Nation Entertainment Inc.

 LYV 74%

 $84.79

 $109.94

 30%
Frontier Communications Parent Inc.

 FYBR 73%

 $15.24

 $31.36

 106%
Match Group Inc.

 MTCH 70%

 $43.79

 $56.90

 30%
Source: FactSet

News Corp.
NWSA
is the parent company of MarketWatch.

Finally, here are the debt figures for these 12 media companies favored by the analysts:

Company

 Ticker

 Debt/ est. EBIT

 Total debt

 Est. EBIT

 Debt service ratio

 Total return – 2023

 Market cap. ($mil)
Thryv Holdings Inc.

 THRY 227%

 $433

 $191

 53%

 11%

 $730
T-Mobile US Inc.

 TMUS 378%

 $116,548

 $30,838

 32%

 -5%

 $156,881
Nexstar Media Group Inc.

 NXST 358%

 $7,183

 $2,009

 63%

 -8%

 $5,511
Meta Platforms Inc. Class A

 META 47%

 $36,965

 $78,129

 717%

 137%

 $634,547
Cars.com Inc.

 CARS 223%

 $451

 $202

 41%

 37%

 $1,253
Alphabet Inc. Class A

 GOOGL 22%

 $29,432

 $133,096

 711%

 47%

 $1,528,711
Iridium Communications Inc.

 IRDM 306%

 $1,481

 $483

 54%

 -7%

 $5,977
News Corp. Class A

 NWSA 261%

 $4,207

 $1,611

 109%

 15%

 $11,940
Take-Two Interactive Software Inc.

 TTWO 272%

 $3,492

 $1,283

 -40%

 36%

 $24,017
Live Nation Entertainment Inc.

 LYV 466%

 $8,413

 $1,805

 135%

 22%

 $19,515
Frontier Communications Parent Inc.

 FYBR 453%

 $9,844

 $2,173

 85%

 -40%

 $3,745
Match Group Inc.

 MTCH 287%

 $3,839

 $1,337

 540%

 6%

 $12,177
Source: FactSet

In case you are wondering about how the analysts feel about debt-free New York Times, it appears the analysts believe the shares are fairly priced at $42.60. Among eight analysts polled by FactSet, three rated NYT a buy, while the rest had neutral ratings. The consensus price target was $43.93. The stock trades at a forward price-to-earnings ratio of 27.7, which is high when compared with the forward P/E of 21.7 for the S&P 500
.

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Phishing scams targeting small business on social media including Meta are a ‘gold mine’ for criminals

Post By Business , , , , , , , , , , , ,

With so much of daily life happening over social media, it’s not surprising that small businesses are relying more and more on Instagram, Facebook and other platforms to spread the word about their business and sell products.

But there is one big catch: small business owners are at a big disadvantage on these platforms when it comes to cybersecurity. 

Take it from Pat Bennett, an entrepreneur who sold granola in the Cleveland area and got about half of her sales through Instagram. The business was already under pressure from the rising cost and availability of sweeteners and oats when her business Instagram page, Pat’s Granola, came under attack. 

The attack looked innocuous. Bennett received a message on Instagram from a small business owner she knows personally. Using a link, her acquaintance asked Bennett to vote for her in a contest. It was a legitimate contest, and it wasn’t unusual for Bennett to communicate with people on Instagram Messenger. As it turned out, it was an attack that went to everyone in her contact’s address book. Bennett lost control of her Instagram and Facebook accounts and hasn’t regained access, despite using all the channels Meta recommends. 

With help, she was able to track the IP addresses to Europe, but that wasn’t enough to avoid a worst-case scenario. Bennett received a letter saying she could regain control of her accounts if she paid close to $10,000. She declined to pay the ransom and had to start all over again. 

Pat Bennett, a Cleveland-based entrepreneur who sells granola says about half of her sales are through Instagram, but she became victim to an Instagram Messenger hack that resulted in Bennett to losing control of her Instagram and Facebook accounts, and she hasn’t regained access, despite using all the channels Meta recommends.

Source: Pat Bennett

Bennett’s experience isn’t isolated. As it turns out, small businesses like Pat’s Granola are frequent targets of hacking rings. CNBC quarterly surveys of small business owners in recent years have indicated that many do not rate the risk of cyberattack highly, yet the FBI says that in recent years a wave of hacks has targeted small business. In 2021, the FBI’s Internet Crime Complaint Center received 847,376 complaints regarding cyberattacks and malicious cyber activity with nearly $7 billion in losses, the majority of which targeted small businesses.

Small business owners say social media giants such as Meta have done little to help them address the problem. 

