The market’s pace has been dictated by economic data and earnings reports as traders look for cues as to what the Federal Reserve would do next.
The payrolls report for July came in stronger than anticipated, increasing by 528,000, indicating that there is still plenty of momentum in the labour market. The Fed is expected to maintain its strong stance on interest rates, leading traders to predict increased odds for a 0.75 percentage point boost in September.
Investors would be wise to choose their stocks with a long-term perspective, despite how alluring it may be to monitor equities minute by minute.
To that end, TipRanks, a website that rates analysts based on their performance, has listed five stocks recognised by Wall Street’s top experts.
Airbnb
The ongoing financial tensions in the U.S. and the sluggish travel recovery in Asia have had an impact on the operator of the online hosting marketplace Airbnb (ABNB). Despite the company’s record-breaking bookings, investors seemed dissatisfied with it.
However, the company’s second-quarter earnings showed a significant increase in travel as domestic and international skies as well as economies reopened.
The Wells Fargo analyst Brian Fitzgerald was impressed by Airbnb’s organised operational procedures and effective execution in spite of the difficulties. The expert thinks that in a relatively new and developing area of the hospitality business, Airbnb has a first-mover advantage. He thinks that an increase in stock positions can result in strong long-term gains during a post-earnings share price decline.
Fitzgerald sees the company’s third-quarter outlook as a positive and keeps a buy recommendation on it “reflection of shifting consumer booking patterns/windows amid high reopening demand than a reflection of company- or category-specific growth limitations.”
Fitzgerald, however, reduced his previous price forecast from $250 to $185 in the short run.
In the database of TipRanks, Fitzgerald is ranked No. 151 out of approximately 8,000 analysts. Averaging 18.2 percent in returns per rating, 57 percent of his ratings have been lucrative.
ArcBest
ArcBest (ARCB) is a player in the transportation industry. Its affiliates are engaged in less-than-truckload (LTL) business. Despite being exposed to numerous supply chain and macroeconomic issues, ArcBest has managed to thrive admirably, as seen by its most recent quarterly report.
Results for ArcBest’s second quarter exceeded forecasts, in part thanks to MoLo, its truckload brokerage company. The strong performance of the core LTL business, which saw growth in revenues and tonnage, was another highlight of the quarter.
The company’s success was encouraging to Cowen analyst Jason Seidl, despite his observation that “some freight softness in 2H despite a stronger than expected July.”
The weak spot market environment, which caused ArcBest’s asset-light business to sequentially drop, was another issue that Seidl raised. International commodities are traded on the spot market for prompt payment and delivery.
Seidl noted that ArcBest’s mix of contractual business has increased as a result of the acquisition of Molo. This should act as a little cushion for the company against spot market volatility.
Seidl cut his price objective from $133 to $127 due to short-term difficulties. Overall, though, the analyst maintained a buy rating on the company and remained optimistic about ArcBest’s long-term potential.
Among the almost 8,000 experts assessed on TipRanks, Seidl is ranked No. 4. Additionally, his ratings have generated returns that have been favourable 60% of the time, with average returns of 26.6 percent per rating.
Cirrus Logic
This year has been difficult for the majority of chipmakers with exposure to the mobile phone sector. One of those businesses is Cirrus Logic (CRUS), which provides optimised integrated circuits for a variety of audio, industrial, and energy-related applications.
Cirrus recently reported strong quarterly profits. Christopher Rolland, a Susquehanna analyst, examined the company’s prospects after the print.
Rolland emphasised Cirrus’ long-standing, solid connection with its top client, Apple. “We believe their relationship with Apple has never been better, and the solid outlook provided this quarter only reaffirms our belief,” the analyst stated.
Rolland also emphasised the firm’s ongoing dedication to a robust share repurchase programme. A $500 million share repurchase programme was also announced by Cirrus, in addition to the $136.1 million still available under an earlier 2021 repurchase authorisation.
“With almost $7 billion in net cash, we would hope Cirrus would accelerate these purchases in front of the strong outlook,” said Rolland, reaffirming his buy rating for the company and his $110 price objective.
One of the five-star Wall Street analysts on TipRanks is Christopher Rolland. Among the over 8,000 analysts tracked by the platform, he is in sixth place. Additionally, 73% of his predictions have come true, and each prediction has generated an average return of 25.4%.
Monolithic Power
Monolithic Power (MPWR) creates power solutions for a variety of sectors, such as cloud computing and telecommunications, although it has been hampered by weakening consumer end market demand. However, the business lately provided optimistic results and encouraging commentary.
The company’s increased “new greenfield design wins and market share gains,” noted Needham analyst Quinn Bolton, confirmed his conviction that Monolithic Power is the “fastest secular grower in the analog segment.”
Monolithic Power has grown more quickly than its competitors in the analog/mixed-signal market thanks to its level of expertise in unique BCD process technology and applications. “We believe MPS will continue to grow faster than the analog market driven by market share gains, the ramp of new products/design wins and co-development projects with tier-one customers,” said Bolton.
Quinn Bolton confirmed a buy recommendation on the company and increased the price target to $550 from $500 based on his study of Monolithic Power.
Bolton is ranked first in the vast database of about 8,000 analysts TipRanks tracks. Overall, 45.1 percent in average returns per rating were earned from his 74 percent profitable ratings.
Pinterest, a social media stock, is Brian Fitzgerald’s additional top pick (PINS). The company has been hampered by fierce competition, losses brought on by inflation, and other challenges that have shaken investor confidence. However, its most recent quarterly earnings were better than anticipated.
Fitzgerald criticised management’s “constructive commentary,” which emphasised the monthly active users’ (MAUs’) return to typical seasonal growth patterns in the second half of 2022 and a decrease in investments in 2023 that would result in margin expansion.
The respected activist investor Elliott Management’s endorsement of Pinterest’s business plan also encouraged the analyst.
However, this year’s operational costs are anticipated to be high in the short term. Additionally, additional challenges are anticipated to keep year-end sales pressure high. Fitzgerald lowered the price target from $37 to $34 as a result of these projections.
Even yet, the analyst confirmed his buy recommendation for PINS and expressed his continued confidence in the longer-term prospects. “While we believe some investors remain skeptical of PINS’ Idea Pins content strategy, we see an emerging content consumption/creation flywheel and think PINS is making the right moves to drive engagement while continuing to refine relevance and shopping tools,” he said.
