Top Wall Street Analysts Pick Favorite Stocks at End of Earnings Season

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Ford CEO Jim Farley poses with the Ford F-150 Lightning pickup truck in Dearborn, Michigan on May 19, 2021.

Rebecca Cook | Reuters

It seems like every passing trading session brings a torrent of quarterly earnings and big swings for the stocks of reporting companies.

Positive impressions can cause low volume stocks to jump after office hours or sell before market as profit takers take hold. In general, short-term trades are considerably more unpredictable, while the long-term outlook can provide more stable paths for stocks.

Top analysts have highlighted these five companies, most of which have released their latest quarterly results, according to TipRanks, which tracks top-performing stock pickers.

Being a major automaker in the midst of a global semiconductor shortage that has been going on for months is not an enviable position. However, Ford Motor (F) managed to weather the storm throughout the third quarter and print impressive results. The company has ambitiously turned to a full electric vehicle (EV) pipeline and has several other promising opportunities up its sleeve. (See the analysis of Ford stocks on TipRanks)

Philippe Houchois of Jefferies wrote that Ford’s upcoming product line will help it continue to generate valuation gains. He added that “industry leading product activity, structural cost reductions and a lower margin starting point (to date) should better allow Ford to offset standardization in our view.”

Houchois valued the stock as a buy and raised his price target from $ 17 to $ 20.

The analyst was encouraged by the tone of management when announcing the company’s results. He believes Ford’s leadership is tactically maneuvering in the uncertain waters of the industry and managing inventory well with its make-to-order strategy.

There is a gap between Ford’s current valuation and its gross margins, and Houchois believes the historic automaker has an advantage over its share price. He mentioned that “many strategic levers remain available to improve market and product exposure” and that the company’s healthy balance sheet will provide sufficient leverage to achieve its aspirations for electric vehicles.

Out of more than 7,000 analysts, TipRanks ranked Houchois 304th. His stock picks were successful 64% of the time, and his average return per rating was 31.6%.

As the Covid-19 pandemic spread across the world, people trapped at home turned to the internet for activities that occupied them. It seems like almost every cloud-based or internet-based business has seen a boom in the past year and a half. This is also true for the Coursera e-learning platform (COURT), which recently posted impressive third quarter results. (See Coursera News Sentiment on TipRanks)

Ryan MacDonald of Needham & Co. reported that Coursera had a good quarter of accelerated business performance, helped by a record number of enrolled students. He added that the results and directions of the company “highlight the strong and improving fundamental profile of the company and its exposure to attractive end market trends”.

MacDonald valued the stock as a buy and indicated a price target of $ 45.

The analyst was confident in the company due to the difficult comparisons with which it was compared from quarter to quarter. He said that Coursera’s success shows “the strength of the B2B end-market”.

The growing number of users during the third quarter was particularly significant due to the easing of restrictions related to the pandemic. MacDonald expects Coursera’s pipeline to continue to generate valuation gains.

MacDonald is ranked 169th out of over 7,000 financial analysts by TipRanks. He has a 66% pass rate and his grades brought in an average of 48.8% per grade.

Caesars Entertainment (CZR) had a productive third quarter, as noted in its recent earnings release. Its properties in Las Vegas have boosted the business and boosted analysts’ confidence in its physical activity.

Carlo Santarelli of Deutsche Bank said the company has “got off to a good start in Las Vegas” for the fourth quarter, and is expected to have a favorable season ahead. He mentioned that Caesars’ marketing campaigns have been successful in attracting new bookings and increasing revenue. (See Caesars Entertainment website traffic on TipRanks)

The bullish analyst valued the stock as a buy and gave it a price target of $ 132 per share.

In addition to its traditional streams of hotels and casinos, Caesars is experiencing some bullish trends in its sports gaming services. Additionally, the company’s New York State online sports betting license may receive regulatory approval, which would act as a catalyst for the upswing.

Separately, Santarelli noted a possible divestiture of assets in the first half of fiscal 2022. This could include a property in Las Vegas and would help lighten the company’s balance sheet.

Of more than 7,000 analysts, Santarelli is ranked No. 102. He has a 71% success rate and his stock picks have returned an average of 42.8%.

Batteries are a central piece of the puzzle as the adoption of electric vehicles grows. Battery production costs have contributed to the high prices of the majority of electric vehicles, and it is vital for electric vehicle manufacturers to maintain a constant supply of lithium carbonate in order to meet the high demand. A significant part of the light metal is mined in Argentina, where Lithium Americas (LAKE) offered to acquire another lithium manufacturer. (See Lithium Americas stock charts on TipRanks)

The situation of the large lithium miner was detailed in a report by Laurence Alexander of Jefferies, who wrote that the offer to absorb Millennial Lithium (MLNLF) would significantly expand LAC’s operations in the element-rich province of Salta in northern Argentina. He added that Millennial’s properties are based on approximately 40 years of “battery grade lithium carbonate” deposits.

Alexander valued the stock as a buy and calculated a price target of $ 34. This target came as a significant increase from its previous one at $ 22 per share.

The proposed acquisition would provide Lithium Americas with sufficient leverage to properly meet the exponentially growing demand for the extracted resource. If miners are to capitalize on the wide gap between supply and demand, Alexander expects them to “come together 6 to 12 months” before “the balance tightens.”

However, it is important to note that BAC’s advantage depends on several macroeconomic factors beyond its control. Regulatory sentiment towards electric vehicles, South American tax policies, and severe weather events can all affect production costs and production.

Alexander earned a position of No. 447 out of over 7,000 other analysts. He was successful 64% of the time and has an average return of 17.1%.

Shoe and fashion retailer Steve Madden (SHOOT) exceeded Wall Street consensus estimates for earnings per share and income. The company experienced high sales levels, helped by its e-commerce flows. The retailer and its brands are poised for the rise, according to Sam Poser of Williams Trading. (See Steve Madden’s Risk Factors on TipRanks)

Poser expressed his bullish sentiment on the stock by pricing it at a buy and stating a price target of $ 59.

The analyst believes the indicators point to a high level of demand for Steve Madden’s offerings, and he believes his brands have a bright future in the short and long term. The company has mitigated the effect of supply side constraints and effectively managed its inventory. Poser mentioned that “in the face of supply chain disruptions, SHOO maintains its relative speed to market advantage and gains market share.”

In addition to the company’s loyal base, its marketing department has been successful in generating engagement with new customers. By taking a page from its own ad book, the new “Maddenverse” campaign created nostalgia for the previous generation of buyers and sparked the interest of younger groups. More generally, Poser praised the company for its “chameleon-like ability to deliver a trendy product”.

Beyond these positive attributes, Poser expects the current burden of amplified shipping and logistics costs to give way to better margins and higher profits.

TipRanks calculated Poser as # 112 out of over 7,000 professional analysts. He was successful in his grades 61% of the time and collectively they had average returns of 55.3% per grade.

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