A Meta spokesperson declined to offer specific comment in response to small business owner concerns, but pointed to its efforts to protect businesses targeted by malware. The company has security researchers that track and take action against “threat actors” worldwide and has detected and disrupted nearly 10 new malware strains this year. Malware can target victims through email phishing, browser extensions, ads and mobile apps and various social media platforms. The links look innocuous and rely on tricking people into clicking on or downloading something. 

Why Main Street is an easy target 

With marketing and selling over Instagram and other social platforms being an attractive way for small businesses to reach and expand their customer base, it’s not surprising that criminal organizations have followed.

According to SCORE, a nonprofit partly funded by the U.S. Small Business Administration, nearly half of small business owners cited social media as their preferred digital marketing channel. Compare that to 51% who cited their company website and 33% who prefer online advertising. Moreover, 73% of business owners said they consider social media to be their most successful digital marketing channel, with 66% citing Facebook, 42% citing Alphabet’s YouTube and 41% Instagram. 

“Criminals are in the business of stealing, so you’re going to go where you can make money and get away with it. And social media accounts of small businesses are like a gold mine,” said Joseph Steinberg, a cyber security privacy and AI expert, who sees small business social media accounts as “low hanging fruit.” 

Bryan Palma, chief executive officer at Trellix, a cybersecurity company that worked with the FBI and Europol to take down Genesis Market, an “eBay” for cybercrime criminals, earlier this year, said he has been seeing a range of cybercriminals targeting platforms such as Instagram, YouTube and Facebook. Some are independent hackers, while others are larger, organized crime groups that target social media accounts with more than 50,000 followers. 

Common online scams to watch out for

One common scam, Palma said, is criminals will create a fake Instagram page notifying the user that there’s a problem with their post, and they should “click here, and we’ll help you fix it.” The link redirects users to a fake site asking them to type in their Instagram credentials. 

That’s similar to what happened to Cai Dixon, owner of Copy-Kids, which makes video content for kids. Dixon created an active online Facebook group with 300,000 followers and was getting as much as $2,000 a month in performance bonuses. In March, she got a message purporting to be from Meta, asking if she would like a blue badge verification. Because she was already in contact with Meta employees over Messenger, she believed the message and gave her private information. 

Turns out, it was a phishing scheme. Almost immediately, Dixon lost control of the account and the Facebook group she had spent years cultivating. The hackers removed Dixon and all the other page moderators and started posting animal cruelty videos, videos of heavy machinery and fake content. When she finally talked to someone on Facebook, “they said the only thing I could do was to tell all my friends to report it hacked and then they could take it down.” 

Cai Dixon, owner of Copy-Kids, which makes video content for kids, created an active online Facebook group with 300,000 followers and was getting as much as $2,000 a month in performance bonuses. But in March, a phishing scheme led Dixon to lose control of the account and the Facebook group she had spent years cultivating.

Source: Cai Dixon

These common hacks for small businesses offer little recourse.

“It’s especially damning for a small business, which has a pretty minuscule security budget compared to a General Electric or GM, which are running the best tools,” said Greg Hatcher, founder of White Knight Labs. 

Companies with 100 or fewer employees experience 350% more social engineering attacks than larger companies, according to Barracuda, a cloud security company. More than half of social engineering attacks are phishing, and one in five organizations had an account compromised in 2021. 

Social media companies are aware of the problem, but fending off attacks on small businesses is time-consuming and expensive. It’s one matter when a large Fortune 500 company that spends millions on advertising or a high-profile individual encounters a hacker. But when it comes to small business owners, there’s less financial incentive. 

“It is often better for social media companies from a purely bottom line to ignore small businesses when they have problems,” Steinberg said, adding that small businesses are generally getting the service for free or close to free. 

Two-factor authentication and cybersecurity tools

Though the threat seems vast, cybersecurity experts said the most effective defense is fairly basic. Not enough people use the security features that social platforms already offer, like two-factor authentication. Entrepreneurs can also use business password managers, designed for multiple users who may need access to the same accounts. 

“Small businesses don’t have to be completely hung out to dry. They can have good cyber hygiene, with a good password policy,” said Hatcher, emphasizing length, ideally 30-40 characters, over complexity as well as two-factor authentication. 

Knowing what to look for and being wary of any links or requests for information can also go a long way. For the unfortunate who get hacked and lose access to accounts, the Identity Theft Resource Center is a nonprofit that can help victims figure out the next steps.   

For now, the online world is still under-regulated and monitored.

