Tag: Spotify Technology SA

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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Stocks making the biggest moves midday: Spotify, RTX, General Electric and more

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Check out the companies making headlines in midday trading.

3M – Shares of the chemical manufacturer rose 5.5% following the company’s latest earnings report. 3M posted $7.99 billion in revenue, beating analysts’ estimates of $7.87 billion, according to Refinitiv. The company also raised its full-year earnings guidance and reaffirmed its revenue guidance.

Spotify — The music streaming platform tumbled 14% following weaker-than-expected revenue and guidance. Spotify reported revenue of €3.18 billion, below the consensus estimate of €3.21 billion from analysts polled by Refinitiv. Full-year revenue guidance was also softer than analysts forecasted. The results follow the company’s announcement that it will raise prices for premium subscription plans.

Alaska Air — Shares of Alaska Air shed 12%, even as the airline beat estimates on top and bottom lines for the second quarter. The airline reported $3 in adjusted earnings per share on $2.84 billion in revenue. Analysts surveyed by Refinitiv were expecting $2.70 in earnings per share on $2.77 billion in revenue. The airline’s full-year earnings guidance of $5.50 to $7.50 per share was roughly in-line with the average analyst estimate of $6.65, according to FactSet.

RTX – Shares of the defense contractor sank more than 12% after it disclosed an issue affecting a “significant portion” of its Pratt & Whitney engines that power Airbus A320neo models. Elsewhere, RTX reported second-quarter earnings that topped Wall Street expectations, posting $1.29 in adjusted earnings per share on $18.32 billion in revenue. Analysts polled by Refinitiv called for $1.18 in earnings per share and $17.68 billion in revenue.

F5 — Shares of the cloud software company rallied 5.7%. Late Monday, F5 posted a top- and bottom-line beat in its fiscal third quarter. The company reported adjusted earnings of $3.21 per share on revenue of $703 million. Analysts called for $2.86 in earnings per share and revenue of $699 million, according to Refinitiv.

NXP Semiconductors — Shares rose 4% following the chipmaker’s quarterly earnings announcement Monday after hours. NXP reported $3.43 in adjusted earnings per share on $3.3 billion in revenue. Analysts had estimated $3.29 earnings per share and revenue of $3.21 billion, according to Refinitiv. The company’s projected third-quarter earnings also topped analysts’ estimates. 

General Electric — Shares of the industrial giant popped more than 5% to hit a 52-week high after the company posted stronger-than-expected earnings for the second quarter. GE reported adjusted earnings of 68 cents per share on revenue of $16.7 billion. Analysts called for earnings of 46 cents per share on revenue of $15 billion, according to Refinitiv. GE also boosted its full-year profit guidance, saying it’s getting a boost from strong aerospace demand and record orders in its renewable energy business.

Whirlpool — Whirlpool slid more than 3% a day after reporting weaker-than-expected revenue in its second quarter. The home appliance company posted revenue of $4.79 billion, lower than the consensus estimate of $4.82 billion, according to Refinitiv. It did beat on earnings expectations, reporting adjusted earnings of $4.21 per share, higher than the $3.76 estimate.

Biogen — Shares of the biotech company declined 3.8% after its second-quarter earnings announcement. Biogen posted adjusted earnings of $4.02 per share on revenue of $2.46 billion. Analysts polled by Refinitiv anticipated earnings of $3.77 per share and revenue of $2.37 billion. Revenue for the biotech company was down 5% year over year. The company also announced it would slash about 1,000 jobs, or about 11% of its workforce, to cut costs ahead of the launch of its Alzheimer’s drug Leqembi. 

Progressive — The insurance company’s shares lost nearly 2% following a downgrade by Morgan Stanley to underweight from equal weight. The firm cited too many negative catalysts as its reason for the downgrade. 

MSCI — Shares gained 9% after the company’s second-quarter earnings and revenue came above analysts’ estimates. The investment research company posted $3.26 earnings per share, excluding items, on revenue of $621.2 million. Analysts polled by FactSet had expected $3.11 earnings per share on $602.5 million. 

General Motors — The automaker’s stock dipped about 4.5%. GM’s latest quarterly results included a surprise $792 million charge related to new commercial agreements with LG Electronics and LG Energy Solution. Separately, he company lifted its 2023 guidance for a second time this year. GM also reported a second-quarter beat on revenue, posting $44.75 billion compared to the $42.64 billion anticipated by analysts polled by Refinitiv.

