Top analysts say buy stocks like McDonald’s and Tesla

The McDonald’s logo appears on a restaurant in Arlington, Virginia, January 27, 2022.

Joshua Roberts | Reuters

Inflation, rising oil and other commodity prices, and geopolitical turmoil seem to affect nearly every industry.

Now, the advent of earnings season brings another item for investors to consider.

Instead of focusing on the short-term fluctuations that these events may create, investors should maintain a long-term perspective. Top Wall Street professionals are highlighting their favorite stocks in these trying times, according to TipRanks, which tracks top performing analysts.

Here are five stocks that caught the eye of analysts.

Blantyre

As countries weigh military spending, there may be more investment in big data companies like Palantir (PLTR). The software analytics company includes two divisions, government and commercial, and produces unique solutions for its clients.

While its growth has been slower than that of its peers, Palantir remains profitable and continues to produce next-generation innovations, taking a “less-followed path” than typical big tech names. At least, that aligns with Brian White’s recent report on Monness, Crespi, and Hardt & Co. (See Palantir’s risk analysis on TipRanks)

White began covering the stock by buying, and set a target price of $20.

He noted that Palantir “has remained true to its core values, fosters a distinct culture, and develops unique software.”

The story of digital transformation is not new, however White believes that many entities are still in their early stages of properly adopting cloud data analytics and big data as their top priorities.

White writes that PLTR has “strong revenue growth, a leading position in the emerging software category, software development that disrupts existing legacy solutions…and significant market opportunity.”

On TipRanks, White holds his place at #178 out of nearly 8,000 analysts. His stock picks are a success 64% of the time, and he’s returned an average of 29.1% each.

McDonald’s

McDonald’s digital innovations (MCD) Make drive-thru operations more efficient, streamline delivery capabilities, and boost brand loyalty through its rewards program. The multinational restaurant is well positioned to continue delivering returns to shareholders.

“MCD’s growth initiatives, including AI-driven voice demand, digital marketing, new delivery partnerships, supply chain management, and continuous innovation, will continue to drive long-term business trends and market share gains,” noted Evan Fences of Tigress Financial Partners.

Feinseth classified the stock as a buy, and announced a price target of $314 per share.

McDonald’s recent partnership with IBM (IBM) is expected to integrate AI technology into the direct payment sector, significantly improving customer experience and allowing for higher demand rates. For the McDonald’s app, the enhanced loyalty program allows customers to be awarded points for their purchases, thus realized in repeat visits.

The fast-food company reported strong quarterly results in January, printing its highest-ever full-year US sales, driven by “an excellent performance by McRib combined with strong demand for its crispy chicken sandwich,” according to Feinseth.

The analyst expects McDonald’s to continue offering dividends and share buybacks. (See McDonald’s Corp. dividend data.)

Out of more than 8,000 financial analysts, Feinseth is rated No. 75. It has a 66% success rate, along with an average return of 29.5% on each pick.

Tesla

Tesla (TSLA) recently opened its factory in Austin. The plant has been a long time coming for many investors and is expected by CEO Elon Musk to become the primary production site for his various vehicles, including the much-anticipated Cybertruck.

Domestically, the company is light years ahead of its competitor, which has found it somewhat difficult to scale up and run its operations smoothly, according to Dan Ives of Wedbush Securities. The Austin and Berlin factories are also expected to lead Tesla to produce two million cars by the end of this year. For context, that’s 100% more than the electric vehicle manufacturer did in 2021. Austin will account for a quarter of that amount.

Ives reiterated the stock’s buy rating, maintaining its $1,400 target price.

Describing it as a “high-order problem of oversupply,” Ives said orders for Tesla Model Ys backlogged about half a year. While this is something that provides the company with a clear view of its upcoming revenue, it is unable to capitalize properly if it cannot fulfill orders. Moreover, consumers will go elsewhere if they cannot get their new cars. (See Tesla’s directions on TipRanks)

Finally, the Berlin plant aims to receive all European deliveries, which the Shanghai plant was producing until recently. This system of worldwide vehicle shipping was unsustainable at best and is expected to end with the rise of Berlin.

Ives is ranked 332th out of nearly 8,000 professional analysts. He’s right on the stock pick 59% of the time, and he’s returned an average of 23.2% on each rating.

CrowdStrike

CrowdStrike (CRWD) in the cybersecurity industry, where the company is doing well on its pipeline and building strong levels of customer retention.

Baird’s Jonathan Roekhaffer recently reported on the stock, saying: “Cloud-native architecture, single intelligent agent, real-time cloud AI, integrated platform, and scalability. [are] Major innovations creating a moat and strong competitive entry barriers. ”

Ruykhaver classified the stock as a buy and raised its price target to $275 from $225.

Noting that CrowdStrike “has no shortage of growth opportunities,” the analyst cited the cybersecurity firm’s implementation in relation to its consumer product units. He noted that CRWD has increased the massive amount of units by more than 100% since it was released to the public.

This wide range of offerings provides a stable ecosystem for its customers, which is an utmost quality in such a competitive market. (See CrowdStrike hedge fund activity on TipRanks)

Ruykhaver determined that “FalconXDR, Cloud Solutions, Fusion and Records Management” drove growth and led CrowdStrike to a competitive position among its peers.

Out of nearly 8,000 analysts, Ruykhaver ranks eighth. It has successfully rated the stock 81% of the time, and holds an average rate of return of 57.1%.

rubbery

elastic (CHWY) The pandemic caught tailwind as people adopted pets and turned to the online retailer for supplies.

However, the epidemic and its trends have largely faded over the past few months, and thus Chewy’s assessment took a hit. JPMorgan’s Doug Anmuth doesn’t think the stock’s underlying business is any less attractive, though. In its report, the analyst believes it is “the largest pet retailer in the United States,” in a “growing and highly attractive category early in the online transformation.”

Anmuth has rated the stock as a buy and a target price of $55.

He anticipates growth for the company in the pharmacy segment, and opportunities to expand internationally. The analyst expects active customer growth to increase through the end of the year and into 2023. Until then, he expects revenue growth of 16% for the current fiscal year. (See Chewy stock charts at TipRanks)

Despite these optimistic factors, near-term challenges continue to grow 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 an increase in new initiatives including fresh and processed foods, health and wellness including insurance, and advertising, which should begin further in 2023,” he noted. Anmouth.

Anmuth is ranked 273 out of nearly 8000 expert analysts in the TipRanks database. It has a 54% success rate, and returns an average of 26.6% on its ratings.

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