The Airbnb logo is seen on a small mini pyramid under the glass pyramid of the Louvre museum in Paris, France, March 12, 2019.
Carlos Plates | Reuters
Economic data and earnings reports have been dictating the pace of the market as investors look for clues about what the Federal Reserve may do next.
July’s payrolls report was stronger than expected, rising by 528,000, suggesting the labor market still has plenty of steam. In turn, traders speculated that the Fed will likely maintain its tough stance on interest rates, anticipating more odds for a 0.75 percentage point hike in September.
As tempting as it is to follow stocks minute by minute, investors would do well to choose their names with a long-term perspective in mind.
To that end, here are five stocks highlighted by top Wall Street professionals, according to TipRanks, a platform that ranks analysts based on their performance.
ArcBest
ArcBest (ARCB) is an actor in the transport sector. Its subsidiaries operate in the less than truckload (LTL) sector. Despite ArcBest’s exposure to macroeconomic challenges and a rampant supply chain, the company has achieved remarkable performance, as evidenced by its recent quarterly report.
ArcBest’s second-quarter results beat expectations, driven in part by contributions from its truck brokerage business, MoLo. Other highlights of the quarter were the impressive results of the core LTL business, which grew in revenue and tonnage.
Cowen analyst Jason Seidl he was encouraged by the firm’s strength while noting “some softness in 2H loading despite a stronger-than-expected July.” (I will see ArcBest Stock Investor Sentiments on TipRanks)
Another concern Seidl noted was the weak spot market environment, which led to a sequential decline in ArcBest’s asset-light business. The spot market is where international commodities are exchanged for immediate payment and delivery.
However, Seidl noted that the acquisition of Molo has increased ArcBest’s contract business mix. This is likely to cushion the business somewhat against volatility in the spot market.
Short-term headwinds prompted Seidl to cut his price target to $127 from $133. Overall, however, the analyst was bullish on ArcBest’s long-term prospects and reiterated a buy rating on the stock.
Seidl is ranked fourth out of nearly 8,000 analysts rated on TipRanks. Additionally, their ratings have resulted in positive returns 60% of the time, earning an average return of 26.6% per rating.
Airbnb
The operator of the online hosting market Airbnb (ABNB) has been affected by the ongoing macroeconomic clashes in the US and the delayed recovery of travel in Asia. Also, investors seemed unhappy with the company, despite its record bookings.
However, the company’s second-quarter results reflected a strong increase in travel as economies reopened, along with domestic and international skies. (I will see Airbnb stock chart on TipRanks)
analyst Brian Fitzgerald of Wells Fargo was impressed by Airbnb’s disciplined operating practices and efficient execution amid various challenges. The analyst believes that Airbnb has a first-mover advantage in a relatively new and upcoming segment of the hospitality industry. He believes that a post-earnings pullback in stock prices can be a great opportunity to add to stock positions for healthy long-term returns.
Maintaining a buy rating on the company, Fitzgerald sees the company’s third-quarter outlook as “a reflection of consumer booking patterns/windows amid strong reopening demand rather than a reflection of specific growth constraints in the company or the category”.
However, from a near-term perspective, Fitzgerald cut his previous price target to $185 from $250.
Fitzgerald is ranked #151 out of nearly 8,000 analysts in the TipRanks database. Also, 57% of their qualifications have been profitable, generating an 18.2% average profitability per qualification.
Another of Brian Fitzgerald’s favorite options is social media Pinterest (PINS). The company has been buffeted by intense competition, inflationary setbacks and other headwinds that have shaken investor confidence. However, its latest quarterly results were better than feared.
Fitzgerald called the “constructive commentary” from management, which highlighted the return of monthly active users (MAUs) to normal seasonal growth patterns in the second half of 2022 and a slowdown in investments in 2023, which led to margin expansion.
The analyst was also optimistic that the prestigious activist investor Elliott Management was backing Pinterest’s business strategy. (I will see Pinterest Blogger Opinions and Feelings on TipRanks)
However, short-term operating expenses are expected to be high this year. In addition, other headwinds are expected to keep earnings for the year under pressure. Those forecasts led Fitzgerald to cut the price target to $34 from $37.
However, the analyst remained bullish on the long-term outlook and reiterated a buy rating on PINS. “While we believe some investors remain skeptical of PINS’ Idea Pins content strategy, we see an emerging consumption/content creation flywheel and think PINS is taking the right steps to drive engagement while continuing refining relevance and shopping tools,” he said.
Cirrus logic
Most chipmakers with exposure to the mobile phone market have had plenty of challenges this year. Cirrus Logic (CROSS), which offers integrated circuits optimized for a range of audio, industrial and power-related applications, is among these companies. (I will see Cirrus Logic Risk Factors on TipRanks)
Cirrus has recently posted strong quarterly results. Following print, Susquehanna analyst Christopher Rolland weighed in on the company’s future prospects.
Rolland highlighted Cirrus’ strong documented relationship with its largest customer, Apple. “We believe their relationship with Apple has never been better, and the strong outlook provided this quarter only reaffirms our belief,” the analyst said.
Rolland also noted the company’s ongoing commitment to a strong share repurchase program. Cirrus announced a $500 million share buyback program, in addition to $136.1 million remaining from a previous buyback authorization in 2021.
“With nearly $7 billion in net cash, we expect Cirrus to accelerate these purchases given the strong outlook,” Rolland said, reiterating his buy rating and $110 price target on the stock.
Christopher Rolland is also one of the five-star rated Wall Street analysts on TipRanks. It ranks 6th among nearly 8,000 analysts tracked on the platform. Additionally, 73% of their ratings have been successful, with each rating yielding an average return of 25.4%.
Monolithic power
Monolithic power (MPWR) makes energy solutions for a range of industries, including telecommunications and cloud computing, but has suffered from declining demand in the consumer end market. However, the company recently offered upbeat results and positive feedback.
Needham analyst Quinn Bolton noted Monolithic Power’s increase in “new greenfield design wins and market share gains,” which reinforced its belief that the company is the “fastest secular grower in the analog segment.” (I will see Date and History of the Monolithic Power Dividend on TipRanks)
Monolithic Power’s level of expertise in proprietary BCD process technology and applications has driven the company to achieve faster growth than its peers in the analog/mixed-signal domain. “We believe MPS will continue to grow faster than the analog market driven by market share gains, new product ramp/design gains and co-development projects with top-tier customers,” Bolton said.
Based on his analysis of Monolithic Power, Quinn Bolton reiterated a buy rating on the stock and raised his price target to $550 from $500.
Bolton is #1 in the large database of about 8,000 analysts tracked at TipRanks. In total, 74% of their ratings have been profitable, with 45.1% average returns per rating.
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