A hotter-than-expected consumer inflation reading spooked investors last week, but investors may want to adopt a long-term mindset as they seek buying opportunities.
Top Wall Street analysts are calling out their favorite stocks with a focus on their long-term growth prospects.
To that end, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Amazon
This week’s first pick is e-commerce and cloud computing giant Amazon (AMZN). Ahead of the company’s quarterly results, several analysts have been reaffirming their bullish views on the stock.
Mizuho analyst James Lee reiterated a buy rating on AMZN stock with a price target of $230. The analyst is incrementally optimistic that the revenue of Amazon’s cloud computing unit, Amazon Web Services (AWS), will accelerate in 2024. He stated that AMZN remains his firm’s top pick.
Based on Mizuho’s recently completed quarterly AWS customer survey with a leading channel partner, the analyst made some key observations. He said that there are signs of an accelerating sales cycle, given that AWS customers are seeking more executive business center meetings.
Further, the survey indicated that AWS clients are ending their on-premise data center contracts at a faster pace than previously noted, indicating accelerated migration of workloads into the cloud.
“We see accelerated budget trends as the channel partner that commissioned the survey estimated AWS spending growth of 20% YoY growth, consistent with our forecast, and above consensus at 15%,” noted Lee.
Lee ranks No. 428 among more than 8,700 analysts tracked by TipRanks. His ratings have been successful 59% of the time, with each delivering an average return of 11.5%. (See Amazon Stock Buybacks on TipRanks)
Acushnet Holdings
We move to golf products maker Acushnet Holdings (GOLF). The company generated net sales of $2.4 billion in 2023, reflecting a 4.9% year-over-year growth. The top line gained from increased sales volumes of golf balls, clubs and golf gear under the company’s Titleist brand.
Tigress Financial analyst Ivan Feinseth reaffirmed a buy rating on GOLF stock and increased the price target to $74 from $68. The analyst expects the company’s business to be boosted by new players entering the sport, a rise in rounds played and product launches across its industry-leading brands.
Highlighting favorable trends that would benefit Acushnet, Feinseth said that the golf industry has witnessed a continued increase in the number of new golfers over the past six years. Also, total rounds played surged to 950 million in 2023 from 800 million in 2019, with the momentum expected to continue.
“GOLF’s strong brand equity, driven by its best-in-class and industry-leading product lines, including FootJoy and Titleist, are major assets and the primary drivers of its premium market valuation,” said Feinseth.
The analyst also noted that Acushnet continues to boost shareholder returns with dividend hikes and share repurchases. The company recently increased its quarterly dividend by 10.3% and announced an additional share repurchase authorization of $300 million.
Feinseth holds the 243rd position among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, with each delivering an average return of 12.4%. (See Acushnet Holdings Hedge Fund Trading Activity on TipRanks)
BJ’s Wholesale Club
Finally, there is BJ’s Wholesale Club (BJ), a membership-only warehouse club chain. Goldman Sachs analyst Kate McShane upgraded BJ stock to buy from hold and increased the price target to $87 from $81.The analyst expects increased market share and improving industry trends to drive strong revenue growth.
McShane highlighted that the grocery category accounted for 86% of BJ’s merchandise sales in fiscal 2023. She expects better revenue outlook, given the return of volume growth in the grocery business and enhanced customer engagement in the general merchandise category.
The analyst anticipates that the general merchandise category will gain from the company’s efforts to refresh its assortment by adding new brands and higher quality merchandise as well as implementing initiatives to improve presentation and the timing of deals.
Additionally, McShane expects BJ to benefit from a potential increase in membership fees. The company has a membership base of more than 7 million accounts, backed by an impressive renewal rate of 90% in fiscal 2023.
“Ultimately, BJ is an attractive club model with a compelling value proposition and long runway for new club growth that should continue to gain market share over the long term,” said McShane.
McShane ranks No. 959 among more than 8,700 analysts tracked by TipRanks. Her ratings have been profitable 62% of the time, with each delivering an average return of 5.1%. (See BJ’s Ownership Structure on TipRanks)
Source: Investing - cnbc.com
