The McDonald’s logo is seen at a restaurant in Arlington, Virginia, on January 27, 2022.
Joshua Roberts | Reuters
It seems that inflation, rising oil and other commodity prices, and geopolitical instability are affecting almost every industry.
Now, the arrival of earnings season brings another item for investors to consider.
Rather than focus on the short-term volatility these events can create, investors should keep a long-term perspective. Wall Street’s top professionals are highlighting their favorite stocks for these tough times, according to TipRanks, which tracks top-performing analysts.
Here are five stocks that have caught the eye of analysts.
As nations assess military spending, there could be more investment in big data companies like Palantir (PLTR). The software analysis firm has two segments, government and commercial, and produces unique solutions for its clients.
Although its growth has been slower than that of its peers, Palantir remains profitable and continues to spawn next-generation innovations, taking a “path less followed” compared to typical Big Tech names. At least, this is according to Brian White recent report by Monness, Crespi, Hardt & Co. (See Palantir Risk Analysis in TipRanks)
White initiated the coverage of the stock with a buy and assigned a price target of $20.
He noted that Palantir has “stayed true to its core values, fostering a distinct culture and developing unique software.”
The story of digital transformation is not a new one, however, White believes that many entities are still in the early stages of properly adopting big data analytics and the cloud as their top priorities.
White wrote that PLTR has “strong revenue growth, pioneering status in an emerging software category, software development that disrupts existing legacy solutions…and a tremendous market opportunity.”
On TipRanks, White holds 178th place out of nearly 8,000 analysts. His stock picks have been successful 64% of the time and he has averaged a 29.1% return on each.
Digital innovations have helped McDonald’s (DCM) make self-service processes more efficient, optimize delivery capabilities, and drive brand loyalty through its rewards program. The multinational restaurant is well positioned to continue providing returns to shareholders.
Ivan Feinseth Tigress Financial Partners noted that “MCD’s growth initiatives, including AI-powered voice ordering, digital marketing, new delivery partnerships, supply chain management and continued innovation, will continue to drive sales.” long-term business trends and market share gains.
Feinseth called the shares a buy and stated a price target of $314 per share.
mcdonald’s recent partnership with IBM (IBM) will integrate artificial intelligence technology into its self-service segment, significantly improving the customer experience and enabling higher order rates. As for its McDonald’s application, the improved loyalty program allows customers to award points for their purchases, thus materializing in repeated visits.
The fast-food corporation reported strong quarterly results in January, posting its highest U.S. full-year comparable store sales, fueled by a “stellar performance from McRib coupled with strong demand for its crispy chicken sandwich.” according to Feinseth.
The analyst anticipates that McDonald’s will continue to pay dividends and buy back shares. (Watch McDonald’s Corp dividend data. in TipRanks)
Out of over 8,000 financial analysts, Feinseth is ranked 75th. He has a 66% win rate, along with an average return of 29.5% on each pick.
Tesla (TSLA) recently started the inauguration of its factory in Austin. The plant has been a long time coming for many investors, and the CEO is waiting for it. Elon Musk to become the flagship production site for its various vehicles, including the highly anticipated Cybertruck.
Domestically, the company is light years ahead of its competition, which has found it quite difficult to get its operations up and running smoothly, according to dan ives of Wedbush Securities. He also expects the factories in Austin and Berlin to boost Tesla to produce 2 million vehicles by the end of this year. For context, that’s 100% more than the EV maker made in 2021. Austin will account for a quarter of this amount.
Ives reiterated his buy rating on the stock and maintained his $1,400 price target.
Describing it as a “high-class problem of demand outstripping supply,” Ives said Tesla Model Y orders are about half a year behind schedule. While this is something that gives the business clear visibility into its upcoming revenue, it can’t capitalize properly if it can’t fulfill orders. Also, consumers will go elsewhere if they can’t get their new cars. (Watch Tesla Website Trends in TipRanks)
Finally, the Berlin plant is intended to collect all European deliveries, which until recently were produced by the Shanghai factory. This system of shipping vehicles around the world was unsustainable at best and is set to decline as Berlin grows.
Ives is ranked 332nd out of nearly 8,000 professional analysts. He is right when he picks stocks 59% of the time and has averaged 23.2% on each rating.
jonathan ruykhaver de Baird recently reported on the actions, saying “cloud-native architecture, single intelligent agent, real-time cloud-scale artificial intelligence, integrated platform and scalability [are] key innovations that create a strong competitive moat and barriers to entry”.
Ruykhaver called the shares a buy and raised his price target to $275 from $225.
Stating that CrowdStrike “has no shortage of growth opportunities,” the analyst cited the cybersecurity firm’s execution regarding the modules of its products available to consumers. He noted that CRWD has increased its large number of modules by more than 100% since going public.
This wide range of offerings provides a sticky ecosystem for its customers, a paramount quality in such a competitive market. (Watch CrowdStrike Hedge Fund Activity in TipRanks)
Ruykhaver specified that “FalconXDR, Cloud Solutions, Fusion, and records management” fueled growth and brought CrowdStrike into a competitive position among its peers.
Out of nearly 8,000 analysts, Ruykhaver ranks eighth. He has been successful in rating stocks 81% of the time and has an average rate of return of 57.1%.
However, the pandemic and its trends have largely calmed down in recent months and Chewy’s valuation has suffered as a result. Despite this, doug anmuth JPMorgan’s doesn’t think the core business of equities is any less attractive. In his report, the analyst believes that it is the “largest pet retailer in the US”, in a “growing and very attractive category that is in the early stages of change online”.
Anmuth called the shares a buy and offered a price target of $55.
He foresees growth for the company in its pharmacy segment and room for international expansion. The analyst anticipates active customer growth to pick up through the end of the year and into 2023. Until then, he projects revenue growth of 16% for the current fiscal year. (Watch Chewy Stock Charts in TipRanks)
Despite these bullish factors, near-term challenges still mount for Chewy. Inflationary pressures and supply chain constraints remain uncertain and difficult to manage. No retailer wants their products to be unavailable, especially when their customers can shop elsewhere.
However, gross margins are expected to expand, “well beyond the 25-28% range with the rise of new initiatives including fresh and prepared foods, health and wellness, including insurance and advertising, which should have more impact.” in 2023,” Anmuth said.
Anmuth is ranked 273rd out of nearly 8,000 expert analysts in the TipRanks database. He has a 54% success rate and earns an average of 26.6% on his grades.