Top Wall Street analysts favor these stocks for the long haul

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.


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)


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)


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)


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)

Source link

#Top #Wall #Street #analysts #favor #stocks #long #haul

Top Wall Street analysts say buy these stocks amid the latest macroeconomic uncertainty

Domino’s will roll out 800 custom-branded 2023 Chevy Bolt electric vehicles at locations across the U.S. in the coming months.


Wall Street analysts are focusing on companies that are well-positioned to navigate the ongoing economic turmoil and emerge stronger.

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


Rapid digitization has helped enterprises enhance their productivity. However, it has also made them more vulnerable to cyberattacks. This scenario is driving more demand for cybersecurity companies, including CrowdStrike (CRWD).

Following a recent virtual investor briefing with CrowdStrike’s management, Mizuho analyst Gregg Moskowitz reaffirmed a buy rating on the stock with a price target of $175 and said that CRWD remains a top pick.

The analyst noted that management expects solid growth opportunities for endpoint security and emerging use cases, fueled by Falcon, CrowdStrike’s “truly extensible cloud platform.” The company continues to see a potential total addressable market of $158 billion by 2026, a huge increase compared to $25 billion at the time of its initial public offering in 2019.

The analyst highlighted management’s claim that enterprise customers choose CrowdStrike over Microsoft 80% of the time for several reasons, including its next-generation platform that leverages artificial intelligence compared with the rival’s signature-based approach.

“Despite a more challenging macro backdrop, we continue to believe CRWD’s cloud platform remains highly differentiated, its GTM [go-to-market] is unrivaled, the co. is demonstrating clear success extending beyond traditional endpoint security markets, and FCF [free cash flow] margins remain ~30%,” said Moskowitz.

Moskowitz holds the 237th position among more than 8,300 analysts followed by TipRanks. His ratings have been profitable 57% of the time, with each rating delivering an average return of 12.6%. (See CrowdStrike Stock Chart on TipRanks)


Membership-only warehouse chain Costco (COST) is known to be one of the most consistent players in the retail space, thanks to its resilient business model and impressive membership renewal rates that are generally above 90%.   

Costco recently reported 0.5% growth in its March sales to $21.71 billion, with its comparable sales declining 1.1% year-over-year. (See Costco Insider Trading Activity on TipRanks)

Baird analyst Peter Benedict noted that core comparable sales (which exclude the impact of changes in gasoline prices and foreign exchange) growth slowed to 2.6% in March from 5% in February due to weaker performance in the U.S. and a slackening in non-food categories. Additionally, weakness in e-commerce persisted.

Benedict acknowledged that Costco is “clearly not immune” to a slowdown in general merchandise sales. The analyst said that downward revisions to fiscal third-quarter estimates appear likely following the March sales update. With COST’s forward valuation slightly below its five-year average, he prefers to “opportunistically accumulate shares on pullbacks.”

Benedict reiterated a buy rating on Costco with a price target of $535, as he thinks that the company is well-positioned to handle uneven consumer spending.

Benedict is ranked No. 84 among the more than 8,300 analysts tracked by TipRanks. His ratings have been profitable 69% of the time, with each rating delivering an average return of 14.2%.

Carlo Santarelli recently hosted investor meetings with casino operator Caesars Entertainment’s (CZR) management.

Santarelli noted that the company’s strategic priorities are focused on bringing down its debt levels, “operational prudence,” and the growth of its digital business. The company reduced its debt by $1.2 billion in 2022. (See Caesars Hedge Fund Trading Activity on TipRanks)

The analyst said that he remains “favorably inclined” toward the company, given its stable operations and positive movement in its digital business.

Santarelli reaffirmed a buy rating on Caesars with a price target of $70. He ranks No. 25 among the more than 8,300 analysts followed on TipRanks. Additionally, 66% of his ratings have been successful, with each generating a return of 21.1%, on average.

Domino’s Pizza

Fast-food restaurant chain Domino’s Pizza (DPZ) reported lower-than-anticipated sales for the fourth quarter of 2022. Its U.S. delivery business faced significant pressure last year. Meanwhile, the carryout business saw strong momentum in the U.S. market.

Based on a survey of over 1,000 Domino’s customers, BTIG analyst Peter Saleh noted that carryout-only guests are very loyal to the brand, with only a few indicating that they purchase from other large pizza chains, independents or aggregators.

While carryout sales have been strong recently, the analyst pointed out that the channel is seeing a considerably lower average check compared to delivery. He said that if Domino’s increases the price of the carryout deal by $1, “reclaiming the historical pricing gap with Mix and Match,” it would translate into same-store sales growth of 300 to 350 basis points.

Saleh also feels that Domino’s could drive customers to the carryout segment by migrating its rewards program to a spend-based model. The analyst discussed certain other potential catalysts for the company, including the possibility of a third-party delivery partnership.

Saleh reiterated a buy rating on Domino’s with a price target of $400. He sees potential for the company, even though other analysts have downgraded it.

The analyst is ranked No. 376 among the more than 8,300 analysts followed by TipRanks. His ratings have been profitable 63% of the time, with each rating delivering an average return of 11.4%. (See Domino’s Blogger Opinions & Sentiment on TipRanks)

Texas Roadhouse

Saleh is also bullish on the casual-dining restaurant chain Texas Roadhouse (TXRH) and reaffirmed a buy rating on TXRH. He increased the price target to $120 from $110 following several investor meetings hosted by his firm with the company’s key executives.

The analyst highlighted management’s commentary about how Texas Roadhouse is gaining market share due to the decision by some diners to scale up from fast casual restaurants, and by other diners to scale down from fine dining.  He added that over the past two years, the value gap between fast casual operators and Texas Roadhouse has “narrowed considerably,” as restaurant chains like Chipotle have increased menu prices by more than 20%, while Texas Roadhouse has raised prices by only about 10%.

“We continue to believe that Texas Roadhouse is leveraging its value leadership, especially on the kid’s menu, to take market share, as evidenced by record average weekly sales,” said Saleh. (See Texas Roadhouse Financial Statements on TipRanks)

Despite higher commodity costs, the analyst expects Texas Roadhouse to stick to its strategy of setting lower prices than other restaurants in its category, with its pricing focused on offsetting higher wages only. Overall, Saleh finds TXRH to be one of the “most compelling casual dining concepts,” backed by its consistent industry-leading top line, better unit economics and substantial long-term unit potential.

Source link

#Top #Wall #Street #analysts #buy #stocks #latest #macroeconomic #uncertainty