Visitors browse the display of Expedia during the International Tourism Fair in Berlin.
Fabrice Bensch | Turners
Geopolitical tensions, the prospect of a Federal Reserve rate hike and inflation fears rattled the stock market and left investors unsettled.
The major indexes have just recorded a second straight week of losses, and the conflict between Russia and Ukraine continues to simmer.
Investors are looking for advice and a reminder to keep a long-term perspective. Top analysts are calling their favorite picks even in these turbulent times, according to TipRanks, which tracks top-performing analysts.
Here are five stocks these Wall Street pros are highlighting.
Cloudy (REPORT) is becoming a key player in the field of cybersecurity. The company has acquired customers and seen its retention rates increase, and its recent earnings report shows it. (See Cloudflare revenue data on TipRanks)
Needham & Co.’s Alex Henderson wrote that “Cloudflare’s powerful technology is capable of solving critical problems and facilitating growing technology trends.” He said: “We recommend investors buy and hold NET, even with the turmoil in interest rates and valuations. We are confident in the name.”
Henderson reiterated his buy rating on the stock and he added a price target of $245 per share.
The analyst also pointed to Cloudflare’s strong earnings performance last quarter, which saw an acceleration in revenue and an increase in forecasts above Wall Street consensus estimates. Henderson still believes the tips are conservative and ready to generate easy income in the future.
The analyst wrote that he sees Cloudflare in a separate space, currently “moving from investing in the network and a freemium customer capture model to developing deeper service features.”
Henderson is ranked by TipRanks 66th out of more than 7,000 analysts. He successfully priced stocks 66% of the time, and he returned an average of 35.3% on each one.
The holiday season typically brings with it massive volumes of travel and vacation planning activity, but for companies like Expedia (EXPE), last year was different. The omicron variant of Covid-19 has caused a new wave of pandemic-related cancellations. However, the title now looks set for a solid summer ahead.
That’s the view of Wells Fargo’s Brian Fitzgerald, who predicts a recovery in demand for the travel booking company as omicron fears ease. Additionally, the company recently released encouraging quarterly results despite the drop in travel at the end of 2021. (See Expedia website traffic on TipRanks)
Fitzgerald priced the stock long, and he raised his price target to $250 from $225.
While cancellations spiked over the holiday season, they weren’t enough to overwhelm the company’s financial situation. Additionally, the wave had less impact on Expedia compared to the previous delta variant. This can help ease investor qualms about the stock if the trend is to continue.
The analyst was confident in his tone, writing that “EXPE remains our favorite play on the recovery of the online travel sector.” He thinks the summer can prove lucrative, especially with international and city travelers.
It is important to note that the uncertainty related to Covid-19 may still cause EXPE to see short-term volatility. However, Fitzgerald noted that the company has made significant progress “in key initiatives – streamlining brand strategy and technology platforms, and accelerating the pace of innovation/execution.” Expedia is ready to accelerate its long-term upside-catalyzing loyalty program, he added.
Out of more than 7,000 financial analysts, Fitzgerald ranks 105th. His stock picks were correct 59% of the time, and he averaged a 41.1% return on each.
Coursera (COURT), the adult online course platform, went public last year during the pandemic, but its price has since plummeted. However, its margins are promising and the company continues to evolve its business.
Stifel’s Scott Devitt recently discussed Coursera’s quarterly results, in which the company beat Wall Street consensus estimates for revenue and its 2022 forecast. The analyst attributed high subscriptions to Coursera Plus and “increased demand of career-oriented certificates and specializations” as reasons for higher margins.
Devitt priced the stock long and raised his price target from $25 to $26.
Writing about the current shift to Coursera’s offerings, Devitt noted that its management has indicated “growing confidence that the shift to lower-cost industry partner content is unlikely to reverse itself in any meaningful way.” given current trends, which implies a significant increase in the long-term gross margin potential of the business.”
Beyond this macro trend, Coursera sees its users turning more to content from higher-margin industry partners, more than more expensive content from educators. (See Coursera stock charts on TipRanks)
Despite slight challenges such as the more employee-friendly job market driving potential users away from Coursera, the company’s total addressable market remains large and its industry leadership position is stable.
Devitt is ranked above more than 7,000 expert analysts on TipRanks, ranking at No. 356. He has found success with his stock ratings 52% of the time, and he has returned 24.1% on average per note.
Intel (INTC) is the largest semiconductor company by revenue, although it has lagged other large companies in the level of complexity of its chips. The company has expanded its infrastructure and business model since its new CEO took over the reins about a year ago and recently announced it would buy chipmaker Tower Semiconductor.
Quinn Bolton of Needham & Co., wrote in a report that the deal is valued at approximately $5.4 billion and “will bring a wide range of specialist process nodes to [Intel Foundry Services] which nicely complement Intel’s advanced node processing capabilities.” (See Intel’s dividend data on TipRanks)
Buying Tower will add seven fabs to Intel’s manufacturing capabilities, along with an “established foundry ecosystem” and pre-existing customer base, the analyst wrote.
Bolton priced the stock for buy and set a price target of $60 per share.
Intel is in the process of fundamentally transforming its business model. The long-term projections are promising, despite Intel’s short-term challenges with tight gross margins due to heavy investments in infrastructure and mergers and acquisitions.
Based on data from over 7,000 TipRanks analysts, Bolton ranks second. He was successful in valuing stocks 79% of the time. On average, he returned 82.5% on each.
As oil and gas prices continue to rise, the application of alternative energy sources is becoming more apparent. SolarEdge (SEDG) recently released quarterly results and is currently experiencing strong demand.
One of the strongest demands for SolarEdge photovoltaic panels is in Europe, which JPMorgan’s Mark Strouse says is “particularly strong as corporate-level clean energy targets, government initiatives and rising utility prices fossil fuels have stimulated demand”. (See SolarEdge Risk Analysis on TipRanks)
Strouse priced the stock long and declared a price target of $328.
The analyst said SolarEdge’s commercial and industrial segment will soon reach an inflection point and see a surge in demand. He also expects SEDG’s tight gross margins to increase once the company ramps up manufacturing in Mexico, which will significantly reduce transportation costs. This contrasts with the high costs incurred when shipping from Asia to the United States.
Meanwhile, in Asia, production at the company’s Vietnam factory rebounded after forced pandemic-induced shutdowns stifled progress.
Strouse said once the title expands its vertical capabilities and global reach, it could start to really outperform its solar peers.
Out of more than 7,000 expert analysts, Strouse ranks 399th. He was right to pick stocks 52% of the time and he returned an average of 40.3% on each one.