Wall Road analysts with stable monitor data like Netflix, these different shares nicely into February
A woman is reflected in a puddle as she passes a branch of Bank of America in New York's Times Square.
Brendan McDermid | Reuters
Democrats officially control the Presidency, Senate, and House of Representatives, but Wall Street appears largely unimpressed.
According to LPL Financial, the S&P 500 had its highest inauguration day return since 1985 when Ronald Reagan was sworn in for the second time. Additionally, the index is up 14% since November 3rd.
But can this dynamic be sustained? "Many investors fear that the stock market has rallied too far and too quickly and that there are signs of surplus in parts of the financial system. This is a reasonable problem given the rally in stocks since the bear market low in March. The past year has been remarkable" , Peter Oppenheimer, Goldman Sachs' Chief Global Equity Strategist, wrote in a recent note.
Given the uncertainty about whether or not the market can continue to surge forward, how are investors supposed to get compelling results? By reaching out to experts who are proven to be successful. TipRanks' analyst forecast service uses detailed market data to identify the top performing analysts on Wall Street. These are the analysts with the highest success rate and average return per rating.
Here are the analysts' best stock picks right now:
Bank of America
Following the release of Bank of America's fourth quarter earnings, Gerard Cassidy, an analyst at RBC Capital, noted that the company closed 2020 “well positioned to generate higher earnings in 2021”. In line with this optimistic outlook, the five-star analyst raised the price target from USD 28 to USD 37 and repeated a buy rating on January 19.
Looking at the print, BAC reported earnings per share of $ 0.59, which number factored in a net DVA loss of $ 56 million. In addition, net interest income was $ 10.37 billion, beating Cassidy's forecast by 1.6%. However, this was 16% less than in the same quarter of the previous year.
Regardless, Cassidy continues to view the long-term growth narrative as going strong. "The company's diversified business model is positioned to benefit from an economic recovery in the US from 2021 to 2022. In addition, a steep yield curve will provide tailwind for earnings growth over the next 12 to 18 months," said the analyst.
Additionally, Cassidy points to the leadership team as an important strength point for Bank of America. "Under the leadership of CEO Moynihan, BAC has been focused, for the past 10+ years, on outperforming peers on credit quality, balance sheet strength and profitability. We believe in 2023 when investors look back. The 2020- BAC will deliver these results in 2022, "he said.
In terms of valuation, Cassidy sees "the shares as an attractive long-term risk-return game compared to comparable companies, especially given the currently discounted multiples".
Based on its success rate of 79% and an average return of 28.7% per rating, Cassidy is among the top 20 analysts recorded by TipRanks.
For Monness top analyst Brian White, streaming giant Netflix remains an exciting game after winning. The company achieved "excellent" quarterly results and "strong" forecasts for the first quarter of 2021. To that end, White maintained a buy rating on the stock. To underpin his even more optimistic stance, the analyst raised the price target from $ 600 to $ 650.
Fourth quarter revenue was $ 6.644 billion, up 22% year over year and beating White's estimate of $ 6.571 billion. However, earnings per share fell short of analyst expectations thanks to an inoperative item of $ 258 million. Even so, operating income of $ 954.2 million exceeded its forecast of $ 887.1 million.
Most notable, however, was the total paid global streaming net additions of 8.5 million, which slightly exceeded White's 5.9 million call.
Looking ahead to the first quarter of 2021, management anticipated revenue of $ 7.129 billion (versus a consensus estimate of $ 7.021 billion), operating income of $ 1.780 billion, and earnings per share of $ 2.97 Dollars (compared to a Street estimate of $ 2.10 million).
Commenting on the performance, White commented: "In our view, Netflix continues to perform well on a major secular trend and is increasingly demonstrating the improvement in the economics of its mode." In addition, the company left the door open to potential buyback programs in the future.
It should be noted that "Netflix has not lost sight of the difficult year-over-year comparison for paid global net streaming additions in the first half of 2021 and the challenges that come with forecasting 2021," said White. "Competition will remain a talking point and that The pace of content production will be volatile. "
White ranks 32nd on the TipRanks list, with an 80% success rate and an average return of 33.6% per review.
