Top Wall Street analysts like Tesla and Caterpillar
Jim Umpleby, CEO of Caterpillar Inc.
Adam Jeffrey | CNBC
In these difficult times, making informed decisions with a long-term view is vital for investors.
Here are five stocks picked by top Wall Street analysts, according to TipRanks, a platform that ranks analysts based on their track record.
Semiconductor Company Advanced micro-systems’ (AMD) fourth-quarter results beat Street’s expectations, although continued weakness in the PC market led to lower revenue from the company’s customer segment. Nevertheless, the increase in sales of the data center and embedded divisions made it possible to compensate for the weakness of the customer and gaming segments.
Although AMD expects a roughly 10% decline in revenue in the first quarter of 2023, CEO Lisa Su remains optimistic about the company’s ability to gain market share this year.
Susquehanna analyst Christopher Rolland said the company’s customer and gaming results were better than expected. However, he noted that management’s weaker data center outlook for the first half came as a “surprise.”
“While sales to North American hyperscalers more than doubled in 2022, management believes cloud is now undergoing a 1H digestion period, returning to 2H growth (we believe helped by ramps in Genoa, Bergamo, MI300 and Pensando, all of which are on track),” Rolland explained of the direction of the data center segment.(See AMD Blogger Opinions & Sentiment on TipRanks)
Overall, Rolland reiterated a buy rating for AMD with a price target of $88, saying he’d rather look past the uncertainty in 2023 “towards a better 2024.” Rolland’s conviction is trustworthy, given that he is ranked 13e position among more than 8,300 analysts tracked by TipRanks. Additionally, 72% of its ratings were profitable, each generating an average return of 21%.
First manufacturer of electric vehicles from Tesla (TSLA) upbeat fourth-quarter results erased investor worries about supply chain disruptions, distraction from Elon Musk’s Twitter acquisition and recently announced price cuts.
Tesla is focused on cutting costs and improving productivity to combat near-term macroeconomic pressures and growing competition. Given potential supply chain issues and other possible headwinds, the company has released a production forecast of 1.8 million electric vehicles in 2023, although it has the potential to manufacture 2 million. units.
Mizuho Securities analyst Vijay Rakesh expects Tesla’s revenue to grow 29% this year and 26% in 2024. The analyst pointed out that his conservative growth estimates reflect “a potential slowdown in macroeconomic demand offset by the secular transition trends of electric vehicles”.
Rakesh reaffirmed a buy rating and price target of $250, pointing out that Tesla has industry-leading margins and is on track to generate more than $10 billion in free cash flow, compared to rivals. who still have negative free cash flow. (See Tesla hedge fund trading activity on TipRanks)
Rakesh holds 113e position among more than 8,000 analysts followed on TipRanks. Moreover, 60% of its ratings were successful and generated an average return of 17.4%.
After fast electric vehicles, the fast food giant McDonald’s (MCD) is next on our list. McDonald’s exceeded expectations as the restaurant chain saw better-than-expected traffic to its national stores in the last quarter of 2022.
McDonald’s recorded strong comparable sales in both domestic and international markets, thanks to “strategic menu price increases” in the United States, attractive menu offerings and marketing campaigns such as the Happy Meal offer for adults. (See McDonald’s dividend date and history on TipRanks)
Despite difficult macroeconomic conditions, McDonald’s intends to expand further to capture additional business. It plans to open approximately 1,900 restaurants, including more than 400 in the United States and international operated market segments. The remaining restaurants will be operated by developing licensees and affiliates.
BTIG analyst Peter Saleh, who reiterated a Buy rating and price target of $280, expects McDonald’s to benefit from “moderate inflation, carryover prices, ‘easing of lockdowns in China and foreign exchange finally becoming a modest tailwind’.
Saleh ranks 383 out of more than 8,300 analysts on TipRanks, with a success rate of 65%. Each of its notes delivered an average return of 12.3%.
Mondelez International (MDLZ) recent results reflect the benefits of being a maker of resilient product categories like chocolate, cookies and baked snacks. The Oreo brand owner reported robust revenue growth, fueled by higher prices, increased volumes and strategic acquisitions including Chipita and Clif Bar.
Despite currency headwinds and rising costs, Mondelez is confident of generating “attractive growth” in 2023 and beyond by increasing exposure to high-growth categories, cost discipline and continued brand investment iconic. (See the MDLZ stock chart on TipRanks)
JPMorgan analyst Kenneth Goldman, who ranks 652 out of more than 8,300 analysts tracked by TipRanks, says it’s “refreshing to see at least one company surprise on the upside” on the volume front amid growing concerns regarding this key metric in the commodity industry.
Given the likelihood of several food producers reporting low volumes in the coming days, Goldman said it may “become increasingly important to hold stocks of companies with (a) relatively inelastic categories, (b ) strong, unique brands with limited private label competition, and (c) a commitment to continually spend on their brands.”
Consistent with its bullish stance, Goldman reiterated a buy rating and raised its price target to $74 from $71. It should be noted that 61% of his ratings were successful, generating an average return of 9.3%.
Manufacturer of construction and mining equipment caterpillar (CAT) ended 2022 with a double-digit increase in revenue in the fourth quarter, driven by stable demand and higher prices. However, investors appeared concerned about the impact of rising input costs and a stronger US dollar on the company’s bottom line.
Additionally, Caterpillar’s warning of weaker Chinese demand in 2023 has not gone down well with shareholders. Nonetheless, the company is bullish on overall sales and earnings growth this year due to healthy demand in its segments.
Jefferies analyst Stephen Volkmann reaffirmed a Buy rating after the fourth quarter print and maintained a price target of $285. Volkmann called the company’s pricing strength “most positive.”
The analyst also noted that demand for Caterpillar’s products remains strong, as indicated by a $400 million increase in order backlog in the fourth quarter on a sequential basis. (See Caterpillar insider trading activity on TipRanks)
Volkmann’s recommendations are worth considering, given that he is located at 51st position on more than 8,300 analysts tracked by TipRanks. Remarkably, 69% of Volkmann’s ratings generated profits, with each rating earning an average return of 19.9%.