With the market back at a record, Wall Street's top analysts think these stocks can go even higher
Stocks are once again at record high levels — with the S&P 500 now up over 21% on a one-year basis. That's following Fed Chair Jerome Powell's more-relaxed inflation targeting strategy, impressive second quarter earnings and encouraging US-China trade talk progress. And while there are now a staggering 24 million cases of coronavirus worldwide, the approval of Abbott's 15-minute Covid-19 test does provide further reopening optimism.
However the knock-on effect is that upside potential is looking increasingly limited. How much further can the rally take us? To find stocks poised to outperform, it's worth focusing on those companies that can deliver strong growth in expanding markets. Here we look at six stocks that do just that — and what's more, all these stocks have received bullish calls from the Street's top analysts over the last week. In fact, three of these stocks have just received a new Street-high price target.
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TipRanks analyst forecasting service attempts to pinpoint Wall Street's best-performing analysts — so investors can follow analysts that tend to get it right. These are the analysts with the highest success rate and average return measured on a one-year basis — factoring in the number of ratings made by each analyst.
Here are the best-performing analysts' six favorite stocks right now:
Online sports betting company DraftKings has just received the thumbs up from five-star Northland Securities analyst Greg Gibas. He reiterated his buy rating with a $50 price target after Illinois reinstated remote registration —helping DraftKings capture early market share in the state.
"This positive development comes a few weeks ahead of the NFL season kickoff, a time when many operators will likely ramp up promotional and marketing activity. We therefore believe this is one of the best weeks for this announcement to happen" the analyst cheered.
Gibas sees multiple tailwinds for 2H20 including pent-up consumer demand due to the lack of 1H20 sporting events, and the pandemic's impact on consumers spending more time at home.
That's alongside a heavy 2H20 sports calendar, with the NBA, NHL, and MLB holding regular season and playoff games, the NFL season, and five golf and tennis majors.
"The company's premier brand reputation, asset-light business model with vertical integration, cross-sell potential on its established user base, technology infrastructure, and unique/ sustainable differentiation makes DraftKings a compelling long-term pure-play investment" Gibas told investors on August 25.
Thanks to his strong stock picking skills, the Northland analyst is currently tracking a 73% success rate and stellar 43.7% average return per rating.
Wedbush's Daniel Ives has just boosted his Apple stock price forecast from $515 to a Street-high $600- and established a new bull case price target of $700. This is way ahead of the average analyst price target of $445.
Driving this bullish sentiment is the upcoming iPhone 12 'supercycle'. According to Ives, Apple has a "once in a decade" opportunity over the next 12 to 18 months with roughly 350 million of 950 million iPhones worldwide ready for an upgrade.
"Taking a step back we believe iPhone 12 represents the most significant product cycle for Cook & Co. since iPhone 6 in 2014 and will be another defining chapter in the Apple growth story looking ahead despite a softer consumer spending environment in our opinion" Ives wrote on August 26.
He believes many analysts are underestimating the massive pent-up demand around this supercycle for Apple, telling investors this remains the key opportunity for bulls heading into 2021.
"We maintain our Outperform rating with Apple being our favorite name to play the 5G theme and strongly believe a further re-rating of Apple's stock is on the horizon as Cupertino heads into this transformational iPhone product cycle" the analyst concludes.
With an 18.2% average return per rating, Ives comes in at #165 out of over 6,900 analysts tracked by TipRanks.
For top B.Riley FBR analyst Mayank Mamtani, Novavax's unwarranted pullback represents a buying opportunity. He reiterated his NVAX buy rating on August 26 with a $257 stock price forecast, indicating massive upside potential of 124%.
Mamtani is optimistic about the outlook for Novavax's NVX-CoV2373, an adjuvanted recombinant protein coronavirus vaccine candidate.
"We recommend investors take additional advantage of the recent stock weakness, i.e., -40% off its 52-week high reached after NVAX delivered compelling Ph. I data reaffirming the best-in-class immunogenicity and reactogenicity profile of NVX-CoV2373" the analyst wrote.