Cyberattacks conducted through tech giants have caught the attention of the federal government’s main cyber agency, the Cybersecurity and Infrastructure Security Agency. In an interview with CNBC’s “Tech Check” in January of this year, CISA director Jen Easterly said, “Technology companies who for decades have been creating products and software that are fundamentally insecure need to start creating products that are secure by design and secure by default with safety features baked in,” she said. But the U.S. government has so far taken a cautious approach with support for small business specifically – a spokeswoman for the U.S. Cybersecurity Infrastructure Agency told CNBC in January that it doesn’t regulate small business software, instead pointing to a blog post with guidance aimed at helping businesses large enough to have a security program manager and an IT lead.

“There are a lot of people spending the majority of their time in the virtual world, but the resources are not as extensive. We still have more resources protecting streets,” Palma said. Some of the big online scams get addressed, but there are many “smaller issues” that are costing people and small businesses real money, but governments and companies aren’t equipped to deal with it. “I think over time, we have to shift that balance,” he said. 

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Top Wall Street analysts are banking on these stocks for solid returns

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The Spotify logo on the New York Stock Exchange, April 3, 2018.

Lucas Jackson | Reuters

With markets facing pressure at least in the short term, investors should try to build a portfolio of stocks that can weather the storm and offer long-term growth potential.

Here are five stocks chosen by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Domino’s Pizza

Domino’s Pizza (DPZ) reported mixed results for the second quarter, with the company blaming a decline in its market-basket pricing to stores and lower order volumes for the shortfall in its revenue compared to analysts’ expectations.

Nonetheless, BTIG analyst Peter Saleh reiterated a buy rating on Domino’s with a price target of $465 and said that the stock remains his top pick. (See Domino’s Financial Statements on TipRanks) 

In particular, Saleh expects the company’s Uber Eats partnership, changes in the rewards program, and the launch of its pepperoni Stuffed Cheesy Bread to boost the top line in the fourth quarter and into 2024.

The analyst noted that the pizza chain’s entire menu will become available to Uber Eats customers at regular menu prices, without any deals or coupons. Interestingly, the company is targeting the higher-income customers on Uber Eats and reserving the discounts and other benefits for its own ordering channels.

“We expect the improvement in delivery sales, coupled with declining commodities, to translate to healthier unit economics and accelerated domestic development next year and beyond,” said Saleh.

Saleh ranks No. 331 out of more than 8,500 analysts tracked on TipRanks. Also, 64% percent of his ratings have been profitable, with an average return of 12.9%.  

Meta Platforms

Next up is Meta Platforms (META). The social media platform recently delivered upbeat second-quarter results and issued better-than-anticipated guidance for the third quarter, signaling improved conditions in the digital ad market.

Following the print, Monness analyst Brian White raised his price target for Meta to $370 from $275 and maintained a buy rating, saying that the company’s second-quarter results reflected strong execution and its massive cost-improvement measures.

The analyst noted that management’s commentary during the earnings call reflected positive vibes, backed by an improving digital ad market and a compelling product roadmap. He highlighted the momentum in Meta’s short-video feature Reels, which is growing at a more than $10 billion annual revenue run rate across apps. He also mentioned the better-than-expected traction in Threads and the company’s significant investments in artificial intelligence.        

White cautioned investors about regulatory risks and internal headwinds. However, he said that in the long run, “Meta will benefit from the digital ad trend, innovate with AI, and participate in the build-out of the metaverse.”

White holds the 27th position among more than 8,500 analysts on TipRanks. His ratings have been profitable 67% of the time, with each rating delivering an average return of 20.7%. (See Meta Platforms Stock Chart on TipRanks)

Spotify

White is also bullish on audio streaming company Spotify (SPOT). While Spotify’s second-quarter revenue and Q3 2023 guidance missed analysts’ expectations, the analyst contended that results were “respectable” with meaningful year-over-year growth of 27% in monthly active users (MAU) to 551 million.

Commenting on Spotify’s decision to increase the price of its subscription offerings, White noted that the price hikes will impact most subscribers beginning September, thus having a small impact on the third quarter but contributing meaningfully to the fourth-quarter performance.

While the analyst acknowledges an intense competitive backdrop, he said that “Spotify is riding a favorable long-term trend, enhancing its platform, tapping into a large digital ad market, expanding its audio offerings, and improving its cost structure.”

White raised his 2024 estimates and reiterated a buy rating while increasing the price target for SPOT stock to $175 from $160. (See Spotify Blogger Opinions & Sentiment on TipRanks)  

Microsoft

Another tech giant in the week’s list is Microsoft (MSFT), which has been making headlines this year due to its generative AI advancements. The company’s fiscal fourth-quarter results topped Wall Street’s estimates. That said, the revenue outlook for the first quarter of fiscal 2024 fell short of expectations.

