Investors were taken aback by a higher-than-anticipated consumer inflation reading last week, prompting a cautious reaction in the stock market. Nonetheless, seasoned Wall Street analysts urge investors to maintain a long-term perspective in their pursuit of lucrative buying opportunities. The financial elite of the Street are singling out promising stocks with a keen eye on their future growth potential. According to TipRanks, a platform that evaluates analysts based on their historical performance, three stocks hold a special place in the hearts of top professionals.
Leading the pack is e-commerce and cloud computing behemoth Amazon (AMZN). In anticipation of the company’s quarterly results, multiple analysts have expressed their unwavering bullish sentiments towards the stock. Analyst James Lee from Mizuho reaffirmed a buy rating on AMZN with a price target of $230. His optimism centers around the expected acceleration in the revenue of Amazon’s cloud computing arm, Amazon Web Services (AWS), by 2024. Lee identified key signs of an escalating sales cycle based on Mizuho’s latest AWS customer survey with a prominent channel partner. The survey suggests a hastened migration of workloads to the cloud, with AWS clients terminating their on-premise data center contracts at a quicker pace. Additionally, budget trends are on the rise, as the channel partner estimated a 20% year-over-year AWS spending growth, surpassing the 15% consensus. Despite being ranked No. 428 out of over 8,700 analysts monitored by TipRanks, Lee’s ratings boast a 59% success rate, with each yielding an average return of 11.5%.
Acushnet Holdings (GOLF)
Next on the list is Acushnet Holdings (GOLF), a manufacturer of golf products that recorded $2.4 billion in net sales in 2023, reflecting a 4.9% year-over-year growth. Tigress Financial analyst Ivan Feinseth maintained a buy rating on GOLF stock and raised the price target to $74 from $68. Feinseth foresees the company benefiting from the surge in new players entering the sport, the uptick in rounds played, and the introduction of innovative products across its flagship brands. The golf industry has observed a consistent rise in the number of new golfers over the past six years, coupled with a significant increase in total rounds played from 800 million in 2019 to 950 million in 2023. Highlighting the robust brand equity of Acushnet, driven by elite product lines like FootJoy and Titleist, Feinseth emphasized the company’s premium market valuation. Acushnet continues to enhance shareholder returns through dividend hikes and share repurchases, evident in the recent 10.3% quarterly dividend increase and a $300 million share repurchase authorization. Feinseth, ranked 243rd among more than 8,700 analysts on TipRanks, boasts a 61% success rate, with each rating delivering an average return of 12.4%.
BJ’s Wholesale Club (BJ)
Last but not least, BJ’s Wholesale Club (BJ) finds its place in the limelight, being a membership-only warehouse chain. Goldman Sachs analyst Kate McShane upgraded BJ stock to buy from hold and raised the price target to $87 from $81. McShane anticipates a resurgence in market share and a robust revenue growth trajectory driven by positive industry trends. With 86% of merchandise sales attributed to the grocery category in fiscal 2023, BJ is positioned to benefit from the return of volume growth in groceries and increased customer engagement in general merchandise. McShane expects the company to leverage initiatives to freshen its product assortment, amplify quality, enhance presentation, and time promotions effectively in the general merchandise category. Furthermore, a potential uptick in membership fees could further boost BJ’s revenue outlook, given its membership base of over 7 million accounts and an impressive 90% renewal rate in fiscal 2023. Despite her rank at No. 959 among more than 8,700 analysts on TipRanks, McShane boasts a 62% success rate, with an average return of 5.1% per rating.
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