Retail analysts on their top stock picks for 2021
Leading Wall Street analysts named promising stocks amid growing market rally
A correction may be on the horizon for stocks, strategists at Bank of America say, but that’s not necessarily a bad thing..
«We expect a correction of 5–10% in the first quarter as large «unknown» coincide with abundant positioning, record capital and earnings revision «as good as possible»», – said a team of strategists from Bank of America (BofA).
Meanwhile, Dash Peramunetilique (Desh Peramunetilleke) of Jefferies shares this view, writing in a recent research note that while stocks are not subject to «prolonged deployment», investors should take advantage of any weakness of theirs if the market does indeed reverse.
Paying close attention to the activities of analysts who consistently get things right. TipRanks analyst prediction service tries to identify the best Wall Street analysts or professionals with the highest success rates and average returns.
Here is a list of the best stocks of the most performing analysts at the moment:
Networking solutions provider Cisco Systems fell slightly after the company released its 2Q2021 financials. However, the analyst’s optimistic thesis Ittaya Kidron (Ittai Kidron) Oppenheimer remains unchanged. In this regard, the five-star analyst confirmed his recommendation «Buy» and a target price of $ 50.
Calling Wall Street expectations «muted», Kidron tells investors there are more positives than negatives in the media. First of all, the security segment grew 9.9% year-over-year, with the cloud security business showing double-digit growth. In addition, ordering trends improved from the previous quarter across all regions and customer segments, indicating a gradual reduction in negative factors due to COVID-19..
At the same time, Cisco’s revenue forecast for the third quarter of fiscal year 2021 fell short of expectations due to supply chain problems, unimportant cloud computing revenues and negative corporate orders. Despite these obstacles, Kidron is optimistic about the prospects for long-term growth..
«While the angle of recovery is difficult to pinpoint, we remain positive, seeing the headwind as temporary and considering Cisco’s software / subscription development, strong BS, robust capital allocation program, cost-cutting initiatives, and strong valuation.», – commented Kidron.
The analyst added: «We will take advantage of any pullbacks to increase positions».
With a success rate of 78% and an average return of 44.7%, Kidron is ranked 17th among the most effective analysts on TipRanks.
Distinguishing Lyft as a leader in its field, Wells Fargo analyst Brian Fitzgerald (Brian Fitzgerald) states that «growth mindset is constructive». In line with his optimistic stance, the analyst raised the target price from $ 56 to $ 70 and reiterated his recommendation. «Buy».
Fitzgerald believes that since the car sharing company’s Q4 2020 P&L, the narrative is based on the idea that stocks «easy to own». According to the analyst, if we consider a team of managers who are themselves shareholders, they «owner-friendly with close attention to shareholder value creation, free cash flow / share and cost discipline».
Notably, profitability may come out in the third quarter of 2021, a quarter earlier than previously expected.
The analyst added: «For these reasons, we expect LYFT to appeal to both fundamentals and momentum investors, and Q4 2020 results will be a catalyst for equities.».
At the same time, Fitzgerald has some concerns about the future of the company. Referring to the passion of the company Lyft «B2B delivery», he sees in this a potential «abstraction» and «poor timing given falling demand as the economy recovers». Moreover, the analyst considers an investment of 10–$ 20 million in new driver acquisitions to meet growing demand for both «small minus».
For Fitzgerald, however, the positives outweigh the disadvantages..
Because Fitzgerald has an 83% success rate and an average return of 46.5%, the analyst is ranked 6th most effective analyst.
According to a leading analyst at Roth Capital Darren Aftahi (Darren Aftahi), Carparts.com – Top Pick for 2021. So he kept the rating «Buy» for the shares of this company, and also raised the target price from $ 18 to $ 25.
The auto parts and accessories retailer recently announced that its Grand Prairie, Texas distribution center, which opened in the fourth quarter, has shipped over 100,000 components. At the beginning of November, the shipment of products amounted to approximately 10,000.
According to Aftahi, the company’s production capacity has increased by about 30%, while there is an increase in the recruitment of employees to meet demand., «which bodes well for fiscal 2021 results». What’s more, management said the DC will be used for traditional gas-powered car parts, as well as supplying hybrid and electric vehicles. This is important because this area could be a new category of growth..
Taking into account all this and the fact that Carparts.com is trading at a significant discount compared to peers, makes the analyst even more positive about the company..
Achieving a whopping average return of 69.9%, Aftahi is ranked 32nd out of over 7,000 analysts tracked by TipRanks.
Stifel Analyst Scott DeWitt (Scott Devitt) has confirmed his "bullish" recommendation for eBay stock. In response to Q4 earnings and Q1 outlook, the five-star analyst not only reaffirmed his recommendation «Buy», but also raised the target price from $ 70 to $ 80.
Looking at print details, FX-adjusted gross sales rose 18% year-over-year to $ 26.6 billion, beating the analyst’s $ 25 billion forecast. Total revenue was $ 2.87 billion, 28% more than DeWitt’s forecast of $ 2.72 billion. These strong performances were the result of measures to integrate payments and advertisements. In addition, the e-commerce giant added 2 million shoppers in the fourth quarter, bringing the total to 185 million..
In the first quarter, management forecasted 20% sales growth and 35% revenue growth.–37% versus 19% consensus. What’s more, non-GAAP earnings per share are expected to be between $ 1.03 and $ 1.08, easily surpassing DeWitt’s previous forecast of $ 0.80.
All of this prompted DeWitt to state: «In our view, improvements in the core market business focused on improving the buyer / seller experience and developing new verticals are undervalued by the market as investors continue to be cautious about difficult trade-offs starting in the second quarter.».
What else works for eBay? DeWitt highlights the fact that the company has a history of shareholder-friendly capital allocation.
DeWitt is more than 42 in the analyst rankings with 74% success and an average return of 38.1%.
Fidelity National Information Services (FIS)
Fidelity National Information serves the financial services industry by offering technology solutions, processing services, and information services. Insofar as Daniel Perlin (Daniel Perlin) of RBC Capital sees a possible economic recovery in the second half of 2021, he sticks to his rating «Buy» and a target price of $ 168.
After the company released its fourth-quarter numbers, Perlin told clients that the results, along with her forward-looking recommendations, highlighted «the short-term pressure that is being felt due to the pandemic, especially given that the FIS has a lower profitability … in the current situation». However, he argues that this trend will reverse for the better as the economy reopens in the future..
In addition, management noted that the order book grew 8% organically and generated new sales of $ 3.5 billion in 2020.. «We believe the combination of transforming the banking sector’s outstanding earnings, the strength of the conveyor belt, and the ability to drive product innovation points the way for the banking sector to accelerate growth in 2021.», – said Perlin.
Among the top 50 analysts on the TipRanks list, Perlin achieved 80% success and 31.9% average return.