- CNBC took a close look at recent Wall Street research to find stocks that analysts say are "compelling."
- Top picks include Oxford Industries, iHeartMedia, Archer Daniels Midland, Qorvo, and Aspen Technology.
CNBC examined the latest Wall Street research this week to find stocks that analysts say are "compelling" buys for investors.
This week Needham raised its rating on the stock to buy from hold. The company is best known as the maker of apparel brands like Tommy Bahama, Lily Pulitzer and others.
The firm said the anticipation of the shorter shopping holiday window may have caused some deceleration in the company's third-quarter earnings report in early December.
But now things are starting to look up for investors due to what the firm said was "better demand" than expected in the holiday season.
"Our checks also indicate fairly well-controlled discounting, giving us confidence about 4Q, analyst Rick Patel said.
"We also think that OXM has compelling growth drivers for each of its major brands in 2020 that can fuel sales," he said.
With Phase 1 of the U.S-China trade deal complete, there's one company that looks set to prosper according Buckingham.
Archer Daniels Midland reported strong fourth-quarter earnings this week and it could be a big year for investors of the global food processing and agricultural commodities company if analysts are to be believed.
"We believe the U.S./China Phase 1 trade agreement will gradually aid earnings across F20, but more specifically, during 4Q20 when U.S. crop prices are most competitive on a global basis," analyst Eric Larson said.
The firm said the company's growth is "compelling" and urged clients now is the time buy.
"With the potential aid of several improving 2020 micro/macro fundamentals, and self-help programs, we believe valuation and stock price downside risk is limited," he said.
B. Riley FBR upgraded iHeartMedia to buy this week and said the media communications company looks set to take advantage of the election season among other things .
"High-margin political revenues should provide a few points of incremental revenue growth in 2020. Moreover, core radio advertising could benefit, as well, with political ads crowding out TV inventory availability for non-political advertisers," the analyst said.
But the company's growth is still an area for investors to closely monitor when the firm reports earnings in late February.
"Among investors, the fear of sustained core revenue declines, plus relatively high leverage, is likely to remain an obstacle
for multiples," they said.
"Despite this mixed outlook for the group, we see a compelling setup for radio's largest player, over the next year."
"We upgrade OXM from Hold to Buy as we see lowered 4Q expectations as achievable and believe the company's positive momentum will continue in 2020. OXM reported solid 3Q results but noted a deceleration for 4QTD on Dec. 11th, partly due to the challenge of the shorter Holiday shopping window. Industry results thus far point encouragingly to better demand in the days leading into Christmas. Our checks also indicate fairly well-controlled discounting, giving us confidence about 4Q. We also think that OXM has compelling growth drivers for each of its major brands in 2020 that can fuel sales."
"The near-term outlook for ADM is improving, reflecting a new Phase 1 U.S./China trade deal, strong savings from the Readiness Program and excellent growth from Nutrition division. With the potential aid of several improving 2020 micro/macro fundamentals, and self-help programs, we believe valuation and stock price downside risk is limited; the setup for stronger 2020 earnings growth is compelling, particularly for investors with a 12-18 month investment horizon ... We believe the U.S./China Phase 1 trade agreement will gradually aid earnings across F20, but more specifically, during 4Q20 when U.S. crop prices are most competitive on a global basis."
"While our sense is that investors remain skeptical towards the radio broadcasting group, we see reasons to expect both healthy growth and multiple expansion for IHRT over the next year. Our upgrade is based primarily upon an increased long-term outlook for AEBITDA and FCF, versus our previous forecast. Additionally, despite our initial skepticism around Liberty Media's/SIRI's interest in acquiring IHRT, we now see, in a best-case scenario, Liberty's interest evolving into a deal announcement sometime this year. Even without a deal, we believe that Liberty's interest alone provides a sturdier floor for IHRT, relative to the rest of the group."
"We reiterate our Outperform rating on Qorvo and raise our price target to $135. The company posted a strong quarter and with a much better than seasonal guide on 5G strength in China, consistent with commentary from others. Qorvo was however the first to factor virus risk into guidance - while they haven't yet seen any effects, they provided preliminary guidance for a weaker than seasonal June in an effort to remain conservative. Virus concerns aside, Qorvo's 5G content story remains compelling, the stock's valuation remains reasonable despite recent gains, and we do see a path to higher earnings power, particularly as the high volume handset tier converts to 5G."
"Shares of Aspen trading down 15% in response to a mixed F2Q report offer a very compelling entry point for best-in-class vertical software name. We believe stock can outperform as second-half results come in ahead of now reset expectations. There is historical precedent of deals being delayed but ultimately closing and lifting the stock higher. Meanwhile, the fact that "core" performance is driving the business is a meaningful positive that is being underappreciated."