On January 19, Gritstone Oncology unveiled its CORAL program to develop a second generation COVID-19 vaccine. The company teamed up with the La Jolla Institute, the Bill and Melinda Gates Foundation, and the National Institute of Allergy and Infectious Diseases (NIAID) to develop this vaccine.
H.C. Sean Lee, an analyst at Wainwright, tells his clients that this announcement confirms his optimistic thesis and that the analyst has therefore maintained a buy rating for the stock. It also gave the price target a boost, moving the number from $ 16 to $ 24.
Part of Lee's excitement has to do with the fact that the vaccine is in its second generation. Unlike first-generation vaccines that target only the COVID spike protein, CORAL uses the company's EDGE platform to identify a variety of new potential target epitopes "that could make the vaccine effective against the virus, even if it continues to mutate "opinion. The candidate also uses the same chimpanzee adenovirus primer plus self-replicating RNA as Gritstone's GRANITE and SLATE programs.
"In our view, the currently available COVID-19 vaccines are unlikely to fully meet the diverse requirements in all demographic and geographic regions. As new strains are reported around the world, there is a likelihood that available vaccines against a future strain will be ineffective So we believe CORAL has the potential to see a significant uptrend in the next 18 to 24 months, "stated Lee.
The CORAL vaccine is scheduled to enter a phase 1 study in the second quarter of 2021. The preliminary results are expected to be available in the middle of the year. If everything goes according to plan, Lee believes a phase 2/3 study could begin before the end of 2021, with the data release from that study reflecting an important potential catalyst.
Since Lee's calls averaged a whopping 117.9%, he ranks 143rd in TipRanks' ranking.
Following the release of Progress Software's fourth quarter 2020 results, Wedbush analyst Daniel Ives told investors that the above-average performance "speaks for a company that we believe will gain good growth momentum in fiscal 2021." As a result, the top analyst maintained a buy rating and increased its price target from $ 45 to $ 55 on January 15.
Progress reported GAAP earnings of 39 cents per share compared to a loss of 11 cents in the year-ago quarter. The number also beat the consensus estimate of 37 cents. In addition, sales were $ 122.4 million, an increase of 5%.
However, Ives highlights the takeover of Chef as the driving force behind his ongoing optimism. The analyst said: "We believe that the acquisition of Chef could be a potential game changer for Progress in the next few years, as the strategy and financial upward trend of this deal are impressive and are starting to be felt in this area." The acquisition of Chef looks like a well-executed deal, located in the PRGS wheelhouse, meeting the parameters of management for 10% -20% of PRGS sales and the potential to achieve 35% + operating margins (Chef is expected to 35% + operating margin will reach 1 year after closing). "
It should be noted that management has changed its strategy with the company focusing on accretive and aggressive M&A targeting companies that have "stable and profitable revenue streams with the goal of increasing sales and cash flow in 3-5 years to double ". To that end, Ives believes the acquisition of Chef will help Progress explore the development space.
In summary, Ives stated, "In short, we are optimistic about the prospects for progress over the next 12 to 18 months as Yogesh & Co. lead the company into the next growth and M&A success."
In support of its # 26 ranking, Ives has had a success rate of 78% and an average return of 36.6% per review.
Needham's Alex Henderson is an "aggressive buyer" of Lumentum's weakness in connection with the $ 5.7 billion acquisition of Coherent. Against this background, Henderson repeated a buy recommendation and a price target of USD 115 on January 20.
"We like the acquisition because it will scale LITE's fiber laser business, provide additional end-market diversification, and create vertical integration opportunities," Henderson wrote in a note to investors.
With further explanation, the analyst points out that although the two companies target different products and markets, "the underlying technologies, manufacturing and basic materials used are very similar". To this end, synergies of $ 150 million are expected over the next two years, with $ 100 million from COGS and $ 50 million from OPEX.
In addition, Henderson argues that Coherent could endorse Lumentum's valuation. "Prior to the announcement of the deal, Coherent was trading at an EV / E of 21.1x the CY21 consensus, while LITE was trading at 16.4x our estimate. Coherent has net debt of $ 1.75, while Lumentum is currently Has $ 5.95 net cash, "he explained.
In addition, according to Henderson, there should be no problems with approvals in China since both companies are "main suppliers in China".
Based on its 68% success rate and an average return of 31.2% per rating, Henderson is among the top 75 analysts tracked by TipRanks.