Nonetheless, Goldman Sachs analyst Kash Rangan, who ranks 459th among more than 8,500 analysts tracked on TipRanks, remains bullish on MSFT stock. (See Microsoft Hedge Fund Trading Activity on TipRanks)           

The analyst thinks that in the short term, there might be concerns about when the company’s ramped-up capital investments will pay off. However, he observed that historically, whenever Microsoft increased its capital expenditure in the cloud market, Azure growth rate shot up meaningfully and margins rebounded, driving the stock price higher. 

With a strong presence across all layers of the cloud stack, Rangan said that Microsoft is well positioned to capture opportunities in several long-term secular trends, including public cloud and SaaS adoption, digital transformation, generative AI and machine learning, analytics and DevOps.

In line with his bullish stance, Rangan reiterated a buy rating with a price target of $400. He has a success rate of 59% and each of his ratings has returned 10% on average.

General Motors

We now drive toward legacy automaker General Motors (GM), which impressed investors with robust growth in its second-quarter revenue and earnings. Additionally, the company raised its full-year outlook for the second time this year.

Recently, Tigress Financial Partners analyst Ivan Feinseth reaffirmed a buy rating on the stock with a price target of $86, noting the company’s strong execution and the ramp-up of new electric vehicle launches and production.

The analyst highlighted that the company continues to witness robust demand for its full-size SUVs and pickups, which is driving its revenue and cash flow higher and funding the transition and expansion of its EV production.

Feinseth called GM’s Ultium platform and supply chain for EV battery production its significant competitive advantage. The analyst is also positive about the company’s recent initiatives to expand its charging network.

“In addition to the ramp-up of EV production, GM’s ramp-up of high-value software and services as it plans to double company revenue to $275-315 billion by 2030 should drive significant increases in Return on Capital (ROC) and Economic Profit,” the analyst said.     

Feinseth holds the 215th position among more than 8,500 analysts on TipRanks. His ratings have been successful 61% of the time, with each rating delivering an average return of 12.9%. (See General Motors Insider Trading Activity on TipRanks)

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Top Wall Street analysts are bullish on these five stocks

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A logo of Meta Platforms Inc. is seen at its booth, at the Viva Technology conference dedicated to innovation and startups, at Porte de Versailles exhibition center in Paris, France June 17, 2022.

Benoit Tessier | Reuters

The second half has kicked off in earnest, and earnings are revving up.

Investors tracking the action may garner useful insights from Wall Street experts’ top stock picks, and this can help them make informed decisions as they seek solid returns over the long term.

Here are five stocks for investors to consider, according to Wall Street’s top professionals on TipRanks, a platform that ranks analysts based on their past performance. 

Cava Group 

First on this week’s list is the Mediterranean restaurant chain Cava (CAVA), which made a blockbuster public debut last month. The rally in CAVA shares since its initial public offering reflects investors’ optimism about the fast-casual restaurant chain’s growth prospects. Cava has expanded to 263 locations since it opened its first restaurant in 2011.  

Stifel analyst Chris O’Cull initiated a buy rating on Cava with a price target of $48. The analyst sees robust growth potential, given the company’s plan to expand to at least 1,000 restaurant locations in the U.S. by 2032. Cava’s expansion plans include a foray into new markets in the Midwest region next year.  

O’Cull expects the company’s growth plans to be backed by a healthy balance sheet. He noted that following the IPO, Cava had about $340 million in cash on hand and no funded debt. The analyst estimates annual revenue growth of 20% during the next four years, driven by at least 15% growth in Cava’s footprint. He projects adjusted earnings before interest, taxes, depreciation and amortization to almost double to $112 million in 2026 from $58 million this year and the company to generate positive free cash flow starting in 2026.  

“In our view, the stock’s premium valuation can be justified by its AUV [average unit volume] and unit count growth opportunity and the potential for solid operating momentum to cause upward revisions to near-term estimates and long-term earnings potential,” said O’Cull.  

O’Cull is ranked 349th among more than 8,400 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, with each rating delivering an average return of 12.3%. (See CAVA Technical Analysis on TipRanks)        

Apple  

Tech behemoth Apple (AAPL) is known for its innovative products, including the iPhone and iPad. That said, the company’s higher-margin Services segment has rapidly grown over recent years and has enhanced the firm’s revenue and profitability.  