UPS – Shares of UPS rose about 1% after the Teamsters union announced a tentative labor deal with the shipping giant on Tuesday.

Invesco — The investment management firm’s shares fell 5% after it posted adjusted earnings of 31 cents per share in the second quarter, while analysts polled by FactSet estimated 40 cents per share. President and CEO Andrew Schlossberg said the company would focus on simplifying its organizational model, strengthening its strategic focus, as well as aligning its expense base. 

Xerox – Shares of the workplace products and solutions provider gained more than 7% after the company raised its full-year operating margin and free cash flow guidance. Xerox now anticipates adjusted operating margin of 5.5% to 6%, compared to earlier guidance of 5% to 5.5%. It also calls for at least $600 million in cash flow, compared to its previous outlook of at least $500 million.

Packaging Corp of America — The packaging products company’s stock surged more than 10%, reaching a new 52-week high. In the second quarter, the company posted earnings of $2.31 per share, excluding items, beating analysts’ estimates of $1.93 per share, according to Refinitiv. The company cited lower operating costs from efficiency, as well as lower freight and logistics expenses. Its revenue of $1.95 billion, meanwhile, came below analysts’ estimates of $1.99 billion, according to FactSet.

Zscaler — Shares of the IT security company popped 4.5% after a BTIG upgrade to buy from neutral. “Our fieldwork leads us to believe that demand in the Secure Service Edge (SSE) has sustainably improved and that large projects which were put on hold in late 2022/early 2023 are starting to move forward again,” BTIG said in a note.

Sherwin-Williams – Shares added more than 3% after the company reported record revenue for the second quarter to $6.24 billion. Analysts called for $6.03 billion in revenue, according to FactSet. The company notched adjusted earnings per share of $3.29, while analysts estimated $2.70 per share.

— CNBC’s Yun Li, Samantha Subin, Sarah Min, Tanaya Macheel, Brian Evans and Alex Harring contributed reporting

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Top Wall Street analysts pick these stocks to climb 2023’s wall of worry

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The Spotify logo hangs on the facade of the New York Stock Exchange with U.S. and a Swiss flag as the company lists its stock with a direct listing in New York, April 3, 2018.

Lucas Jackson | Reuters

Coming off a week that was packed with corporate earnings and economic updates, it is still difficult to determine whether a recession can be avoided this year.

Investing in such a stressful environment can be tricky. To help with the process, here are five stocks chosen by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performances. 

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Apple

Ahead of Apple’s (AAPL) December quarter results, due out on Feb. 2, investors are fairly aware of the challenges that the company faced during the period. From production disruptions in the iPhone manufacturing facility at Zhengzhou in China to higher costs, Apple’s first quarter of fiscal 2023 has endured all. Needless to say, the company expects a quarter-over-quarter growth deceleration.

Nonetheless, Monness Crespi Hardt analyst Brian White expects the results to be in line with, or marginally above, Street expectations. The analyst believes gains in Services, iPad and Wearables, Home & Accessories revenue could be a saving grace.

Looking ahead, White sees pent-up demand for iPhones come into play in the forthcoming quarters, once Apple overcomes the production snags. (See Apple Stock Investors’ sentiments on TipRanks)

The analyst feels that the expensive valuation of approximately 27 times his calendar 2023 earnings estimate for Apple is justified.

“This P/E target is above Apple’s historical average in recent years; however, we believe the successful creation of a strong services business has provided the market with more confidence in the company’s long-term business model,” said White, reiterating a buy rating and $174 price target.

White holds the 67th position among almost 8,300 analysts followed on TipRanks. His ratings have been profitable 63% of the time and each rating has generated a 17.7% average return.

Spotify

 Audio streaming subscription service Spotify (SPOT) is also among the recent favorites of Brian White.

“Spotify is riding a favorable long-term trend, enhancing its platform, tapping into a large digital ad market, and expanding its audio offerings,” said White, reiterating a buy rating and $115 price target.

