Using a market decline to build shares in companies with strong fundamentals and prospects can lead to good returns when the market rises. To that end, it can be a good practice to keep an eye on which stocks analysts are recommending.
Here are five stocks picked by Wall Street’s top analysts, according to TipRanks, a service that ranks analysts based on the performance of their ratings.
micron (mu) strives to be the most efficient and innovative global provider of semiconductor memory solutions. The growing demand for memory chips from cloud computing providers as well as the rapid spread of 5G mobile networks and IoT (Internet of Things) are driving the company’s growth.
However, the company’s short-term future seems uncertain given weak demand in the PC and smartphone markets. In addition, it is expected that supply bottlenecks for certain components will affect bit shipments for some time. (See Micron Dividend Date and History on TipRanks)
Last week, the company’s fiscal 2022 fourth quarter painted a bleak picture of its developments. Still, Toshiya Hari, an analyst at Goldman Sachs, did not deviate from his bullish stance. The analyst was “encouraged by Micron’s supply-side response,” which included the company’s cost-cutting strategy. Specifically, Micron is working to cut its capital expenditures (CapEx) by about 30% year over year in FY23 (that’s about $4.1 billion).
However, the company also said it will double its construction investments and make other strategic moves that will slow the ramp-up of certain DRAM and NAND processes. But these steps will ensure smoother long-term growth. “From our point of view, we believe that these actions are a highlight microndifficult decisions to maintain profitability and shareholder returns and are likely to be well received by investors based on our earlier discussions,” noted Hari, reiterating a Buy rating on MU stock. However, considering near-term headwinds, the analyst lowered that Price target from $63 to $62.
Hari, ranked 318th out of nearly 8,000 analysts tracked on TipRanks, has posted profitable reviews 57% of the time. Additionally, each of its reviews has yielded an average return of 16.3% over the past year.
Amazon (AMZN) benefits from the solid prime momentum thanks to fast delivery and a strong content portfolio. Additionally, the company’s cloud dominance is steadily reinforced by the strong adoption rate of AWS. Most importantly, the company’s strong global presence and unwavering customer focus remain its biggest selling points. (See Amazon Stock Investors on TipRanks)
Amazon is hosting a Prime Early Access Sale next week, which Brian White, an analyst at Monness Crespi Hardt, is bullish about. The analyst believes a sale ahead of the holiday season will boost Prime’s value and also benefit customers struggling with heavy spending.
To enhance its Prime platform, Amazon also offered its US Prime members a free one-year membership of Grubhub+. The company has also invested heavily in improving its content portfolio in recent months. Moreover, White believes so too Amazon’s acquisition of MGM Holdings.
Additionally, given Amazon’s reinvestments in the business, White believes the company’s current profitability is well below its long-term potential. Needless to say, the analyst reiterated a buy rating on the stock with a price target of $172.
“We believe the company’s long-term growth path in e-commerce, AWS, digital media, advertising, Alexa, robotics, AI and more is attractive,” White said.
White comes 491St among nearly 8,000 analysts tracked on TipRanks. Notably, 56% of its reviews were successful, with each generating an average 10.10% return.
Apple (AAPL) has been trying its best to weather a slowdown in demand and rising costs. His consistent and compelling product launches propel the brand forward in an increasingly uncertain environment.
With that in mind, Ivan Feinseth, an analyst at Tigress Financial Partners, didn’t seem overly concerned about the near-term threats facing the company. The analyst recently maintained a Buy rating on AAPL stock, believing that “ongoing innovation, new product launches and rising service revenues will continue to drive long-term value creation for shareholders.”
Feinseth also thinks the recent stock decline presents a major buying opportunity due to weak demand for Apple devices. (See Apple Hedge Fund Trading Activity on TipRanks)
The analyst points out that the in-vehicle CarPlay interface is a testament to its automotive expansion and integration, which can be a key growth driver. Additionally, Feinseth also looks forward to the launch of a virtual reality headset later this year or early 2023. The analyst believes the launch “can drive another paradigm shift for services and the AAPL ecosystem.”
Additionally, the company’s balance sheet and cash flow are strong enough to allow Apple to pursue growth initiatives and increase shareholder returns.
Feinseth, a five-star analyst at TipRanks, holds the 288thth Position among around 8,000 followed analysts. 57% of its reviews generated profits, and each review returned an average 10.6% return.
DHI Group (DHX), which offers a subscription-based careers marketplace for techies, leverages the competitive advantage of the 6.4 million technologist candidates currently subscribed to its two brands – Dice and ClearanceJobs.
Gary Prestopino, an analyst at Barrington Research, believes so DHI has the advantage of long-term secular demand for tech specialists. “DHI specializes in employment categories where there is a long-term surplus need for highly skilled technologists working in a variety of industries or with active state security clearances,” the analyst said. (See DHI Group Stock Chart on TipRanks)
Prestopino also noted that the global digital global technology employment capacity is expected to grow from 41 million in 2020 to 190 million in 2025, underscoring the immense opportunities in the market that DHI serves.
Additionally, the analyst was encouraged by the relatively cheap valuation for a company with such strong growth and profitability potential. “DHI is selling at a discount of over 60% to its peer group at the 2022 and 2023 TEV/EBITDA multiples,” said Prestopino, who opened coverage of the stock with a price target of $12.
Prestopino, who is also a five-star analyst at TipRanks, is ranked 61stSt among nearly 8,000 analysts followed on the platform. Interestingly, 55% of his reviews have successfully achieved 31.5% average returns each.
Last on analysts’ list of top stocks this week is McDonald’s (MCD) navigating another downturn in his life gracefully. BTIG analyst Peter Saleh, who ranks 600th out of around 8,000 analysts on TipRanks, gave us valuable insights last week into the company he’s long been bullish on.
To delve deeper into the company’s developments, the analyst interviewed several franchisees and took notes on their sales, demand and supply of plant-based meats, labor, raw materials and automation. After the survey, Saleh was encouraged by McDonald’s healthy sales trends, which seemed to defy inflated food and gas prices.
In addition, the analyst noted that labor and overtime reductions can result in a significant margin increase for the franchisees as labor availability improves. (See McDonald’s Blogger Opinions and Opinions on TipRanks)
“We see MC Donalds as one of the strongest restaurant concepts in the world, in the mid-stage of a multi-year sales recovery. After several years of lackluster results, management has restored sales and earnings growth through a combination of relevant menu offerings, restaurant upgrades, digital engagement and stronger leadership,” said Saleh, who also noted that these moves have improved sales trends.
The analyst reiterated a Buy rating on MCD stocks with a price target of $280.
Saleh has a 55% success rate with his reviews. In addition, each rating has achieved an average return of 9.8%.