Which hot stocks are Wall Street analysts the most bullish on? The top stocks with no “hold” or “sell” ratings and a pure “strong buy” analyst consensus rating. Such strong buy stocks make for the most compelling investment opportunities — and I recommend keeping a close eye on them as we roll into 2018.
Using TipRanks’ powerful stock screener, I set out to pinpoint seven stocks that command the unanimous support of the Street. You can customize the screener filters to match your investment strategy.
In this instance, I searched for mega-, large- and medium-cap stocks with a “strong buy” consensus rating from analysts and best-performing analysts. These are the top analysts with the highest success rates and average returns.
From the results, you can immediately see a pie chart showing the spread of analyst ratings (buy, hold and sell) on each stock over the past three months. This makes it very easy to spot the best stocks with only “buy” ratings.
Now let’s dive in and explore the seven stock picks that all boast 100% Street support.
Strong Buy Stocks: Agios Pharma (AGIO)
This fast-growing healthcare stock is already up by over 48% year-to-date. And analysts are predicting big upside potential of close to 30% for the next 12 months. Indeed, in the last three months, Agios Pharmaceuticals, Inc. (NASDAQ:AGIO) has scored an impressive seven back-to-back analyst “buy” ratings. Let’s take a closer look at just why analysts are so bullish on this stock.
Agios is focused on developing anti-cancer therapies. It is concerned with small-molecule anti-cancer therapeutics that target cancer cell metabolism via the growth factor pathway. The company recently had its first drug approved by the FDA, and now Oppenheimer’s Leah R Cann says “We anticipate that Agios will launch additional novel products in the next few years.” He has a “buy” rating and $83 price target on the stock (34% upside potential).
In fact, Cann estimates that Agios’ revenue will grow substantially over the next five years, reaching $1.47 billion in 2021. In the third quarter, Agios easily beat his expectations with higher revenue, interest income and far lower operating expenses than anticipated. Revenue, for example, came in at $10.6 million instead of the estimated $9.1 million.
Strong Buy Stocks: Alibaba (BABA)
Chinese e-commerce king Alibaba Group Holding Limited (NYSE:BABA) is one of the Street’s hottest stocks. In the last three months, no less than 19 analysts have published “buy” ratings on BABA. Meanwhile, the average analyst price target of $211 suggests BABA can still grow by 13.5% over the next 12 months.
Earlier this week, on China’s Single’s Day, BABA recorded a jaw-dropping sales performance. In a single day, the company’s sales hit $25 billion, up 40% from last year. And to fulfill these orders, Alibaba processed 1.48 billion transactions in 24 hours. This huge shopping festival, held on Nov. 11, is like the Chinese equivalent of Black Friday but about four times bigger.
Top RBC Capital Mark Mahaney reiterated his “buy” rating on BABA on Nov. 2. His “buy” rating came with a $220 price target, which suggests upside of 18% from the current share price. BABA is perfectly positioned to capitalize on fast-growing markets like China and the internet says Mahaney. He lists three key reasons why he is such a fan of the stock:
“Our basic thesis on BABA is threefold- 1). BABA is a great play on the dramatic secular growth that is China (China per capita GDP growth faster than U.S. and still 1/7th the size); 2) BABA is a great play on the dramatic secular growth that is the Internet; & 3) Management’s long-term focus and excellent execution arguably makes BABA the single best play on points 1 & 2.”
Strong Buy Stocks: Delta Airlines (DAL)
One of the U.S.’s largest airline companies, Delta Air Lines, Inc. (NYSE:DAL) is a top analyst favorite right now. In the last three months, analysts have recorded a unanimously bullish outlook on the stock with six straight “buy” ratings. These analysts have a price target on DAL of $66.50 — suggesting upside of 36% from the current share price.
“We reiterate our Outperform rating on DAL due to attractive valuation, anticipated continued unit revenue recovery, and the strong balance sheet” writes top Raymond James analyst Savanthi Syth.
She reiterated her “buy” rating on the stock last month without a price target. DAL’s third-quarter earnings revealed better-than-expected revenue and EPS. These came with upbeat predictions for the current quarter’s average passenger revenue metric- a key measurement of success for airlines.
Delta is benefiting from low fuel costs, pricing power and improving international results. According to Bloomberg sources, Delta is now about to order 100 single-aisle jets worth up to $12.7 billion from either Boeing or Airbus Bloomberg.
Meanwhile, the company is also looking to hire more than 1,000 flight attendants in 2018.
