Earnings season is upon us once again, with prominent names reporting this week. Volatility remains a focus for investors and inflation has continued to add pressure across industries. Short-term uncertainty remains a blur, though long-term investments can often cut through the daily noise.
Let’s take a look at five stocks that analysts expect will do well going forward.
Rising inflation does not hurt everyone equally, with those in lower socioeconomic strata and younger people feeling the full brunt of the impact. When a business is in e-commerce, it helps to have cheaper options on offer. For eBay (EBAY), this comes in the form of refurbished and used product categories, an area the company expects to expand.
Robert W. Baird’s Colin Sebastian recently reported on the online marketplace and auction site, noting that when it comes to inflation, “eBay’s unique offering of used and valuable goods should mitigate those headwinds or even benefit the platform”. He further explained that Gen Z consumers are very interested in this segment, with 80% of them buying the goods according to a company survey.
Sebastian gave the stock a Buy rating and added a price target of $80 per share.
The senior analyst went on to say that “the platform’s value-for-price orientation could help offset purchasing reluctance among low- and middle-income consumers.”
In the near term, the analyst expects EBAY to make multiple announcements such as a digital wallet and an increased focus on selling auto parts. (See Ebay website visits on TipRanks.)
When reporting quarterly earnings, e-commerce companies have struggled to beat pandemic-era comparisons as slowing consumer trends mix with supply-side constraints and an inflationary environment. Ebay expects Sebastian to meet its guidance on May 4th, although a hit and a raise would be very optimistic given these challenges.
Out of almost 8,000 analysts on TipRanks, Sebastian is ranked 158th. His success rate is 52% and he generates an average return of 37.1% per review.
The technology sector has been one of the hardest hit sectors of late, as many of its big companies were still considered risky and overvalued when the economy took a turn. Google parent company Alphabet (Google) was largely protected from the damage, in part because its ad segment was largely protected from Apple’s (AAPL) iOS 14.5 privacy update last summer.
Now, having weathered the storm, Monness’s Brian White said he expects the stock to be stable and solid and heads into the earnings call on Tuesday. In his most recent report, he noted that GOOGL outperformed the average stock in its coverage, stating that “we believe Alphabet will continue to capitalize on the secular digital advertising trend and see the strength in the cloud.”
White gave the stock a Buy rating and added a price target of $3,850 per share.
He’s also excited for Alphabet’s investor conference in mid-May, which could provide some encouraging investor sentiment for the tech giant.
So far, White explained that platforms like Google search and YouTube advertising have driven growth, largely undisturbed by Apple’s software changes. Businesses like meta platforms (FB) and Snap (SNAP), but have much to fear. (See Alphabet Stock Charts on TipRanks)
On the legislative front, the very precise analyst admitted that Alphabet will most likely face more antitrust lawsuits in the U.S. and is currently struggling with some disruption from the recently passed European Digital Markets Act (DMA).
On TipRanks, White is ranked 171st by nearly 8,000 analysts. He was correct on 65% of his stock picks and averaged a 29.7% return on each of them.
If you just pull up any travel search engine, you can see that the global demand recovery is back in full swing. Prices have skyrocketed across the board as pent-up consumers finally want to take a summer vacation, see family, or just experience something new for a change. After being derailed by the Delta variant last summer, this one seems set in stone. Reinforced by domestic mask requirements, Booking Holdings (BKNG) a strong Q2 is imminent.
Tigress Financial’s Ivan Feinseth identified these benefits in his recent publication, noting that the travel search engine conglomerate will benefit as it already sees high growth in its hotels, flights and rental car segments.
Feinseth gave the stock a Buy rating and bullishly raised its price target to $3,210 from $3,150.
Alongside the apparent resurgence of business trips and excursions for both business and leisure travelers, the five-star analyst noted that “BKNG continues to benefit from advertising, merchants and other businesses, which are also seeing strong growth.”
Booking is expected to announce its first-quarter results on May 4.
The company has also made several encouraging acquisitions that have strengthened its vertically integrated ecosystem. Companies like Getaroom, FareHarbor, and Etraveli are expected to deliver a robust consumer experience.
Feinseth wrote that “BKNG’s market-leading position, bolstered by its strong brand equity and diversified global footprint, coupled with its solid execution capability, technologically advanced platform and value realization from its complementary acquisition strategy” is expected to continue to deliver profits.
Feinseth is ranked 65th out of TipRanks’ nearly 8,000 analysts. He was successful in evaluating stocks 68% of the time and achieved an average return of 30.1%.
The world of fast fashion has grown massively in recent years, but the industry’s manufacturing methods are still a thing of the past. Environmental concerns remain paramount for big industry players, and smaller companies wouldn’t mind cutting costs either. Added to this is Kornit Digital (KRNT), an Israeli digital printing systems company currently disrupting supply chains.
While shares have fallen significantly year-to-date at last glance, some analysts see a newly priced growth opportunity.
One such optimistic voice in the crowd is Needham & Co.’s James Ricchiuti, who wrote that Kornit’s “business remains healthy” and he forecasts “strong tailwinds” over the next year and a half. Supported by its direct-to-garment and direct-to-fabric waterless printing systems, KRNT’s business model is poised to continue to capture market share in its industry.
Ricchiuti reiterated his buy rating on the stock and lowered his price target to $155 from $202. The downgrade in price target is due to a general decline in growth and technology stocks across the stock market. (See Kornit Digital’s Risk Factors on TipRanks)
Kornit has won both large and smaller customers and is seeing a strong momentum from customers looking to value sustainability. The five-star analyst wrote: “Leading apparel retailers have in recent weeks highlighted the need to offload supply chains through nearshoring and onshoring strategies, while at the same time large e-commerce apparel companies have stressed the importance of adopting advanced digital manufacturing operations to meet near-term and deliver custom orders faster.”
Ricchiuti holds position #144 out of almost 8,000 expert analysts. He got his stock picks right 62% of the time, earning an average return of 27.8% on each of them.
Along with the other tech, e-commerce and pandemic-driven stocks, Carvana (CVNA) has fallen significantly in recent quarters. Shares are over 77% off their August 2021 highs, and now macro headwinds have held the business model back. The big e-commerce used-car dealer has seen its volumes impacted, and thus its margins, although management said the path to a recovery is clear.
Stifel Nicolaus’ Scott Devitt also agrees, noting that Carvana has taken steps to “normalize service levels, reduce delivery times and improve stock levels.” If the right steps are to be taken, the current challenges the company is facing could be short-lived.
Devitt rated the stock as a Buy and modestly lowered his price target to $140 from $170.
The senior analyst argued that the current narrative surrounding the company and its concomitant downtrend in share price has been exaggerated and that its shares are now at a significant discount. (See Carvana Website Visits on TipRanks).
In his report, he wrote that “operational improvements should result in sequential growth in unit count, revenue and GPU [gross profit per unit]’ although the overall market slowdown is clouding near-term visibility.
Devitt backed up his hypothesis on the stock, noting that Carvana is the “leading e-commerce platform and is well-positioned with the infrastructure, technology, and expertise needed to run a nationwide network.”
Out of nearly 8,000 professional analysts, Devitt is ranked 538th. He has a 49% success rate and an average return of 19.7%.
https://www.cnbc.com/2022/04/24/top-wall-street-analysts-say-buy-alphabet-and-carvana.html Leading Wall Street analysts recommend buying Alphabet and Carvana