Chinese electric vehicle startup Nio Inc’s first employee Tianshu LI and the company’s management team celebrate at the New York Stock Exchange (NYSE) opening bell to commemorate the IPO (IPO) of the company at the NYSE in New York, September 12, 2018.
Brendan McDermid | Reuters
Stocks ended the first quarter on a negative note, but investors should keep an eye on their long-term goals.
Inflation concerns, Federal Reserve rate hikes and the Russia-Ukraine conflict rattled markets in the first three months of 2022. However, keeping a long-term view remains best way to stay calm and collected, especially when picking stocks.
Some of Wall Street’s most accurate pros have highlighted five long-term stocks, according to TipRanks, which tracks top-performing analysts.
Here are the companies that caught analysts’ attention this week.
Supply-side constraints and a tightening of economic activity in general have caused high-growth and tech names to tumble, and for Nio (NIO), investors’ aversion to China-based stocks did not benefit the company.
The EV automaker is down more than 30% year-to-date, though that only makes the stock more attractive, according to Mizuho Securities’ Vijay Rakesh. He said short-term headwinds do not reflect the company’s fundamentals, nor its outlook.
Rakesh rated NIO as a buy, but he lowered his price target slightly to $60 from $65.
The analyst said Nio is “well positioned for long-term growth with a focus on R&D, leadership in premium EVs, accelerating EV penetration in China, expanding ongoing and mass market launch potentially in 2022-23”. He expects the company to ramp up production by the second half of the year.
Nio is expected to increase its presence in the European market, expanding to Germany, Denmark, Sweden and the Netherlands. Rakesh doesn’t expect the company to give up its position as the leader in premium electric vehicles anytime soon.
Several factors have hurt Nio’s production recently, including the earthquake in Japan and increased Covid-19 restrictions in China. (See Nio risk analysis on TipRanks)
There are nearly 8,000 financial analysts on TipRanks, of which Rakesh is ranked No. 31. He was correct in rating stocks 72% of the time, and he returned an average of 49.2% on each.
Twillio (TWLO) has seen its share price drop about 35% since the start of the year, but don’t count the stockouts. The software publisher still has several levers for long-term growth.
Jefferies Group’s Samad Samana noted possible “international expansion, new solutions, and cross-selling offerings from recent mergers and acquisitions” as cards up Twilio’s sleeve. Moreover, the management of the company is convinced that it can achieve growth of 30% or more in the next few years.
Samana rated the stock as a buy and he assigned a price target of $360 per share.
The top-rated analyst mentioned that 52% of the company’s revenue came from its messaging segment in 2021, which generated gross profit and attracted customers to other products. Additionally, the company expanded its workforce and hired more experienced sales representatives. (See Twilio stock charts on TipRanks)
A few telecom giants like Verizon (VZ), AT&T (J), and T-Mobile (TMUS) introduced a subscription fee for the app to personal messaging, which resulted in slower onboarding of Twilio clients. However, TWLO has attempted to streamline this process. Samana thinks this particular obstacle is just a short-term speed bump.
On TipRanks, Samana ranks #433 out of nearly 8,000 analysts. He made the right decision when rating stocks 54% of the time, and he averaged returns of 28% per rating.
The United States and the European Commission recently announced new guidelines for transfers of personal data from the EU to the United States, known as the Trans-Atlantic Data Privacy Framework.
For now, Meta Platforms, (Facebook), remains in a regulatory safe zone and should continue to benefit from ad spend trends, according to Brian White of Monness, Crespi, Hardt & Co.
He said FB’s monetization opportunities in the metaverse remain abundant, and his participation in the broader digital transformation will provide him with tailwinds. (See meta-platform website visits on TipRanks)
White priced the stock long and declared a price target of $375 per share.
The analyst said that while the regulatory review is something investors will have to digest, if Meta is to comply with the newly agreed stipulations, it will avoid being fined or taken to court. The essence of the Digital Markets Act is to “end the domination of Big Tech” and “harness the power of the world’s digital gatekeepers,” so naturally FB is front and center.
Considering Meta is over 40% off its September 2021 highs, the stock looks quite attractive to White. He added that the company has some of the “highest operating margins in our coverage universe” and is expected to trade at a premium.
On TipRanks, White holds No. 112 out of just under 8,000 other expert financial analysts. He maintains a current pass rate of 72% and he has achieved an average return of 33.9% on his grades.
Semiconductor supply chains have suffered, but Micron Technology (MU) The product cycle of dynamic random-access memory, or DRAM, is proving to be a significant tailwind for the chip company.
Hans Mosesmann of Rosenblatt Securities issued his views on the stock after recently reporting quarterly results, noting that the chipmaker has beaten and raised its revenue forecast and now expects to increase gross margins for the coming quarter. . The moves come even as the company grapples with inflationary challenges and component shortages. (See Micron Technology revenue data on TipRanks)
Mosesmann priced the stock as a buy and provided a price target of $165.
For DRAM, the analyst argued that “The mother of all cycles” can only be enabled by DRAM technology and that Micron regularly supplies it.
The analyst wrote that the company “remains our best cyclical play in the semis,” adding that “age-old drivers such as AI, edge computing, data center growth, and 5G network deployments are creating opportunities for Micron”.
In addition to the positive earnings, outlook and various growth drivers for the business, Mosesmann pointed to Micron’s interim CFO, who he believes should remain in that position.
Out of nearly 8,000 analysts, Mosesmann ranks 5th on TipRanks. He was correct in rating stocks 84% of the time, and he returned an average of 77.9% on each of his picks.
One of the biggest companies and retailers in the world is expected to have huge growth prospects and is cheap. Evercore ISI’s Mark Mahaney recently highlighted four main reasons why Amazon (AMZN) remains an attractive investment.
Its factors covered Amazon’s “underappreciated elements,” which included consumer interest in fast shipping, the company’s isolated advertising activities, grocery store potential, and an overall discount valuation. (See Amazon.com hedge fund activity on TipRanks)
Mahaney maintained a buy rating on the stock and offered a price target of $4,300 per share.
The analyst noted that the company increased its storage capacity by 350 million square feet in 2020 and 2021. This brings Amazon closer to its consumer. Additionally, AMZN has doubled its “super same-day shipping” capabilities in the past six months as consumers have shown strong interest in five-hour shipping rates.
Regarding the conglomerate’s advertising business, the analyst noted that due to Amazon’s “closed-loop ecosystem” it is largely insulated from the “headwinds of privacy-focused ad attribution. “. The e-commerce giant has also bolstered its advertising assets such as the Fire TV platform and its brand awareness with third-party entertainment entities.
As for Amazon’s grocery frontier, Mahaney said “Just Walk Out” technology is a game-changer and is now being incorporated into new locations, albeit slowly. Groceries are the largest category of consumer spending. For Amazon, this indicates a huge total addressable market to capitalize on over time.
TipRanks has a database of nearly 8,000 analysts, on which Mahaney ranks 387th. He maintains a pass rate of 55% and averaged 25.3% of his marks.