Strong Buy Stocks: Broadcom (AVGO)
Semiconductor giant Broadcom Limited (NASDAQ:AVGO) has only received “buy” ratings for the last 10 months. Indeed, in the last three months alone 23 analysts have published AVGO buy ratings- making this one of the Street’s undisputed favorite stocks. Plus, with an average analyst price target of $298 vs the current share price of $265, it seems like AVGO still has plenty of room for its stellar expansion to continue.
Indeed, several top analysts are even more bullish on the stock’s potential. Only six days ago, top SunTrust Robinson analyst William Stein raised his price target on Broadcom to $325 from just $281 previously. His new price target, the stock’s highest yet, translates into 22.6% upside from the current share price.
Stein says he likes the way AVGO CEO Howard Tan uses M&A to generate earnings growth. A prime example is AVGO’s recent $70 per share offer for smartphone chip supplier Qualcomm, Inc. (NASDAQ:QCOM).
Although the unsolicited bid has now been rejected by QCOM, it could still succeed as a hostile bid or AVGO could bounce back with a higher offer. Either way, if the $100 billion-plus deal goes through it would be one of the biggest tech deals ever.
Note that this five-star analyst has a very strong track record with his AVGO recommendations. Across his 13 ratings on the stock, he has a 92% success rate and 28% average return.
Strong Buy Stocks: Fleetcor Technologies (FLT)
FleetCor Technologies, Inc. (NYSE:FLT) provides fuel cards and workforce payment products and services. Their customers include businesses, commercial fleets, oil companies, petroleum marketers and government in America, Europe and Brazil.
“FleetCor provides a healthy blend of organic and acquired revenue/profitability growth” advises top Oppenheimer analyst Glenn Greene. Indeed, in the last three months, shares have exploded from about $140 to the current share price of $180.
Taking this into account, it is not surprising that in this time the stock has received seven analyst “buy” ratings. And with an average price target of $197, analysts are predicting further upside of just over 9% for this stock.
On Nov. 1 Greene called results for the third quarter “solid” and significantly amped up his price target to $194 from $185. He writes “with shares trading at 17x our revised FY18E, macro factors now modestly favorable, and line-of-sight toward normalized mid-teens organic (perhaps 15-20% overall) EPS growth, shares appear attractively valued.”
Bear in mind that Greene seems to know what he is talking about: he is ranked #6 out of over 4,700 analysts tracked by TipRanks.
Strong Buy Stocks: Cognizant (CTSH)
IT services firm Cognizant Technology Solutions Corp (NASDAQ:CTSH) certainly has the Street’s seal of approval. CTSH received a slew of “buy” ratings following its recent third-quarter earnings results. While the company reported results mostly in line with expectations, analysts cheered the company’s operating profit margin of almost 20%.
In fact, top William Blair analyst Anil Doradla was so encouraged by the results that he upgraded the stock from “hold” to “buy”. He sees multiple reasons to be bullish on CTSH including the similarity with highly-successful consultancy firm Accenture Plc (NYSE:ACN):
“Given the multiple disparity between Accenture and Cognizant, we believe there is potential upside to Cognizant’s multiple as investors increasingly associate Accenture as Cognizant’s closest peer. As seen in the exhibit below, Cognizant’s operating model has become similar to Accenture’s given its new focus on the shift to digital, margin expansion, and capital returns.”
In fact, Doradla sees multiple positive tailwinds for the stock and concludes:
“Bottom line, despite of some of our concerns with Cognizant’s core business, we believe the stock will outperform over the next 12 months given changing investor sentiment, the business model transition to a capital return story, and less severe sector headwinds than previously expected.”
Strong Buy Stocks: Applied Materials (AMAT)
Last but not least, we have Applied Materials, Inc. (NASDAQ:AMAT), a “strong buy” stock with plenty of potential. The company specializes in the equipment, services and software needed to make semiconductor chips. Over the last three months, 12 analysts have recorded a bullish sentiment on the stock.
One of these analysts is B. Riley’s Craig Ellis. He reiterated his “buy” rating on Nov. 13 with a $63 price target (11.5% upside potential). Even though expectations for AMAT are already relatively high, Ellis says there are “numerous reasons shares could continue to perform well in the next 12 months.”
For example, Ellis believes the Street under-models a potentially significant China spending ramp beginning in 2018. He also believes that with increasing conviction of F20’s target EPS of $5.08, sentiment and value will rise.
“Valuation remains inexpensive and in our view at 15.0x and 13.9x our F18/19 EPS and just 11.1x F20’s target. In sum, we believe shares under-appreciate attractive long-term growth potential and believe shares remain attractive for larger cap GARP investors” summarizes this top 25 analyst.
Which stocks are the top 25 analysts recommending right now? Find out here.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of 4,500 analysts, 5,000 financial bloggers and even 37,000 corporate insiders. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.