A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO on the Nasdaq Marketplace in New York City, New York, U.S., September 26, 2019.
Shannon Stapleton | Reuters
Investors are trying to make sense of big company earnings, looking for clues as to what lies ahead as macroeconomic headwinds persist. It is prudent for investors to choose stocks with an optimistic long-term view in these uncertain times.
Here are five stocks picked by top Wall Street analysts, according to TipRanks, a service that ranks analysts based on past performance.
Wholesaler Costco (COST) is known for its resilient business model which has helped it through several economic downturns. Additionally, the members-only warehouse club has a loyal customer base and typically enjoys renewal rates of 90% or more.
Costco recently reported better-than-expected net sales growth of 6.9% and comparable sales growth of 5.6% for the four weeks ending Jan. 29. The company released upbeat numbers despite continued weakness in online sales and the shift in timing. Chinese New Year at the beginning of the year.
Following the sales report, Baird analyst Pierre Benoit reaffirmed a buy rating on Costco and a price target of $575. Benedict said: “With a combination of defensive/essential selling and a loyal membership base, we believe the stock continues to retain fundamental appeal as a rare megacap ‘growth staple’ – particularly in the face of a a challenging consumer spending environment.”
Benedict XVI’s convictions are trustworthy, given his 55e position among more than 8,300 analysts in the TipRanks database. Other than that, it has a solid trail of 71% profitable ratings, with each rating offering an average return of 16.3%. (See Costco Hedge Fund Trading Activity on TipRanks)
2022 has been a tough year for the e-commerce giant Amazon (AMZN) as macroeconomic pressures hurt its retail business and Amazon Web Services’ cloud computing division.
Amazon’s first-quarter sales growth outlook of 4% to 8% reflects a further deceleration from 9% growth in the fourth quarter. Amazon is streamlining costs as it faces slowing revenue growth, higher expenses and continued economic turmoil.
Nonetheless, several Amazon bulls, including Mizuho Securities’ Vijay Rakech, continue to believe in the company’s long-term prospects. Rakesh sees a “modest downside” to Wall Street’s consensus expectations for 2023 revenue growth for Amazon’s retail business. (See Amazon website traffic on TipRanks)
However, he sees more downside risks to Street’s consensus estimate of 20% cloud revenue growth in 2023 compared to his revised estimate of 16%. Rakesh noted that Amazon’s cloud business was hit by lower demand from verticals such as mortgage, advertising and crypto in the fourth quarter and revenue growth slowed through the middle of adolescence so far in the first trimester.
Therefore, Rakesh said AMZN stock could be “volatile in the short term given potential downside risks.” Nonetheless, he reiterated a buy rating on AMZN with a price target of $135 due to “positive long-term fundamentals.”
Rakesh ranks 84th among more than 8,300 analysts tracked by TipRanks. Additionally, 61% of its ratings were profitable, each generating an average return of 19.3%.
Manufacturer of fitness equipment Platoon (PTON), once the darling of the pandemic, fell out of favor after the economy reopened as people returned to gyms and competition increased. Shares of Peloton slumped last year on deteriorating sales and mounting losses.
Nonetheless, investor sentiment has improved for PTON shares, thanks to the company’s turnaround efforts under CEO Barry McCarthy. Investors applauded the company’s fiscal second-quarter results due to higher subscription revenue, even as overall sales fell 30% year-over-year. Although its loss per share narrowed from the year-ago quarter, it was worse than Wall Street had expected.
Like investors, the JPMorgan analyst Doug Anmuth was also “gradually positive” on Peloton following the latest results, citing its cost control measures, improved free cash flow loss and better than expected connected fitness subscriptions. Anmuth pointed out that the company’s restructuring to a more variable cost structure is essentially complete and that it appears focused on achieving its goal of balancing free cash flow by the end of fiscal 2023. .
Anmuth reiterated a buy rating and raised the price target to $19 from $13, given the company’s focus on restoring revenue growth. (See PTON Stock Chart on TipRanks)
Anmuth ranks 192 out of more than 8,300 analysts on TipRanks, with a success rate of 58%. Each of its ratings delivered an average return of 15.1%.
Microsoft (MSFT) artificial intelligence-based growth plans have recently sparked positive sentiment towards the tech giant. The company plans to power its Bing search engine and Edge internet browser with ChatGPT-like technology.
In contrast, the company’s December quarter revenue growth and subdued guidance reflect near-term headwinds, driven by continued weakness in the PC market and a slowdown in its Azure cloud business as companies tighten their spending. That said, Azure’s long-term growth potential looks attractive.
Tigress Financial Analyst Ivan Feinsethwhich ranks 137th out of 8,328 analysts tracked by TipRanks, believes that while near-term headwinds may slow cloud growth and the “more personal computing” segment, Microsoft’s investments in AI will determine its future .
Feinseth reiterated a Buy rating on Microsoft and maintained a price target of $411, stating, “The strength of its Azure Cloud platform combined with the growing integration of AI into its product lines continues to drive global digital transformation and highlights its long-term investment opportunity.
Remarkably, 64% of Feinseth’s ratings generated profits, with each rating earning an average return of 13.4%. (See MSFT Insider Trading Activity on TipRanks)
Ivan Feinseth is also optimistic about mobileye (MBLY), a rapidly growing technology provider that powers advanced driver assistance systems (ADAS) and autonomous driving systems. giant flea Intel still owns the majority of shares in Mobileye.
Feinseth noted that Mobileye continues to see solid demand for its cutting-edge technology. He expects the company to “benefit more and more” from the growing adoption of ADAS technology by original equipment manufacturers.
The company also enjoys an advantage due to the automotive industry’s growing demand for sophisticated camera systems and sensors used in ADAS and safe driving systems. Additionally, Feinseth sees opportunities for the company in the autonomous mobility-as-a-service, or AMaaS, space.
Feinseth said it is possible Mobileye’s revenues will reach more than $17 billion by 2030, supported by “significant investments in R&D, first-mover advantage and an industry-leading product portfolio, combined with significant OEM relationships”. It predicts a potential total addressable market of nearly $500 billion by the end of the decade.
Given Mobileye’s many strengths, Feinseth raised its price target from $44 to $52 and reiterated a Buy rating. (See Opinions and sentiments of Mobileye bloggers on TipRanks)