The analyst does acknowledge some challenges that await Spotify this year but remains optimistic about its margin improvement plans and several favorable industry developments. While it may be tough to attract new premium subscribers, while facing continued pressure from a lower digital ad spending environment, Spotify should benefit from ad-supported monthly active users (MAUs) this year. (See Spotify Stock Chart on TipRanks)

White is particularly upbeat about the waning mobile app store monopolies, after the European Union passed the Digital Markets Act last year. The act will be imposed from May 2023. One of the benefits for Spotify will be the ability to promote its cheaper subscription offers. Now, it can make the offers available outside Apple’s iPhone app. (This had been a challenge, as Apple previously would allow it to only promote its subscriptions through iPhone app.)

CVS Health Corp.

CVS Health (CVS), which operates a large retail pharmacy chain, has been on Tigress Financial Partners analyst Ivan Feinseth‘s list in recent weeks. The analyst reiterated a buy rating and a $130 price target on the stock.

The company’s “consumer-centric integrated model” as well as its increasing focus on primary care should help make health care more affordable and accessible for customers, according to Feinseth. CVS bought primary health-care provider Caravan Health as part of this focus. Moreover, the impending acquisition of Signify Health “adds to its home health services and provider enablement capabilities.”

The analyst also believes that the ongoing expansion of CVS’s new store format, MinuteClinics and HealthHUBs, will increase customer engagement and thus, continue to be a key growth catalyst. (See CVS Health Blogger Opinions & Sentiment on TipRanks)

Feinseth is also confident that CVS’s merger with managed healthcare company Aetna back in 2018 created a health-care mammoth. Now, it is well positioned to capitalize on the changing dynamics of the health-care market, as consumers gain more control over their health-care service expenditures.

Feinseth’s convictions can be trusted, given his 208th position among nearly 8,300 analysts in the TipRanks database. Apart from this, his track record of 62% profitable ratings, with each rating delivering 11.8% average returns, is also worth considering.

Shake Shack

Fast food hamburger chain operator Shake Shack (SHAK) has been doing well both domestically and overseas on the back of its fast-casual business concept. BTIG analyst Peter Saleh has a unique take on the company.

“Shake Shack is the preeminent concept within the better burger category and the rare restaurant chain whose awareness and brand recognition exceed its actual size and sales base,” said Saleh, who reiterated a buy rating on the stock with a $60 price target. (See Shake Shack Hedge Fund Trading Activity on TipRanks)

On the downside, the analyst points out that the expansion of services outside New York has weakened Shake Shack’s margin profile by generating low returns per unit and exposing the company to greater sales volatility. However, margins seem to have bottomed, and the analyst expects profitability to gain momentum over the next 12-18 months. A combination of higher menu prices and deflation of commodity costs are expected to push restaurant margins up to mid-teen levels.

In its preliminary fourth-quarter results, management at Shake Shack mentioned that it plans to tighten its hands with general and administrative expenses this year, considering the macroeconomic uncertainty. This “should prove reassuring for investors given the heightened G&A growth (over 30%) of the past two years.”

Saleh has a success rate of 64% and each of his ratings has returned 11.7% on average. The analyst is also placed 431st among more than 8,000 analysts on TipRanks.

TD Synnex

Despite last year’s challenges, business process service provider TD Synnex (SNX) has benefited from a steady IT spending environment amid the consistently high digital transformation across industries. The company recently posted its fiscal fourth-quarter results last week, where earnings beat consensus estimates and the dividend was hiked.

Following the results, Barrington Research analyst Vincent Colicchio dug into the results and noted that rapid growth in advanced solutions and high-growth technologies were major positives. Even though the analyst reduced his fiscal 2023 earnings forecast due to an expected rise in interest expense, he remained bullish on SNX’s efforts to achieve cost synergies by the end of the current fiscal year. (See TD Synnex Dividend Date & History on TipRanks)

Looking forward, the analyst sees a largely upward trend in growth, albeit a few hiccups. “The key growth driver in the first half of fiscal 2023 should be advanced solutions and high-growth technologies and in the second half should be PCs and peripherals and high-growth technologies. We expect Hyve Solutions revenue growth to slow in fiscal 2023 and slightly rebound in fiscal 2024 versus fiscal 2022 growth,” observed Colicchio, reiterating a buy rating and raising the price target to $130 from $98 for the next 12 months.

Importantly, Colicchio ranks 297th among almost 8,300 analysts on TipRanks, with a success rate of 61%. Each of his ratings has delivered 13% returns on average.

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