Earnings season gives analysts a lot to think about as they gain a better understanding of the impact of macro challenges on companies.
While Wall Street is focusing on short-term stock moves fueled by quarterly results, top analysts are focusing on the company’s longer-term prospects.
With that in mind, here are three stocks to like Wall Street’s Top ProfessionalsAccording to TipRanks, the platform ranks analysts based on their past performance.
Netflix
Netflix (NFLX) is this week’s first choice. The streaming giant reported better-than-expected first-quarter 2024 results. The company said it is more focused on revenue and operating margin metrics.
Following the first-quarter report, BMO Capital analysts Brian Pitts Reaffirmed a Buy rating on NFLX stock with a price target of $713. The analyst highlighted that the company added 9.3 million new subscribers, easily beating BMO’s estimate of 6.2 million and Wall Street’s forecast of 4.8 million.
Pitts added that Netflix once again proved it could grow in the United States, adding 2.5 million net subscribers in the U.S. and Canada in the first quarter. He expects membership numbers to continue to grow, driven by continued paid sharing efforts and content innovation.
Explaining his optimistic view, Pitts said, “As linear TV viewership declines, $17 billion in content investments through 2024 will allow Netflix to continue to grow wallet share.”
Despite Netflix’s growth investments, analysts expect operating margins to improve this year and beyond. He also expects the company to benefit from its focus on advertising given that $20 billion in global linear TV ad revenue is expected to shift to connected TV (CTV)/online over the next three years, including $8 billion in the United States.
Pitz ranks No. 155 among more than 8,700 analysts tracked by TipRanks. His ratings were profitable 75% of the time, with an average return of 18.4% each time. (look Netflix ownership structure on prompt ranking)
General Motors
Next up are car manufacturers General Motors (General Motors), the company announced impressive first-quarter results and raised full-year guidance on the back of strong performance in North America.
Goldman Sachs analysts react to solid performance and outlook Mark Delaney Reaffirmed a Buy rating on the stock and raised the price target to $52 from $50. The analyst raised his EPS estimates for 2024, 2025 and 2026 to reflect improved margin expectations.
“We believe margins can remain resilient, driven by cost/efficiencies (including the balance of executing a $2 billion net cost reduction program this year) and relatively stable pricing,” Delaney said.
Analysts view GM’s progress in monetizing electric vehicles as positive. Notably, GM continues to expect its electric vehicle business to be variable profit positive in the second half of this year and achieve mid-single-digit EBIT margins in 2025.
Delaney further added that GM’s optimism is based on its current expectations for electric vehicle demand and production growth, and the company expects increasing benefits from battery production tax credits and fixed cost leverage.
Finally, analysts believe GM’s capital allocation will continue to be a driver. He expects the company to return higher levels of capital to shareholders after 2024, given the company’s aggressive buyback program aimed at reducing the number of shares outstanding to less than 1 billion shares.
Delaney ranks No. 256 among more than 8,700 analysts tracked by TipRanks. His rating success rate is 61% and his average return per rating is 17.5%. (look General Motors stock buyback on prompt ranking)
wing stop
Finally, there are chain restaurants wing stop (wing), operates and franchises in more than 2,200 locations worldwide.Baird analysts recently analyzed the total U.S. addressable market david tarantino Said that the company’s long-term goals in the domestic market have room for upside.
WING sees long-term potential to expand to more than 7,000 locations worldwide, including more than 4,000 restaurants in the United States. Space for 5,000 U.S. locations.
Additionally, BMO’s analysis suggests that TAM is expected to have the potential to rise over time, given the company’s continued growth in recent years in its most penetrated markets.
“All in all, a sizable domestic runway coupled with relatively open opportunities in international markets (only 288 locations after 2023) seems likely to support double-digit volume growth for many years to come,” Tarantino said, targeting WING stock. Price is $390.
Analysts estimate that Wingstop’s U.S. franchises generate unit cash returns of about 70% and appear poised for further growth this year, driven by rising average unit sales.
Tarantino believes WING deserves a substantial premium due to its solid near-term operating performance and attractive long-term growth prospects. Looking ahead, analysts are optimistic about the company’s ability to keep annual revenue growth in the mid-teens and its very capital-efficient growth model.
Tarantino ranks No. 264 among more than 8,700 analysts tracked by TipRanks. His rating success rate is 65%, with an average return per rating of 11.5%. (look Wingstop Stock Chart on prompt ranking)
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