Wall Street analysts see stocks like Target and Microsoft on the rise

As the year progresses, the vast majority of companies have already published their latest quarterly results.

The economic recovery accelerated during the first half of 2021 and many companies earned massive revenue. Now, investor attention has shifted from summer and travel trends to what the fall season may have.

With TipRanks ’unique tools, investors can see which companies top Wall Street analysts believe are well positioned to capture these changing trends. These analysts are among TipRanks ’best ranked, based on their success rates and average returns by rating.

Listed below are five stocks that Wall Street’s best-performing analysts think still have great bullish potential after gains.

Companies have been preparing their staff for the big return to the office, some hybrid and others full-time. However, due to the high COVID-19 infection rate in the US, several high-profile companies like Apple have just announced delays in their return dates. This bodes well for cloud computing architecture services, such as Microsoft’s Azure and Office 365 platforms.

After reviewing Microsoft’s performance, Wedbush Securities ’Daniel Ives said he sees the work-from-home trend persist. After showing strong momentum throughout 2020 and the first half of 2021, Microsoft continues to close large offerings for both business packages and consumers of its cloud-based services. These offers are expected to provide revenue for Microsoft by 2022.

Ives maintained its stock purchase rating and raised its target price upward from $ 325 to $ 350.

The five-star analyst added that in the “cloud arms race,” Microsoft is about to capture more market share than Amazon Web Services. Microsoft has recently raised its prices for Office 365, which Ives predicts could generate more than $ 5 billion by 2022.

Regarding a selection of long-term cloud computing stocks, Ives stated: “Microsoft remains our favorite capitalization cloud game and we believe stocks will increase by the end of the year as the street appreciates even more. the history of cloud transformation “.

Out of more than 7,000 TipRanks analysts, Ives ranks 36th. The analyst has a 73% success rate on its shares, which translates to an average return of 34% per rating.

U.S. consumer discretionary spending trends have spread over the past year and a half, especially when it comes to digital shopping. Target has been successful in capturing these moves and is well positioned to continue to do so.

Robert Drbul, of the Guggenheim, reported bullish on the shares, saying he is “encouraged by the continued strength of Target’s business, its profitability and the generation of cash flows.” Target recently reported second-quarter results, beating Wall Street consensus estimates by 7% in earnings per share, as well as in several other key sectors and metrics.

Drbul reiterated Target’s purchase rating and raised its target price from $ 250 to $ 295.

The five-star analyst mentioned that Target has continued to see growth that instills confidence in both stores and digital sales. The merchandise retailer overall recorded clear success in its in-store fulfillment operations, moving 95% of total quarter sales and capturing growing online demand. Same-day shipping and collection services expanded 55% more in the same time period, following a massive 270% growth in 2020.

Large stores continue to be relevant through high-profile brand associations. In addition, Drbul noted that “the five core categories of merchandise produced positive comparable sales, in addition to last year’s historic sales performance.”

While increases in transportation and shipping costs slightly affect Target’s margins, the company has approved up to $ 15 billion in share repurchases and has already completed the $ 1.5 billion repurchase in shares of the previously approved program. .

At TipRanks, Drbul is ranked # 319 of over 7,000 analysts. Its average performance by rating stands at 12.3% and it currently maintains a success rate of 67%.

Closed semiconductor factories, combined with higher demand for smartphones, computers and cars caused by the economic changes of the Covid-19, created the perfect storm. A steady shortage of semiconductors has been putting pressure on tech and automotive manufacturers for much of the second quarter. Although several analysts believed he was relaxing, the situation is not that simple. However, the increase in demand is good for applied materials, which is expected to continue to grow until 2022.

Bullish Quinn Bolton of Needham & Co. believes the action “will surpass its peers in 2022 due to a structurally favorable WFE [wafer fab equipment] mix next year “.

Bolton reiterated the share purchase rating and declared a target price of $ 153.

Just last Thursday, Applied Materials reported strong second-quarter earnings results, surpassing Wall Street consensus estimates on earnings per share and gross margin, as well as raising guidelines for the third quarter.

The expansion of semiconductor demand has been evened out, as the company is committed to increasing supply. Despite this, dynamic memory chips with random access remain insufficient, even though their “spot prices began to drop a couple of weeks ago,” Bolton wrote.

Bolton claims Applied Materials has an outstanding portfolio of more than $ 10 billion. This fact only underscores the fundamental health of the company and its potential for steady revenue, moving forward.

TipRanks ranks the five-star analyst as # 5 of more than 7,000 total site analysts. The success rate of its stock remains at 74% correct, and its average return is 45.1% per valuation.

Identifying trends is one of the main requirements of leading Wall Street analysts. In fact, the trends are in favor of Petco. The Covid-19 pandemic kept people at home, and many acquired pets in need of care. As this pattern adheres, Petco will benefit.

Peter Benedict, of Robert W. Baird, wrote that Petco “operates a unique and fully integrated pet care ecosystem within the US 100B pet market.” Its strong second-quarter earnings, roadmap to health care supply, and reduced debt burdens help classify it as an attractive stock.

Benedict maintained a purchase rating on Petco and assigned a target price of $ 30.

The analysis noted that he called it “lifetime income” for pets, that various services need to be maintained, so customers are recurring. Petco is already capturing this market with its diversified offers and has also been expanding its own veterinary services. This opportunity is seen by Benet as a long-term initiative that will expand market share.

The company printed second-quarter quality results, exceeding expectations and increasing its focus. Benedict added that as economies opened up, “in-store purchases led to robust sales of pet care centers” and top-quality services such as cleaning, training and medical services are in high demand.

Considering the company’s additional initiatives in “merchandising, services, digital capabilities and data analytics,” Benedict said Petco’s shares have an attractive valuation.

Benedicte is ranked by TipRanks as the number 25 of over 7,000 experts and 83% of his ratings have been successful. Average gets a return of 24.9% per rating.

Another massive semiconductor company has experienced high sustained demand for its chips. Nvidia was successful in closing an optimistic Q2 and is expected to continue to earn revenue as gaming and carmakers demand their products. As the company struggles to close a takeover deal, Needv & Co.’s Rajvindra Gill posted its bullish hypothesis about its future prospects.

Gill reiterated the stock’s buy rating and raised its target price from $ 200 to $ 245 per share.

Nvidia exceeded consensus on Wall Street’s second-quarter estimates of earnings per share and gross margin. With the expansion of its margins, Gill expects the company to have “significant operational leverage.”

On the downside, the five-star analyst does not expect Nvidia’s acquisition of technology firm Arm Ltd. close soon. Obstacles are increasing and negotiations are stretching overhead, so he estimates a 20% chance of success for that opportunity.

Despite this, the demand for data centers is growing significantly as the trend of enterprise-sized cloud computing continues. In addition, Gill identifies a growth opportunity, as an Internet service provider can manage a complete data center based on Nvidia’s triton programming language. Data center accumulations continue to be Nvidia’s main growth engine.

In addition, the analyst is not concerned about the volatility of cryptocurrency mining regulations. He writes that while some products use Nvidia products, the company’s exposure to this revenue stream is not significant.

For Gill, Nvidia is still a purchase in part because of its attractive rating. He is encouraged by his “superior balance sheet,” which he considers “the best in the industry.”

At TipRanks, Gill has a # 161 ranking among more than 7,000 Wall Street analysts. His grades return an average of 18.2% and he is successful 68% of the time.