He argues against the prevailing bearish sentiment on NVAX potentially falling behind in the second wave of coronavirus vaccine candidates given the Ph. III initiation timeline in early October- and robust breadth of the ongoing Phase II studies.
"With the large-scale manufacturing and global supply arrangements being put in place, we believe NVAX is well poised to catch up to its more advanced peers" sums up the analyst.
Most importantly, Mamtani views all Ph. III outcomes from MRNA and PFE/BNTX's vaccine candidates, likely in Sep-Oct, to work in Novavax's favor. Positive results would provide a clear validation of immune response- while failure would elevate '2373 as the most optimal solution.
Cloud-based data planning platform Anaplan is 'pivoting to succeed in the throes of this crisis' exclaims Monness analyst Brian White.
Anaplan has just delivered excellent 2Q:FY21 results while serving up a strong outlook with a healthy pipeline of business. For instance, 2Q:FY21 revenue of $106.5 million surged 26% year-over year and easily beat the Street estimate of $103.5 million.
As a result, White increased his stock price forecast from $55 to a Street-high $74 (27% upside potential). For FY:21, he also boosted sales estimates to $438.8 million (up 26%) from $433.8 million and narrowed his loss per share to $0.32 from $0.42.
"We believe the next-gen planning market remains in the nascent stages of development and Anaplan is still very early in penetrating its top customers" commented White on August 26, adding "this crisis will accelerate digital transformation, benefiting Anaplan."
He notes that PLAN is successfully adjusting its go-to-market engine and beginning to experience the tailwind of organizations accelerating digital transformation initiatives. And looking ahead, White expects PLAN to unveil new innovations around predictive AI and intelligence techniques at its virtual Digital CPX event in September.
This five-star analyst is ranked #14 out of 6,904 analysts tracked by TipRanks.
Oppenheimer's Andrew Uerkwitz is bullish on video games giant Activision Blizzard ahead of the next Call of Duty (CoD) game launch on November 13 (at $60, with a $70 cross-gen edition, and a $90 ultimate edition).
For the first time in the CoD series, Activision has debuted its game trailer for Call of Duty: Black Ops Cold War in-game after players complete a series of Warzone tasks.
"Initial online hype looks strong (e.g., several CoD streamers set viewership records)" applauded Uerkwitz on August 26. He notes that the franchise is still farming nostalgia, still deeply integrating the new title with Warzone, and still using familiar weapon systems.
Meanwhile pricing remains approachable and simplified, with Uerkwitz noting that one interesting new feature is more player choice in the single player-character creator, dialog choices, and multi-path-single-objective levels.
In short, Black Ops Cold War appears to have a lot of features that worked from Modern Warfare while adding many new things that make the game stand on its own. "Given tight integration with Warzone to continue, we see little reason to believe record setting momentum won't continue" Uerkwitz concludes.
Boasting a 21.1% average return per rating, the analyst is ranked #143 out of 6,900 tracked analysts. He has a buy rating on ATVI with a stock price forecast of $95.
Top Mizuho Securities analyst Dan Dolev has now initiated coverage on nine US payment companies. And one of his top picks is mobile payment company Square.
The analyst's new buy rating comes with a Street-high price target of $225, indicating significant upside potential of 46%.
According to Dolev, SQ's 'best-of-breed technology' means it is best positioned to benefit from 'tectonic' small to medium-sized business (SMB) disclocation. "We expect SMB dislocation to cause tectonic shifts in the $85bn US merchant acquiring and ancillary services TAM [total addressable market] over the coming years" the analyst writes.
He estimates that SQ's outsized incremental share gains coupled with a historic SMB dislocation post coronavirus could help drive $400mn, or 20-30%, incremental gross profit (GP) opportunity for SQ's merchant acquiring (Seller) business.
Plus its neo-banking Cash App could drive 4x growth in gross profit thanks to superior unit economics. "Cash App ain't stopping at 30mn users. Our analysis shows users may double by 2023" the analyst wrote on August 26.
Just recently, for example, SQ started testing lending on Cash App – with short-term loans of up to $200. According to Dolev, such initiatives significantly expand the TAM, driving even better than expected Cash App GP over the long-term.