Apple CEO Tim Cook introduces the new iPhone 14 during an Apple event at its headquarters in Cupertino, California, United States, September 7, 2022.
carlos barria | Reuters
The market outlook is becoming increasingly uncertain, given excessive inflation and a slowing economy.
The shares ended Friday with losses. They were ultimately unable to rebound after a selloff on Tuesday in which the Dow Jones Industrial Average lost more than 1,200 points.
Against this backdrop, investors need to look beyond the current turmoil when choosing their investments. To that end, here are five stocks picked by top Wall Street pros, according to TipRanks, a platform that ranks analysts based on their track record.
Apple (AAPL) needs no introduction. The iPhone maker has beaten all odds and is raging with compelling product launches. On September 7, the company held its big fall event, where it launched its highly anticipated iPhone 14 series, along with Apple Watches and AirPods.
Following the event, Monness Crespi Hardt analyst Brian White said the product introductions enhanced “a portfolio that’s never been stronger and a more ubiquitous platform.” (See Apple’s hedge fund trading activity on TipRanks)
White was cautious that the treacherous macro environment could make consumers reluctant to indulge in buying a new smartphone. However, he was encouraged that the company did not increase the prices of iPhone 14 smartphones.
White notes that Apple’s current price-to-earnings ratio is above its average in recent years. However, looking at the long-term business model, the analyst was optimistic that Apple’s strong services business has created a solid foundation of consumer confidence.
The analyst, who is at 470e position among nearly 8,000 analysts tracked on TipRanks, assigned a buy rating on AAPL stock, with a price target of $174.
White has a track record of 57% success on his ratings, with each rating generating average returns of 11%.
Growing demand for natural gas as an energy source is driving the growth of EQT Corporation (EQT). Needless to say, soaring oil and gas prices this year have also thrown EQT into a rat race.
The company recently reached an agreement to acquire shale producer Tug Hill. Following the news, RBC Capital Markets analyst Scott Hanold reiterated a buy rating on EQT stock, with a target price increase of $2 to $57. “Management’s recent comments during its 2Q22 conference call emphasized that acquisitions need to be more compelling than buying back one’s own shares and also additive to asset quality, including reducing the company’s break-even point. and we think this deal checks those boxes,” Hanold said. , explaining his optimism. (See opinions and sentiments of EQT bloggers on TipRanks)
According to the analyst’s calculations, the Tug Hill acquisition can boost EQT’s free cash flow to $6 billion in 2023, and also boost earnings per share by 10-15%. The extra FCF can be used for higher stock buyback authorization, but Hanold thinks the company is more likely to use it to reduce debt.
“We believe EQT shares should outperform their peers over the next 12 months. EQT is well positioned with a large asset base concentrated in the Appalachian Basin,” said Hanold, who is ranked No. 14 among nearly 8,000 analysts tracked on TipRanks.
A total of 66% of Hanold’s ratings managed to generate 30.9% return on average.
Another player in oil and natural gas exploration and production, Devon Energy (NDV), is among the favorite picks of top market analysts. The favorable geographical location of the company is the engine of most of its activity. The rich Delaware, Eagle Ford, Anadarko, Powder River and Williston basins are Devon Energy’s primary areas of operation.
Earlier this month, the company entered into a liquefied natural gas (LNG) partnership with Delfin Midstream. The deal involves an agreement between the two parties for long-term liquefaction capacity (1 million tonnes per year) in Delfin’s first floating LNG carrier, with the possibility of adding an additional 1Mtpa in the first project or in future ones. ships.
Following the announcement, Mizuho Securities analyst Vincent Lovaglio appeared optimistic about the prospects for the deal, reiterating a buy rating on the company with a price target of $91. The analyst believes that “downstream liquefaction investment can connect otherwise price-disadvantaged Permian natural gas to high-end global markets, today using excess cash on hand to convert a molecule once considered as a potential liability into an asset”. (See Devon Energy’s dividend date and history on TipRanks)
In addition, the transaction could increase Devon’s annual dividend by approximately 30%. Lovaglio is ranked #1 among nearly 8,000 analysts on TipRanks. Notably, 91% of its ratings were successful, with each rating giving average returns of 46.2%.
Semiconductor component manufacturer Broadcom (AVGO) has recently focused on integrating high-margin software into its product portfolio using organic efforts as well as strategic acquisitions. As a result, Broadcom’s $61 billion purchase of virtualization software company VMware has caught the attention of several analysts.
Mizuho analyst Vijay Rakesh was one of those bullish on the acquisition. “With VMware, we believe AVGO could follow a strategy similar to that of Symantec-CA, in which it retained key assets and divested certain markets with low volume of contacts,” he said, noting the company’s focus on higher margin growth. (See Broadcom Stock Investors on TipRanks)
The analyst believes that the acquisition will significantly increase Broadcom’s earnings per share. The analyst believes the company’s shares can reach a price of $793 and reiterated a buy rating on the stock.
Broadcom’s strong market position in several areas, its operating leverage and its focus on acquisitions that increase its margins make Rakesh believe in its potential to create value.
Ranked #128 among roughly 8,000 analysts on TipRanks, Rakesh was successful with 57% of his ratings. In addition, each of its ratings generated an average return of 20.2%.
Another of Vijay Rakesh’s top picks for this season is semiconductor giant Nvidia (NVDA). The company has recently been in the limelight for reporting third-quarter revenue of $400 million due to U.S. restrictions on sales of high-performance AI chips in China.
After speaking to senior Nvidia officials, Rakesh turned bullish on Nvidia again, reiterating a buy rating on the stock with a price target of $225. Rakesh was optimistic about the company’s high-end Hopper architecture, which is on track despite the ban. This is because most of the development team is in the US (see Nvidia stock chart, price history and charts on TipRanks)
“We believe the Hopper Ramp will not be affected by the export ban with the updated 8-K enabling supply chain freedom across Hong Kong and China,” said Rakesh, who believes that this loophole is an important respite for the company.
Additionally, over 90% of all AI workloads in the data center world are supported by Nvidia. AI is likely to provide the company with a key secular growth opportunity that is resilient to macroeconomic risks.