The Amazon logo can be seen at the company’s logistics center in Lauwin-Planque, northern France.
Pascal Rossignol | Reuters
Equities have been volatile over the past couple of months and the way forward looks tumultuous.
Investors face a series of factors that have rattled financial markets, and the conflict in Eastern Europe is the latest catalyst. In addition, the Federal Reserve should continue its fight against inflation and start raising interest rates.
Investors with a long-term mindset are turning to top Wall Street analysts to highlight their favorite stock picks to weather the latest bout of volatility.
The pros picked five stocks with promising fundamentals, according to TipRanks, which tracks top-performing analysts.
One of the world’s largest retailers is gradually transforming into a full-service platform. Amazon (AMZN) has branched out into several high-growth sectors and is still seeing strong business performance despite the slowdown in e-commerce. The tech conglomerate’s growth continues to be driven by Amazon Web Services and its Amazon Prime program. Additionally, the company recently announced that it will be opening a real-world clothing store later this year. (See Amazon website traffic on TipRanks)
In a recent report, Ivan Feinseth of Tigress Financial Partners published that Amazon’s strong results were boosted by holiday shopping and customer wins through its advertising and cloud services. He noted that Amazon Prime membership fees had been increased to $139 and that the company had invested heavily in warehouses and other logistical infrastructure to bring its retail business closer to more people. of households.
Feinseth priced the stock long and raised his price target to $4,655 from $4,460.
The analyst pointed to Amazon’s shift toward the physical apparel retail space as the company intends to integrate its online and offline capabilities to maximize apparel sales. Consumers will be able to use a “high-tech dressing process using touch screens” in stores, disrupting current shopping experiences.
Amazon Prime Video has expanded its content lineup with major investments, such as its acquisitions of MGM Studios and the “Lord of the Rings” franchise. The platform is a major player in the streaming wars and has a tremendous market share.
Feinseth was concrete in his bullish assumption, saying the recent decline in the stock price is “a major buying opportunity.”
Out of more than 7,000 analysts on TipRanks, Feinseth ranks 63rd. He successfully rated stocks 67% of the time and has an average return per rating of 30.6%.
The pandemic has done little to slow Walmart (WMT), and now it looks like the company is emerging even stronger than before. The retail company recently reported strong quarterly results, beating Wall Street consensus estimates for earnings per share and gross margins. Digitalization and automation trends have boosted the company’s efficiency, and it has seen robust activity across multiple revenue streams. (See Walmart revenue data on TipRanks)
Robert Drbul of Guggenheim Partners noted this in his post-earnings report. He explained that Walmart’s gross margins were driven by “price management on cost increases, mix and advertising business growth.”
Drbul priced the stock for buy and assigned a price target of $185.
Walmart has been actively repurchasing stock, repurchasing about $2.4 billion last quarter, totaling $9.8 billion for fiscal 2021. This kind of value returned to shareholders is exactly what top analysts like to see in a healthy business.
The analyst believes that “Walmart’s price leadership and operational excellence, along with a more diversified earnings base, led by a growing market and fulfillment services, advertising, financial services , data monetization and its healthcare offering contribute to a positive long-term outlook.”
Drbul is ranked #86 out of over 7,000 analysts in the TipRanks database. He was correct 69% of the time when picking stocks, and he returned 29% on average while doing so.
During the Covid-19 pandemic, many people have taken to investing in their living spaces and DIY projects. This has boosted stocks like Home Depot (High Definition). Now the home improvement retailer is battling its tough quarterly comparisons as the pandemic wanes, though it is holding its own and may even be on the verge of progress, according to Wells Fargo’s Zachary Fadem.
He wrote that HD shares “should get some relief” after the company projected a promising outlook for the year. Additionally, total sales were up 10.7% year-over-year, a strong indicator of growth despite the absence of government-imposed containment measures. (See Home Depot insider trading activity on TipRanks)
Fadem priced the stock long and declared a price target of $460.
The analyst identified several driving factors for Home Depot’s progress, namely the high-flying housing market. In the long term, it is encouraged by the millennial generation who are rising in the creation of hearths.
HD’s shares fell more than 23% in 2022, but Fadem seems to see this now more as a cut-price opportunity than a sinking liability.
TipRanks has over 7,000 analysts in its ranks, and Fadem is currently ranked 58th. He managed to rate stocks 64% of the time, and he averaged returns of 44.3% on each.
About a month after clearing a key hurdle to becoming a bank, SoFi (SOFI) announced its secure acquisition of digital banking platform Technisys. The financial services technology company has had two volatile years as a publicly traded company, seeing its valuation rise and fall by multitudes of its original price. The environment caused by easy credit and high liquidity should dissipate as the Federal Reserve tightens monetary policy, but analysts remain extremely bullish on SOFI.
The company offers financial products through its mobile and desktop platforms, and its banking capabilities are expected to be strengthened by the absorption of Technisys. (See SoFi stock charts on TipRanks)
That’s the view of analyst David Chiaverini of Wedbush Securities, who noted that the $1.1 billion deal could “help SoFi achieve its goal of becoming ‘Amazon Web Services of Fintech’.” Additionally, SOFI will have the ability to innovate more effectively, launch new products and streamline its decision-making capabilities.
Chiaverini priced the stock long and reiterated his $20 price target.
The analyst said the merger could lead to additional revenue streams and cross-selling opportunities, predicting the deal could yield $500 million to $800 million in additional revenue by the end of 2025.
Chiaverini wrote that with Technisys, “the platform will combine with Galileo to become the only company, by direction, that offers a customizable multi-product core financial platform with both UX/UI streamlining capabilities and payment processing in a technology stack”.
Chiaverini currently maintains a ranking of #355 out of over 7,000 expert analysts on TipRanks. His success rate stands at 70% and he has average returns of 29.5% on each of his stock picks.
Palo Alto Networks
The largest cybersecurity company by market capitalization, Palo Alto Networks (PANW) recently released its strong quarterly results, showing continued momentum for its services and the industry as a whole.
Noting this development, Shaul Eyal of Cowen, who noted that the company has exceeded Wall Street’s consensus revenue estimates, as well as its lofty forecasts. He attributed the growth to “strong execution in a high-demand environment with a complex threat environment as a backdrop.”
Eyal reiterated his buy rating on PANW and maintained his price target at $620 per share.
The analyst said more and more customers have opted into the platform’s entire offering, and larger, more robust offerings are driving the company’s performance. Eyal noted PANW’s execution of its business model and pointed to macroeconomic trends acting as tailwinds for the company. (See Palo Alto Networks risk analysis on TipRanks)
Pandemic-induced shifts toward remote working and broader digital transformation seem here to stay, Covid-19 or not. These changes created a favorable demand atmosphere for Palo Alto Networks.
Out of more than 7,000 professional analysts, Eyal ranks 14th. He was accurate when scoring stocks 74% of the time, and he returned 53.5% on average per stock pick.