Top Wall Street analysts see strong potential in these five stocks
The name Rivian appeared on one of the new electric SUVs on December 16, 2022 in San Diego, USA.
Mike Blake | Reuters
There is more to investing in the right stocks than buying them after the earnings report.
Investors are better informed by seeking the opinions of Wall Street analysts, especially when they delve into the details of companies’ quarterly results.
Here are five stocks selected by top Wall Street analysts, according to the TipRanks platform.
First on this week’s list is a cloud-based customer relationship management software provider Sales force (RCMP). The company recently announced that it will raise the prices of some of its cloud products by an average of 9% starting in August.
This was Salesforce’s first price increase in seven years. Additionally, it comes at a time when cloud players are under pressure as customers optimize IT spending due to macroeconomic challenges. (See Salesforce blogger reviews and opinions on TipRanks)
BMO Capital analyst Keith Bachman believes the company’s new generative artificial intelligence products and its core cloud products, including sales, service and marketing clouds, as well as price increases for Tableau, could drive growth in fiscal 2025 (calendar year 2024).
The expert said that generative AI will increase the importance of data and give an advantage to companies that help to consolidate, store and protect data. “We think Salesforce is well-positioned to help companies leverage data, including GenAI,” Bachmann said.
Bachmann reiterated his buy rating on Salesforce and raised his price target to $255 from $245. He is ranked #463 out of over 8,500 analysts tracked on TipRanks. In addition, 59% of its ratings were successful, with an average success rate of 8.6%.
PC manufacturers including Dell (Dell), faced significant headwinds as demand for desktops and laptops slumped after the pandemic worsened.
However, Deutsche Bank analyst Sidney Ho noted that recent data on the PC supply chain shows inventories have normalized, raising hopes that PC shipments could be above seasonal levels in the second half of 2023.
Ho sees Dell’s Customer Solutions Group (CSG) raising its second-quarter revenue forecast, which will be “approximate” compared to the quarter. Additionally, Gartner data shows a gradual improvement in enterprise demand trends, which bodes well for Dell as it has a significantly higher market share of 23% in the commercial PC market compared to 9% in the consumer PC market. However, Ho warned of lingering risks in the server market.
“Besides the cyclical downturn, we believe a strong capital return program could be a source of EPS upside for DELL, especially as its leverage ratio approaches its target level,” explained Ho.
Ho raised his price target on DELL to $60 from $48 and reiterated a buy note. The analyst is ranked #65 out of over 8,500 analysts on TipRanks. Ho rankings were profitable 66% of the time, with an average return of 23.9% each. (See DELL Insider Trading on TipRanks)
Next up on our list is an American electric vehicle manufacturer Rivian (EAT), which surprised investors earlier this month with higher-than-expected shipments in Q2. The company also confirmed its annual production plan of 50,000 vehicles for 2023.
Mizuho analyst Vijay Rakesh sees potential for Rivian to exceed its production target of 50,000 units. The analyst noted that the company is doing well, with second-quarter production up 49% quarter-on-quarter to around 14,000 units, easily beating forecasts for 23% growth.
“We see strong 1H23 delivery of RIVN position for 2H23E and subsequent ramps,” said Rakesh, who is ranked 32nd among more than 8,500 analysts on TipRanks. (See Rivian’s Financial Statements on TipRanks)
The analyst raised the delivery estimate for Rivian’s R1 vehicle lines for 2023 from 37,000 to around 39,000 units, while keeping its VED (electric delivery vans) estimate at 11,000. The analyst expects Rivian to deliver 92,000 and 115,000 vehicles in 2024 and 2025, respectively.
Consistent with his bullish stance, Rakesh raised his price target on RIVN to $30 from $27 and maintained a buy rating. Rakesh has a success rate of 64% and each of his posts returns an average of 23.9%.
Also, Rakesh at Mobileye Global (MBLY), an Israeli provider of self-driving technology. According to the analyst, the latest trends in electric cars and advanced driver assistance systems (ADAS) bode well for Mobileye.
Rakesh noted that Mobileye’s main customer, Geely Automobile-owned electric vehicle brand Zeekr, is ramping up production, with installations up 80% to 27,000 in the June quarter. This means a strong outlook for Mobileye SuperVision systems in June and September.
The analyst now expects SuperVision units to grow 83% to 163,000 this year, up from 150,000 previously. He also believes that problems with Volkswagen’s Cariad software could create new opportunities for SuperVision at Porsche and other Volkswagen brands.
Rakesh raised his price target on MBLY to $48 from $43 and reiterated his buy rating on the stock. “We see MBLY as well positioned with a market share of around 70% and a strong AV (autonomous vehicle) track record,” he said. (See Mobileye Hedge Fund Trading Service on TipRanks)
The rapid growth of OpenAI ChatGPT has created a great deal of interest in generative artificial intelligence. Tech giants, including parent company Google Alphabet (GOOGLE), has joined the race and is investing heavily to capitalize on opportunities in this space.
Tigress Financial Partners analyst Ivan Feinset said the growing integration of AI functionality into Alphabet’s search, mobile, cloud, data center, home automation, autonomous vehicle technology and more. including that it believes it will help maintain its dominance in all major technological trends.
He also expects the company to benefit from the integration of the Android operating system into Internet of Things devices. It also benefits from the adoption of Android as the primary driver of their infotainment platforms by several major automotive equipment manufacturers.
In addition, GOOGL continues to develop and strengthen its product portfolio through strategic acquisitions and collaborations, including those focused on AI technology. Indeed, the company backs startup IA Anthropic.
“GOOGL’s strong balance sheet and cash flow will allow it to continue to improve shareholder returns through continued key growth initiatives, strategic acquisitions and share buybacks,” Feinset said.
Fineseth raised its price target on GOOGL to $172 from $160 and maintained a buy rating on the stock. The analyst is ranked #201 out of over 8,500 analysts on TipRanks. His ratings were effective 61% of the time, with each rating generating an average return of 13.2%. (See Alphabet Stock chart on TipRanks)
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