Evercore ISI analyst Amit Daryanani, who ranks 258th out of more than 8,400 analysts tracked on TipRanks, recently revealed the results of the annual Apple Services survey conducted by his firm. The survey indicated that Apple Services continues to experience increased adoption across the board. In particular, Apple Pay, Music and TV+ saw the most notable rises in adoption compared to last year’s survey. 

The survey revealed that Services’ average revenue per user (ARPU) in the U.S. is $110, which is much higher than Daryanani’s global estimate of $81. The analyst contends that ARPU growth is the major catalyst for the Services business, given that smartphone penetration has likely reached peak levels.  

“We continue to see Apple Services as well positioned to maintain double digit growth through FY27 and beyond driven by increasing ARPU coupled with new product launches,” said Daryanani.  

Daryanani reiterated a buy rating on AAPL with a price target of $210. He has a success rate of 60%, and each of his ratings have returned 11.5%, on average. (See AAPL Insider Trading Activity on TipRanks)  

Meta Platforms 

Next on our list is social media giant Meta (META), which recently launched Threads, a social media app challenging Twitter.

Tigress Financial Partners analyst Ivan Feinseth thinks that the Thread launch was well-timed to take advantage of Twitter’s sliding popularity. He said that the introduction of Threads has created an additional growth catalyst that could further drive Instagram’s engagement.  

Feinseth also expects Meta’s ongoing artificial intelligence investments and integration to continue to enhance engagement and advertising revenue across all its apps. The analyst highlighted that Meta’s solid balance sheet and cash flows help support its growth initiatives, including investing in the Metaverse, strategic acquisitions, and share repurchases.  

Feinseth reiterated a buy rating on Meta and raised the price target to $380 from $285. The analyst said, “Increasing AI integration, better cost management, and increased operating efficiency will drive a reacceleration in Business Performance trends.” 

Feinseth holds the 205th position among more than 8,400 analysts on TipRanks. Sixty percent of his ratings have been profitable, with an average return of 12.8%. (See Meta Blogger Opinions & Sentiment on TipRanks) 

Nvidia  

Semiconductor giant Nvidia (NVDA) is seen as one of the major beneficiaries of the growing interest in generative AI, which is fueling tremendous demand for its GPU chips.  

Goldman Sachs analyst Toshiya Hari noted that Nvidia has already gained from the traditional AI boom for a decade, as reflected in the spike in its Data Center segment revenue from $129 million in fiscal 2013 to $15 billion in fiscal 2023. The analyst increased his revenue and earnings estimates for Nvidia, as he thinks that the company has entered a new phase of generative AI-driven growth. 

Hari projects demand for Nvidia’s products in training generative AI models to represent a cumulative revenue opportunity of about $85 billion (base-case scenario) in calendar years 2023 to 2025. (See Nvidia Financial Statements on TipRanks)     

Meanwhile, he estimated inferencing (comprises key applications that could leverage generative AI like search, productivity tools in enterprise, ecommerce, email, and social media) could be a nearly $7.7 billion revenue opportunity from 2023 to 2025, including $4.5 billion in 2025.     

Hari increased his price target for Nvidia stock to $495 from $440 and reiterated a buy rating. He continues to see “significant runway ahead for the company based on its robust competitive position in what is a rapidly growing (yet nascent) AI semiconductor market.” 

Hari holds the 171st position among more than 8,400 analysts on TipRanks. Additionally, 63% of his ratings have been profitable, with an average return of 19.1%. 

US Foods

US Foods (USFD) distributes fresh, frozen and dry food, as well as non-food products, to food service customers.  

Recently, BTIG analyst Peter Saleh reiterated a buy rating on USFD with a price target of $48, saying, “US Foods is one of the best self-help stories in our coverage, with the majority of the EBITDA growth contingent on operational improvements management has been diligently implementing for the past year.” 

Following a stellar gross profit margin in the first quarter, Saleh raised his second-quarter gross margin estimate by 20 basis points to reflect increased penetration of private brands, stock-keeping unit (SKU) rationalization, reduced waste and improved labor retention. 

The analyst also raised his Q2 EBITDA estimate and expressed confidence in US Foods’ ability to beat expectations, citing the company’s strategic initiatives, stable industry sales and its track record of handily surpassing Wall Street’s EBITDA projections in recent quarters.   

Saleh is ranked 325th among more than 8,400 analysts tracked on TipRanks. His ratings have been profitable 64% of the time, with each one delivering an average return of 12.7%. (See US Foods Stock Chart on TipRanks) 

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Here are our top 4 stocks and worst 4 stocks to start the second half of 2023

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 12, 2023. 

