Do you want to find stocks that analysts love? It’s surprisingly easier than you would think.
Despite the market under intense selling pressure at the moment, there are a lot of companies that are doing well. The number of stocks that are doing well continues to dwindle, but that doesn’t mean they will flounder forever.
To find the stocks that analysts love, look no further than those that are performing well after reporting earnings.
A bulk of stocks are experiencing a “sell the news” reaction to their quarterly reports. However, that’s not the case across the board. Let’s get a run-down of the companies that are doing well and why the analysts are heaping the love on them as a result.
Here are the stocks that analysts love right now:
- Airbnb (NASDAQ:ABNB)
- Apple (NASDAQ:AAPL)
- Upstart Holdings (NASDAQ:UPST)
- Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG)
- Caesars Entertainment (NASDAQ:CZR)
- Ford (NYSE:F)
- Signature Bank (NASDAQ:SBNY)
Stocks That Analysts Love: Airbnb (ABNB)
Average Analyst Price Target: $201, 29% Upside
Airbnb shares have been bucking the selloff for several weeks now. While the stock did have a mild correction at the start of the year, it’s rebounded nicely since then. When compared to other growth stocks — and even the S&P 500 — these losses are not that bad.
Admittedly though, the stock has had a rough go of it over the last two weeks.
Recent performance aside, this stock has been rocketing off the lows because the trend has been so favorable for it. Not the trading trend, but the business trend. All sorts of consumers are starting to travel again. Some are taking retreat-like trips to unpopulated areas, while others are back in the swing of things and traveling to dense areas.
That trend is clear in travel-related stocks and Airbnb is no exception. The company’s earnings report on Feb. 15 saw Airbnb deliver a top- and bottom-line beat and provide better-than-expected guidance.
Apple (AAPL)
Average Analyst Price Target: $193, 16% Upside
When Apple reported earnings, investors were nervous. There was constant talk about supply chain issues impacting its crown jewel of hardware: The iPhone.
Investors worried that a fall off in iPhone revenue during its biggest quarter would negatively impact the top and bottom line. That would negatively impact its services revenue too, which has robust top-line growth and double the profitability of its hardware business.
When Apple reported better-than-expected results, the stock was able to rally. It wasn’t enough to take out its highs from earlier in 2022 when the company hit the $3 trillion valuation mark, but the rally was enough to help stabilize the market at the time.
Given the company’s fortress balance sheet, near-constant accumulation of its stock via massive buyback programs and business that has an incredibly sticky retention rate with its customers, there’s little reason to be a long-term bear on Apple.
Stocks That Analysts Love: Upstart Holdings (UPST)
Average Analyst Price Target: $214, 52.3% Upside
Growth investors are experiencing what a bear market really looks like. Many of these investors were likely not around in 2000 or in 2008. Even though the indices are only down between 13% and 17% right now, many growth stocks are down 65% to 80% from their high.
Upstart is down considerably from the highs too, 64% below the all-time high from November. However, the fact that it was hitting its highs in November is a pretty good sign, in my opinion. Why? Because most growth stocks were in multi-month slumps at that point, grinding out new lows.
When this group comes back, I think Upstart will be among the winners. It still sports robust growth, with analysts expecting revenue to climb more than 60% this year and more than 30% in 2023. Further, Upstart is also profitable.
It’s also one of the few growth stocks to have a post-earnings rally after reporting its quarterly results. The company drew a handful of price target increases after the report and an upgrade from Bank of America.
The average price target sits up at $214, which is higher by about $70 a share or more than 50% above current levels.
Alphabet (GOOGL, GOOG)
Average Analyst Price Target: $3,506, 30% Upside
When the crap hits the fan, where do you think investors want to hide out? Mega-cap tech, and that’s exactly where the analysts want to hide out too.
Why? Because these companies are likely to maintain growth, have fortress balance sheets, big share buyback plans and impressive cash flow. They can operate from a position of strength rather than weakness, regardless of what the stock market is doing.
Alphabet is one such company, with robust revenue growth, margins and profitability. Shares popped to new all-time highs when the company reported earnings, which included more than 30% revenue growth.
Its YouTube business continues to drive incredible growth and remains the No. 2 website in the world (behind the company’s other cash cow: Google.com).
It was disappointing to see the stock fade from its new highs after their recent slam dunk earnings report. However, it’s giving investors an opportunity to scoop up the stock on a discount, provided they don’t believe the entire market will capsize from here.
The price target increases have been pouring in since earnings, with the average target now sitting up at ~$3,500. That implies roughly 30% upside from current levels.
Stocks That Analysts Love: Caesars Entertainment (CZR)
Average Analyst Price Target: $118, 37% Upside
Just as we spoke about Airbnb’s return-to-normal catalyst, so too is Caesars Entertainment. The casino and hospitality operator is enjoying a return to normal as traveling picks up pace. If anyone’s looking to book a weekend trip to Vegas, they’ll know just how busy it is.
The company just reported earnings on Feb. 22 and the company’s revenue almost tripled to $9.6 billion last year. In 2022, consensus expectations call for 15% growth to $11 billion. While that represents quite a year-on-year deceleration, consider just how much growth the company enjoyed last year. Further, as Caesars cruises toward a return in profitability, it will result in an enormous rebound in margin and cash flow.
There are other catalysts in play too. For instance, Bain Capital recently assigned a $191 price target on the stock, implying more than 100% upside. The argument is: “Analyst David Bain noted that CZR’s share price infers a negative value for its digital business versus multiple billions of equity value applied to lower-quality online gaming peers.”
Ford (F)
Average Analyst Price Target: $21.60, 21% Upside
Ford is in the midst of an EV revolution. The company has already launched its Mustang Mach-E vehicle, which Consumer Reports absolutely loves. The publication has called it the top EV this year.
Ford is also electrifying its Transit van and the F-Series pickup. The latter is a biggie. Not only is the F-Series the best-selling pickup in the country, it’s the best-selling vehicle in the U.S.
After the automaker logged more than 200,000 reservations for the F-150 Lightning — the electric version of the pickup — Ford stopped taking reservations. Shortly after, the company said it would double production capacity for the Lightning to 80,000 units a year.
While Ford recently squashed the idea of spinning out its EV unit, it highlights a promising foray into the industry. Lastly, Ford recently reinstated its dividend and currently pays out a 2.28% yield.
Stocks That Analysts Love: Signature Bank (SBNY)
Average Analyst Price Target: $430, 27% Upside
Energy stocks have been the best-performing sector so far this year. While financials have not performed that well in comparison, it is one of the best-performing sectors in the market. That says a lot about the current environment.
In any regard, Signature Bank has found the sweet spot in terms of performance.
Shares are outperforming its own sector, as well as the overall market, up 8.2% on the year. Over the last 12 months, the stock is up 60%. Of course, robust growth (well, robust for a bank) really helps in this regard.
Analysts expect 36.5% revenue growth in FY 2022, followed by 26.5% growth in 2023. On the earnings front, consensus estimates call for roughly 30% growth in FY 2022 and 28% in FY 2023. As it stands, that would have the bank earning about $25 a share in profit in FY 2023, valuing Signature Bank at less than 13 times forward earnings.
Despite the stock’s strong run, that’s why analysts have a ~$430 price target, implying 27% upside.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
