Tag: Micron Technology Inc

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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Top Wall Street analysts favor these stocks for the long haul

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Sanjay Mehrotra, CEO, Micron

Scott Mlyn | CNBC

The S&P 500 and Nasdaq notched a solid performance in the first half of 2023, thanks to an impressive rally in major tech stocks. However, macro pressures have not abated, with minutes from the latest Federal Open Market Committee meeting hinting at more interest rate hikes to tame high inflation.

Given the ongoing uncertainty, investors could benefit by looking at stocks with strong fundamentals and 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.

Micron

First up is chipmaker Micron (MU), which reported better-than-feared fiscal third-quarter results in late June. The company cautioned that the recently imposed ban on its products by China remains a major headwind. However, investors chose to focus on management’s commentary on improving business conditions, with artificial intelligence driving strong demand for Micron’s memory chips.

Goldman Sachs analyst Toshiya Hari expects Micron’s near-term financial performance to continue to be noisy due to several factors, including the revenue uncertainty associated with the Cyberspace Administration of China’s ban and inventory-related issues.

Nevertheless, the analyst maintained a buy rating on Micron with a price target of $80, saying, “We have confidence in the company’s ability to mitigate potential share loss in China and drive share gains in the HBM3 market over time, while executing on its DRAM and NAND technology roadmaps.”

Hari believes that the company’s solid position in the DDR5 market, which is the latest generation of high-performance memory chips, and the prospects for its high bandwidth memory HBM3 chips (mass production to begin in early 2024) position it well to take advantage of the rapid growth in the AI space.

Hari’s recommendations are worth considering, as he is ranked No. 155 among more than 8,400 analysts tracked on TipRanks. His ratings have been profitable 64% of the time, with each rating delivering an average return of 19.7%. (See Micron Stock Chart on TipRanks)

Texas Roadhouse

Restaurant chain Texas Roadhouse (TXRH) is facing elevated input costs due to sky-high inflation. Despite near- and medium-term margin pressures, Wedbush analyst Nick Setyan continues to believe in the company’s ability to gain further market share in the casual dining restaurant space.

Checks by the analyst’s firm indicate that TXRH is set to deliver second-quarter same-store sales growth ahead of the consensus estimate of 8.2%. Accordingly, Setyan raised his Q2 same-store sales growth estimate from 8.5% to 9.5% to reflect robust dine-in traffic, the impact of increased local marketing efforts, and a higher off-premise mix.

Setyan expects continued strength in the company’s sales to more than offset the ongoing food cost inflation, including beef. He slightly increased his 2023 and 2024 EPS estimates, given his expectation of top-line upside.     

In line with his investment thesis, Setyan reaffirmed a buy rating on the stock with a price target of $123. He explained that his price target reflects a premium valuation, which is “appropriate given our expectation of accelerating market share gains within casual dining for the foreseeable future.”

Setyan holds the 798th position among more than 8,400 analysts on TipRanks. Additionally, 51% of his ratings have been profitable, with an average return of 7.2%. (See TXRH Blogger Opinions & Sentiment on TipRanks)

Carnival

Next on this week’s list is cruise operator Carnival (CCL). After being battered by pandemic-led lockdowns, Carnival and several other travel stocks have bounced back strongly this year due to robust travel demand.

Tigress Financial analyst Ivan Feinseth expects Carnival to benefit from solid bookings, higher pricing, and the reprioritization in consumer spending on travel. He projects revenue, economic operating cash flow, and net operating profit after tax to exceed pre-pandemic record levels by mid-2023.

“CCL’s accelerating Business Performance trends and significant recovery in cash flow continue to enable the ongoing funding of key growth initiatives, fleet expansion/transition, upgrades, and debt reduction,” said Feinseth, who ranks 174 out of more than 8,400 analysts tracked on TipRanks.  

The analyst noted that Carnival paid down $1.4 billion of its debt in the fiscal second quarter. CCL is expected to reduce its debt levels to less than $33 billion by the end of 2023, supported by improved cash flows. The company’s debt peaked at over $35 billion due to the disastrous impact of the pandemic on cruise lines.    

Feinseth reaffirmed a buy rating on CCL and boosted his price target to $23 from $13. He has a success rate of 62% and each of his ratings has returned 13.1%, on average. (See CCL Insider Trading Activity on TipRanks)

MongoDB

Feinseth is also bullish on database software maker MongoDB (MDB), which delivered market-beating results for the fiscal first quarter ended April 30 and raised its full-year guidance. The company had more than 43,100 customers at the end of the period, after witnessing the highest net new customer additions in more than two years.

Feinseth expects the growing integration of generative AI tools and capabilities will drive increased adoption of MongoDB’s highly customizable and scalable database as a service platform by enterprise customers.

The analyst said the company will continue to use its solid cash flows to invest in growth initiatives, including innovation, strategic acquisitions, marketing efforts to attract more customers, and international expansion.

“MDB will continue to benefit from increasing enterprise IT spending driven by enterprises’ ongoing needs to leverage AI capabilities as a growing competitive advantage,” said Feinseth.

Even after the solid year-to-date rally in MDB shares, Feinseth sees further upside in the stock. Accordingly, he reiterated a buy rating and increased the price target to $490 from $365. (See MongoDB Financial Statements on TipRanks)   

Amazon

E-commerce giant Amazon (AMZN) is holding its much-awaited 9th annual Prime Day on July 11 and 12. Prime Day is an annual sales event exclusively held for Amazon Prime members, which helps the company deepen its relationship with existing members and win new ones. 

JPMorgan analyst Doug Anmuth expects the 2023 Prime Day to see elevated demand despite a tough macro backdrop. The analyst projects Prime Day will generate about $7 billion in revenue, up more than 12% year-over-over, with gross merchandise value expected to increase more than 13% to $11 billion.

Anmuth highlighted the initiatives taken by Amazon over the past two years to strengthen its network. In particular, the company doubled the size of its retail network, established a massive last-mile transport network, and implemented a new sortation network to increase the speed of delivery for long-distance orders.

Amazon has also transitioned from a national U.S. fulfillment network to a regional model comprising eight interconnected regions to optimize inventory placement and other processes, reduce delivery costs, and boost speed.

“As such, Amazon should be well-equipped for the elevated demand of Prime Day, & the event should also help AMZN right-size inventory ahead of heavier demand deeper into 2H around the holidays,” explained Anmuth.

Amazon continues to be Anmuth’s “best idea,” with a buy rating and a price target of $145. Anmuth is ranked No. 110 among more than 8,400 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, with each rating delivering an average return of 16.7%. (See Amazon 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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