Brendan McDermid | Reuters

Two weeks into the second half of the year, we put together a quick look at the top four performers and the bottom four in Jim Cramer’s Charitable Trust, the stock portfolio we use for the Investing Club.

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Top Wall Street analysts expect these five stocks to fetch attractive returns

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A logo of Meta Platforms Inc. is seen at its booth, at the Viva Technology conference dedicated to innovation and startups, at Porte de Versailles exhibition center in Paris, France June 17, 2022.

Benoit Tessier | Reuters

Signs of a potential slowdown in the jobs market are emerging and triggering worries about an impending recession, but investors would be wise to ignore the noise.

Instead, investors should keep an eye out for stocks with strong fundamentals and robust growth potential — two characteristics that can get them through a rocky patch for the market.

To that effect, here are five stocks chosen by Wall Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance. 

Meta Platforms 

Weakness in digital ad spending due to macro pressures has hit social media giant Meta Platforms (META) over the recent quarters. Nonetheless, the company is reducing its workforce, canceling lower-priority projects and curtailing non-headcount-related expenses to improve its profitability.  

While Meta is calling 2023 the “Year of Efficiency,” JPMorgan analyst Doug Anmuth says that the company is “building the critical muscle for financial discipline over the long term.” (See Meta Platforms Financial Statements on TipRanks) 

Anmuth expects Meta’s revenue to return to double-digit growth in the second half of 2023 and 2024, fueled by several key drivers like artificial intelligence and product-driven improvements to the ad stack following the implementation of Apple’s App Tracking Transparency feature, the rise in the engagement and monetization of Reels, and the solid rise in click-to-message ads.   

“While Meta shares have more than doubled off the early November lows, we still think there’s meaningful upside ahead driven by accelerating revenue growth, continued cost efficiencies, and still attractive valuation,” the analyst said.  

Based on his bullish investment thesis, Anmuth raised his December 2023 price target for META stock to $270 from $225 and reiterated a buy rating. He is ranked No. 157 among the more than 8,300 analysts tracked by TipRanks. His ratings have been profitable 58% of the time, with each rating delivering an average return of 14.5%.  

SoFi Technologies 

Next on our list is fintech firm SoFi Technologies (SOFI), which offers digital financial services to over 5.2 million members. SoFi recently announced the acquisition of fintech mortgage lender Wyndham Capital Mortgage. The acquisition is expected to drive SoFi’s mortgage growth and operational efficiencies and broaden its mortgage product offerings.  

Jefferies analyst John Hecht, who ranks No. 366 among more than 8,300 analysts tracked by TipRanks, expects the Wyndham acquisition to help SoFi accelerate its mortgage originations volume “at the same time as the SOFI bank continues to grow deposits at an accelerated pace of 7.3x in 2022.” Note that SoFi’s mortgage segment accounted for about 4% of total originations in the fourth quarter of 2022.      

The analyst also highlighted that the Wyndham acquisition would “minimize” SoFi’s dependence on third-party partners and processes, thus driving cost savings over the long term.  

Hecht reiterated a buy rating on the stock with a price target of $8 saying, “We view the transaction favorably as it is strategic and will enhance SOFI’s mortgage segment, while taking advantage of the current Fintech valuation environment as an opportunity to build into the next mtg. cycle.” 

Hecht has a success rate of 59%, and each of his ratings has returned an average of 9.2%. (See SoFi Insider Trading Activity on TipRanks) 

PVH 

Apparel company PVH (PVH), which owns popular brands like Calvin Klein and Tommy Hilfiger, delivered better-than-expected results for the fourth quarter of fiscal 2022. The company is optimistic about the road ahead, supported by its PVH+ Plan, a multi-year direct-to-consumer and digitally-led growth strategy that aims to further strengthen the Calvin Klein and Tommy Hilfiger brands.  

Guggenheim analyst Robert Drbul feels that the PVH+ Plan would drive favorable earnings revisions and multiple expansion. The analyst sees “an attractive risk reward profile” in PVH stock based on the company’s earnings growth potential and current valuation.  

“We believe in Tommy and Calvin brand strength globally and ongoing margin initiatives at the company, which we anticipate will position PVH favorably as the world continues to reopen and recover,” the analyst said.   

Drbul raised his price target for PVH stock to $110 from $105 and reiterated a buy rating based on the company’s streamlining efforts, revenue growth potential, and margin expansion possibilities. 

Drbul holds the 364th position among the more than 8,300 analysts followed by TipRanks. His ratings have been profitable 62% of the time, with each rating delivering an average return of 8%. (See PVH Stock Chart on TipRanks)  

Walmart 

Drbul is also bullish on retail giant Walmart (WMT). After attending the company’s investment community meeting in Tampa, Florida, the analyst reaffirmed a buy rating on Walmart with a price target of $165.  

