Last week’s unexpected consumer inflation data caused some anxiety among investors, but looking ahead, it may be beneficial to maintain a long-term perspective when seeking investment opportunities. Some of Wall Street’s most respected analysts are highlighting their preferred stocks with an eye on long-term growth potential. According to TipRanks, a platform that ranks analysts based on their track record, there are three stocks that are favored by these financial experts.
Starting off the list is the e-commerce and cloud computing giant, Amazon (AMZN). As the company prepares to release its quarterly results, several analysts have been reiterating their positive outlook on Amazon’s stock. Mizuho analyst James Lee, for example, has reaffirmed a buy rating on AMZN with a price target of $230. In particular, Lee is optimistic about the growth of Amazon’s cloud computing unit, Amazon Web Services (AWS), and anticipates an acceleration in revenue for AWS by 2024. His confidence in Amazon’s future remains unwavering, as he views AMZN as the top pick for his firm.
Based on recent data from a quarterly survey conducted by Mizuho with an AWS channel partner, Lee observed some key trends. There is a noticeable increase in the sales cycle, evidenced by AWS customers requesting more executive business meetings. Moreover, there is a faster termination rate of on-premise data center contracts among AWS clients, signaling a more rapid migration of workloads to the cloud. Lee also noted an accelerated budget growth, with the channel partner forecasting a 20% year-over-year increase in AWS spending, surpassing the consensus estimate of 15%. Currently ranked 428th out of over 8,700 analysts by TipRanks, Lee has a success rate of 59%, with an average return of 11.5%.
Moving on to Acushnet Holdings (GOLF), a company specializing in golf products, they reported net sales of $2.4 billion in 2023, representing a 4.9% annual growth. An increase in sales volumes of golf balls, clubs, and gear under the Titleist brand contributed to the revenue growth. Tigress Financial analyst Ivan Feinseth recently reiterated a buy rating on GOLF with a revised price target of $74, up from $68. Feinseth anticipates that the company will benefit from an influx of new players into the sport, an uptick in rounds played, and the launch of new products across its leading brands.
Feinseth highlighted positive trends that are expected to bolster Acushnet’s performance. The golf industry has witnessed a steady rise in new golfers over the past six years, with total rounds played increasing from 800 million in 2019 to 950 million in 2023. This growth trajectory is projected to continue, benefiting Acushnet. The analyst emphasized the strength of GOLF’s brand equity, particularly with their top-of-the-line product offerings like FootJoy and Titleist, as key drivers of the company’s premium market valuation. Additionally, Acushnet has been committed to enhancing shareholder value through dividend increases and share repurchases. Recently, the company raised its quarterly dividend by 10.3% and authorized an additional $300 million for share repurchases. Feinseth currently ranks 243rd among TipRanks’ analysts, with a success rate of 61% and an average return of 12.4%.
Rounding out the list is BJ’s Wholesale Club (BJ), a membership-only warehouse club chain. Goldman Sachs analyst Kate McShane recently upgraded BJ to a buy rating from hold and raised the price target to $87 from $81. McShane is optimistic about the company’s market share expansion and optimistic industry trends driving robust revenue growth. The grocery segment accounted for 86% of BJ’s merchandise sales in fiscal 2023, a factor that McShane sees as pivotal for the company’s revenue outlook. With a focus on increasing customer engagement in the general merchandise category and refreshing the product assortment, McShane foresees potential growth opportunities.
McShane also anticipates that BJ will benefit from a potential hike in membership fees, as the company boasts a robust membership base of over 7 million accounts, coupled with an impressive renewal rate of 90% in fiscal 2023. The analyst believes that BJ’s Wholesale Club offers an enticing club model with a strong value proposition, paving the way for sustained market share expansion over the long run. Ranked 959th among TipRanks analysts, McShane has a success rate of 62%, with an average return of 5.1%.
While short-term market fluctuations may trigger concerns, focusing on stocks with solid long-term growth potential can be a strategic approach for investors. These three stocks, endorsed by top Wall Street analysts, exemplify companies with promising outlooks and compelling growth prospects. By conducting thorough research and analysis, investors can identify opportunities that align with their investment strategies and long-term financial goals.
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