Wall Street Experts See Solid Potential in These 3 Stocks
By Jace Dela Cruz
Dec 10, 2023 11:20 PM EST
Dec 10, 2023 11:20 PM EST
Retail investors are struggling to navigate the fluctuating stock market as economic data comes in and the Federal Reserve's rate decision approaches. With that in mind, Wall Street analysts offer guidance on promising stocks for investors to consider.
Citing data from TipRanks, a platform that ranks analysts based on past performance, CNBC reported three stocks favored by Wall Street's top pros to help investors avoid making impromptu decisions based on short-term market activity. Here they are!
Tech giant Microsoft (MSFT) secures a prominent position with its aggressive pursuit of growth opportunities in generative artificial intelligence. Tigress financial analyst Ivan Feinseth cited Microsoft's recent report of having its strongest sales gain in six quarters due to the performance of its cloud computing business benefiting from new artificial intelligence (AI) products.
The recent Activision Blizzard acquisition is expected to fortify Microsoft's gaming business. With a strong balance sheet and cash flow, Microsoft aims to fund strategic investments and growth initiatives and enhance shareholder returns through dividends and share repurchases, according to Feinseth.
Cloud-based customer relationship management software provider Salesforce (CRM) also emerges as a top pick, demonstrating resilience in the face of macro headwinds. Despite challenges, Salesforce reported robust fiscal third-quarter earnings attributed to productivity measures and cost reductions.
Mizuho analyst Gregg Moskowitz underscored the robust early renewal activity of the company and a notable deal, resulting in a 14% surge in the remaining performance obligation, exceeding management expectations. Other favorable signs include enhanced operating margins, heightened cash flow from operations, and successful ventures into offerings related to AI.
Moskowitz reaffirmed a buy rating, elevating the price target to $280 from $255, underscoring Salesforce's capacity to assist customers in optimizing revenue and processes through digital transformation.
Fintech company Block (SQ) gained attention for its impressive third-quarter performance, driven by substantial growth in both its Cash App and Square platforms. Deutsche Bank analyst Bryan Keane increased the price target for SQ stock to $90, citing improved margins and substantial free cash flow generation.
Keane anticipated enhanced monetization rates for Cash App and positive yields for the Square ecosystem. He highlights sustained high growth and significant profitability improvements as key factors. Block's recent $1 billion share buyback plan and positive momentum post-results contribute to its favorable position.
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