Drbul said that Walmart is well-positioned in the current retail backdrop and has one of the strongest leadership teams, referring mainly to its CEO Doug McMillon, whom he called “one of the best visionaries.” Despite the ongoing uncertainty, Drbul expects WMT shares to touch new highs as the company continues to execute its growth strategy. (See Walmart Insider Trading Activity on TipRanks) 

The analyst highlighted the significant progress that Walmart has made on the e-commerce front and its focus on technology. E-commerce now contributes to $82 billion or 14% of Walmart’s overall sales, up from $25 billion or 5% of sales five years ago. Walmart sees an opportunity for its e-commerce business to reach $100 billion in the near future.    

“Combining this meeting’s top-line objectives and strategies, along with its relentless tech-enabled focus, Walmart is executing several initiatives that stand out as margin-enhancing, including the focus on automation, and its market fulfillment initiatives that further utilize technology and robotics,” said Drbul.  

Overall, he is upbeat about Walmart’s long-term strategy, including its efforts to enhance the omnichannel shopping experience and build a more diversified profit base that’s “led by a growing marketplace and fulfillment services, advertising, financial services, data monetization, and its healthcare offering.” 

Airbnb  

Airbnb (ABNB), an online marketplace for short-term rentals, ended 2022 with market-beating fourth-quarter results. The company is benefiting from pent-up travel demand despite persistent macro pressures.  

Recently, Tigress Financial Partners’ analyst Ivan Feinseth increased his price target for ABNB stock to $185 from $160 and maintained a buy rating. The analyst acknowledged that the company continues to benefit from solid travel demand and the shift in consumer preference to “alternative, better-value accommodations.”  

“ABNB remains at the forefront of how consumers prefer to travel by offering a broad variance of accommodations from budget to extravagant and meeting the needs for a broad range of stay duration while benefiting significantly from ongoing hybrid work and travel trends,” said Feinseth.  

He expects a notable rise in Airbnb’s return on capital over time, boosted by the booking fee income of its asset-light business model. The analyst listed several drivers of the company’s future growth, including the ability to enhance capacity by adding new hosts, investment in new technologies, international expansion, cobranded buildings and growing partnerships with travel service providers.  

Feinseth ranks No. 154 among the more than 8,300 analysts tracked by TipRanks. Additionally, 62% of his ratings have been profitable, with an average return of 12%. (See Airbnb Hedge Fund Trading Activity on TipRanks)  

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Top Wall Street analysts are bullish on these 5 stocks

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Exterior of a redesigned Chipotle restaurant

Source: Chipotle Mexican Grill

With market conditions as uncertain as they are now, it may be prudent to have a long-term approach and turn to the experts for guidance.

Here are five stocks chosen by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performances.

Wynn Resorts

Wynn Resorts (WYNN) reported a higher-than-anticipated adjusted loss per share for the fourth quarter. Nonetheless, investors were pleased with the management’s commentary about better times ahead, backed by continued strength in Las Vegas and the reopening of Macao following China’s stringent Covid lockdowns.

Deutsche Bank analyst Carlo Santarelli thinks that the future margin profile of Wynn Macau is “underappreciated.” Moreover, he expects the company’s financial leverage reduction to be “swift and screen well throughout 2023.”

“Given the resurgence of Macau, the continued strength and near term visibility in Las Vegas, and what we view as stability at Encore Boston Harbor, our estimates for 2023 and 2024 are higher across each of the 3 geographies,” Santarelli said.

Santarelli also noted that the stock’s valuation is reasonable, as the company is still in the early stages of the Macao recovery cycle. Santarelli reiterated a buy rating and raised his price target for Wynn to $128 from $106. (See Wynn Blogger Opinions & Sentiment on TipRanks)

Santarelli’s recommendation is worthy of consideration as he ranks 26th among more than 8,000 analysts tracked by TipRanks. Moreover, 67% of his ratings have been successful, generating a 21.7% average return per rating.

Chipotle Mexican Grill

Burrito chain Chipotle Mexican Grill’s (CMG) lower-than-anticipated fourth-quarter results reflected the impact of inflation on consumer spending. However, the company assured investors that transaction trends turned positive in 2023, setting its comparable sales growth estimate in the high-single-digit range for the first quarter.

Chipotle plans to further expand its footprint, which stood at 3,187 restaurant locations at the end of 2022. It aims to open 255 to 285 new locations in 2023.     

