It seems inflation, the spike in oil prices and other commodities and geopolitical unrest are affecting just about every industry.
Now, the arrival of earnings season brings another element for investors to consider.
Rather than focusing on the short-term volatility these events may create, investors ought to keep a long-term perspective. Wall Street’s top pros are highlighting their favorite stocks for these rocky times, according to TipRanks, which tracks the best-performing analysts.
Here are five stocks that have caught analysts’ attention.
As nations weigh military spending, there could be more investment into big data companies like Palantir (PLTR). The software analytics firm has two segments, government and commercial, and produces unique solutions for its customers.
While its growth has been slower than its peers, Palantir remains profitable and has been continuing to generate next-gen innovations, taking a “path less followed” compared to the typical Big Tech names. At least, this is in accordance with Brian White’s recent report for Monness, Crespi, Hardt & Co.
White initiated coverage on the stock with a buy, and he assigned a price target of $20.
The noted that Palantir has “remained steadfast to its core values, fostering a distinct culture, and developing unique software.”
The digital transformation story is not a new one, yet White believes many entities are still in their early stages of properly adopting cloud and big data analytics as their top priorities.
White wrote that PLTR has “strong revenue growth, a pioneer status in an emerging software category, the development of software that disrupts existing legacy solutions… and a large market opportunity.”
On TipRanks, White maintains a spot at No. 178 out of nearly 8,000 analysts. His stock picks have found success 64% of the time, and he has returned an average of 29.1% on each.
Digital innovations have helped McDonald’s (MCD) make drive-thru processes more efficient, streamline delivery capabilities, and drive brand loyalty through its rewards program. The multinational restaurant is well poised to continue providing returns to shareholders.
Ivan Feinseth of Tigress Financial Partners noted that “MCD’s growth initiatives, including AI-based voice ordering, digital marketing, new delivery partnerships, supply chain management, and ongoing innovation, will continue to drive long-term business trends and market share gains.”
Feinseth rated the stock a buy, and he declared a price target of $314 per share.
McDonald’s recent partnership with IBM (IBM) is expected to integrate AI tech into its drive-thru segment, significantly improving customer experience and allowing for increased ordering rates. As for its McDonald’s App, the enhanced loyalty program allows points to be awarded to customers for their purchases, thus materializing in repeat visits.
The fast-food corporation reported strong quarterly results in January, printing its highest ever full-year U.S. comparable store sales, driven by a “stellar performance by the McRib along with strong demand for its crispy chicken sandwich,” according to Feinseth.
The analyst anticipates McDonald’s will continue providing dividends and repurchasing shares. (See McDonald’s Corp. Dividend Data on TipRanks)
Out of more than 8,000 financial analysts, Feinseth is rated as No. 75. He holds a 66% success rate, coupled with an average return of 29.5% on each pick.
Tesla (TSLA) recently kicked off the opening of its Austin factory. The plant has been a long-time coming for many investors, and it’s expected by CEO Elon Musk to become the flagship production site of its various vehicles, including the much-anticipated Cybertruck.
Domestically, the company is lightyears ahead of its competition, which has been finding it rather difficult to get its operations up and running smoothly, according to Dan Ives of Wedbush Securities. He also expects the Austin and Berlin factories to drive Tesla to produce 2 million vehicles by the end of this year. For context, that’s 100% more than the EV maker did in 2021. Austin will represent one-quarter of this amount.
Ives reiterated his buy rating on the stock, and he maintained his $1,400 price target.
Describing it as a “high-class problem of demand outstripping supply,” Ives said that orders for Tesla Model Ys are backlogged by about half a year. While this is something that provides the company with clear visibility of its upcoming revenue, it is not able to capitalize properly if it cannot fill the orders. Further, consumers will go elsewhere if they cannot get their new cars.
Finally, the Berlin plant is meant to pick up all of the European deliveries, which until recently the Shanghai factory had been producing. This system of shipping vehicles around the globe was unsustainable at best and is anticipated to wind down as Berlin ramps up.
Ives is rated No. 332 out of almost 8,000 professional analysts. He is correct when picking stocks 59% of the time, and he has returned an average of 23.2% on each rating.
Jonathan Ruykhaver of Baird recently reported on the stock, saying that “cloud-native architecture, single intelligent agent, real-time cloud-scale AI, integrated platform, and scalability [are] key innovations that create strong competitive moat and barriers to entry.”
Ruykhaver rated the stock a buy and bullishly 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 its product modules made available to consumers. He noted that CRWD has increased its sheer amount of modules by over 100% since it went public.
This wide range of offerings provides a sticky ecosystem for its customers, a paramount quality in such a competitive market.
Ruykhaver specified that “FalconXDR, Cloud Solutions, Fusion, and log management” have driven growth and led CrowdStrike to a competitive position among its peers.
Out of nearly 8,000 analysts, Ruykhaver ranks as No. 8. He has been successful when rating stocks 81% of the time, and he holds an average return rate of 57.1%.
However, the pandemic and its trends have largely died down over the last few months, and Chewy’s valuation consequently took a hit. Despite this, Doug Anmuth of JPMorgan does not believe the stock’s core business is any less attractive. In his report, the analyst believes it to be the “largest pure-play pet retailer in the U.S.,” in a “growing and highly attractive category that is early in the shift online.”
Anmuth rated the stock a buy and offered a price target of $55.
He foresees growth for the company in its pharmacy segment and has room for expansion internationally. Active customer growth is anticipated by the analyst to ramp up through the end of the year and into 2023. Until then, he projects 16% revenue growth for the current fiscal year.
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 to have its products unavailable, especially when its customers could shop elsewhere.
Gross margins are nonetheless expected to expand, “well beyond the 25-28% range w/lift from new initiatives including fresh & prepared food, health & wellness including insurance, & advertising, which should kick in more in 2023,” Anmuth noted.
Anmuth is ranked as No. 273 out of almost 8,000 expert analysts in TipRanks’ database. He has a success rate of 54%, and he returns an average of 26.6% on his ratings.