These stocks are compelling growth stories and offer portfolio protection, analysts say

Published Sat, Mar 19 20228:17 AM EDT

With rising inflation and economic uncertainty, Wall Street analysts unveiled a slew of stocks this week that are poised to soar in this broad macro environment. The list of companies includes some surprising names with defensive characteristics, and analysts believe these stocks are just too attractive to ignore. CNBC Pro combed through the top Wall Street research to find some of the most compelling buying opportunities right now. They include: Alphabet, Casey's General Stores , Workday , Wendy's and Shift4 Payments. Casey's General Stores Rising gas prices are no match for Casey's, according to investment firm Berenberg. The convenience store chain reported strong fiscal third-quarter results earlier this month. Analyst Brian McNamara says this should soothe investor concerns about inflation and increasing oil prices. "We believe this result should be well received, given ytd share price underperformance, as a major concern – expenses seemingly running out of control – has been assuaged, " he wrote. McNamara said in his note to clients that Casey's continues to make great progress with its fresh food offerings and increasing foot traffic inside the store. In fact, breakfast same-store sales were up 17% in the last quarter compared to the prior year. Casey's also reported strong sales of snacks, candy, pizza and non-alcoholic drinks, the firm said. Taken together, McNamara said Casey's is well positioned going forward. "With 75% of its transactions in-store non-fuel related, we believe CASY will be able to weather the storm," he said. Shares climbed nearly 10% this week. Wendy's The international fast-food chain is firing on all cylinders, Guggenheim analyst Gregory Francfort said in a note earlier this week. The firm said its optimism is based in part on the ongoing strength in foot traffic as consumers begin to dine out again. "We think 2022 WEN same-store sales are likely to stay strong, and we estimate upside to consensus," he said. In addition, Wendy's should benefit from the launch of breakfast in the Canadian market, as well as robust growth in Latin America, the firm said. Rising food costs and inflation are concerns, but Wendy's is strongly positioned to combat them, Francfort added. "WEN is not any more exposed to these issues than peers and the franchised model generally provides insulation from this having a meaningful impact on profits in the short to medium term," he wrote. Shares are down 6.6% this year, but the stock is still undervalued, according to the firm. Francfort's note calls Wendy's a "compelling growth story to weather global uncertainty." Shift4 Payments There's no "pandemic hangover" for shares of Shift4 Payments, according to D.A. Davidson analyst Christopher Brendler. Shares of the payment processing company are down more than 30% over the past year, but the firm says the sell-off is "misplaced." Brendler said in a recent note to clients that the stock is a "fantastic buying opportunity in one of the most compelling growth stories in payments." With customers in the hospitality, leisure and restaurant industry, Shift4 payments is poised for the recovery, the firm added. "FOUR fits the bill perfectly with an amazing underlying growth story that will be even better as its core hospitality vertical normalizes," Brendler said. In addition, Brendler says the stock is "relatively insulated" from the situation in Russia and Ukraine, urging clients to accumulate shares. "With the market now more concerned about geopolitics and interest rates than Covid, we're excited to see how Shift4 performs at full speed," he said. Workday - Wells Fargo, Overweight rating "Favored Names in a 'low for longer', more defensive environment: … WDAY - among the cleanest 2022 setups in software, with improving demand across multiple segments of the business expected to drive an uptick in growth for this relatively more defensive software platform, 7.5x EV/S, < 30x EV/FCF represent multi-yr lows. … On the recentFQ4 earnings call management noted it does not expect any geopolitical impact to the currentFY23 sub revenue growth outlook of 22%." Wendy's - Guggenheim, Buy rating "A compelling growth story to weather global uncertainty. … We think 2022 WEN same store sales are likely to stay strong, and we estimate upside to consensus. … WEN is not any more exposed to these issues than peers and the franchised model generally provides insulation from this having a meaningful impact on profits in the short to medium term." Shift4 Payments - D.A. Davidson, Buy rating "In payments, we clearly prefer platforms with leverage to the recovery rather facing a pandemic hangover. FOUR fits the bill perfectly with an amazing underlying growth story that will be even better as its core hospitality vertical normalizes. … We view this sell-off as misplaced, creating a fantastic buying opportunity in one of the most compelling growth stories in payments. … With the market now more concerned about geopolitics and interest rates than Covid, we're excited to see how Shift4 performs at full speed." Casey's General Stores - Berenberg, Buy rating "Fiscal 2023 outlook reiterated, with implied Q4 operating expenses guided below, which should allay some investor concerns. … We believe this result should be well received, given ytd share price underperformance, as a major concern – expenses seemingly running out of control – has been assuaged. … With 75% of its transactions in-store non-fuel related, we believe CASY will be able to weather the storm." Alphabet - Baird, Outperform rating "We have an Outperform rating, based upon Alphabet's unparalleled technology platform and opportunities in multiple compelling growth verticals. Google, an Alphabet subsidiary, is the dominant leader in the online advertising market and is poised to benefit from the ongoing secular growth tailwinds in search and display advertising as well the explosion of mobile."

People wait on line at a Wendy's location

Scott Mlyn | CNBC

With rising inflation and economic uncertainty, Wall Street analysts unveiled a slew of stocks this week that are poised to soar in this broad macro environment.