Baird analyst David Tarantino, who ranks 320 out of 8,346 analysts on TipRanks, lowered his 2023 earnings per share estimate following the lackluster fourth-quarter results and a lower-than-projected margin outlook for the first quarter. Nevertheless, Tarantino remains bullish on Chipotle.

“We came away with a view that management is taking the appropriate operational steps to drive structural improvements in traffic as 2023 unfolds, and we expect signs of progress on this front to help resolve the pricing/traffic debate and return the focus toward the significant economic value CMG can create via high-ROIC unit expansion,” Tarantino said

The analyst reiterated a buy rating on Chipotle stock and raised the price target to $1,900 from $1,800. Sixty-six percent of Tarantino’s ratings have generated profits, with each one bringing in a 10.6% average return. (See CMG Insider Trading Activity on TipRanks)

Meta Platforms

Social media behemoth Meta Platforms (META) is next on our list. Meta has rebounded this year after a disastrous run in 2022. Its problems last year were due to a slowdown in online advertising spend and the mounting losses of the company’s Reality Labs division — which includes its metaverse projects.  

Despite weak earnings, the stock spiked in reaction to recent results, as investors cheered Meta’s cost control measures and a $40 billion increase in its share repurchase authorization. Meta already had nearly $11 billion remaining under its existing buyback plan. 

Tigress Financial Partners analyst Ivan Feinseth highlighted that Meta’s “most valuable asset” is its huge and growing user base. Daily Active People or DAP (the number of people using at least one of the company’s core products — Facebook, WhatsApp, Instagram, or Messenger, every day) rose 5% to 2.96 billion in the fourth quarter.

Furthermore, Feinseth projects that Meta’s performance will be fueled by a “new, more cost-efficient data center structure” that is competent in supporting artificial intelligence (AI) and non-AI workloads.

Feinseth increased his price target for Meta to $285 from $260 and reiterated a buy rating as he believes it can outperform rivals due to its massive user base and the ability to generate significantly higher returns for advertisers.

Feinseth currently stands at #126 among over 8,300 analysts on TipRanks. Moreover, 65% of his ratings have been successful, with each generating a 13.5% average return. (See Meta Platforms Hedge Fund Trading Activity on TipRanks)

CyberArk Software

Digital transformation, the accelerated shift to the cloud and geopolitical tensions have triggered an increase in cyber threats, driving demand for cybersecurity companies like CyberArk (CYBR).

CyberArk, a leading cybersecurity company, has successfully transitioned from perpetual licenses to a subscription model — which has led to more reliable and predictable revenues.  

Mizuho analyst Gregg Moskowitz noted the impressive 45% growth in CyberArk’s annual recurring revenue (ARR) as of 2022’s end and ARR growth outlook in the range of 28% to 30% by the end of 2023. The analyst also pointed out that CyberArk ended 2022 with more than 1,300 customers generating over $100,000 in ARR, up 40% compared to the prior year.  

Moskowitz reiterated a buy rating on CyberArk stock and a $175 price target, saying, “We continue to view CYBR as a primary beneficiary of a heightened threat landscape that has amplified the need for privileged access and identity management.” He is also optimistic that CyberArk’s transition to a recurring revenue model will drive better financials.

Moskowitz holds the 236th position among more than 8,000 analysts on TipRanks. His ratings have a 58% success rate, with each delivering an average return of 13.8%. (See CyberArk Stock Chart on TipRanks)

Micron Technology

Semiconductor company Micron (MU) has been under pressure in recent quarters due to lower demand in several end-markets, particularly PCs. In the first quarter of fiscal 2023 (ended Dec. 1), the company’s revenue plunged 47% due to lower shipments and a steep decline in prices.

In response to tough business conditions, Micron has slashed its capital expenditure and has been taking initiatives to reduce costs. In December, the company announced that it would cut its workforce by nearly 10% in 2023 and suspend bonuses for the year. It has also suspended share repurchases for now.

Despite the ongoing challenges, Mizuho analyst Vijay Rakesh upgraded Micron to buy from hold and raised his price target to $72 from $48. Rakesh acknowledged that near-term headwinds remain due to high inventories, lower demand for PCs, handsets, servers and lower memory pricing. Nonetheless, he thinks that we are approaching a “cyclical bottom.”

Rakesh explained, “We believe memory sets up better for 2H23/2024E with supply/capex cuts, inventory correction behind, and a better pricing environment.”

Rakesh ranks 73 out of more than 8,300 analysts on TipRanks, with a success rate of 61%. Each of his ratings has delivered a 19.7% average return. (See Micron Financial Statements on TipRanks)

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