3 "Strong Buy" Trending Stocks That Are Buzzing Right Now
Is the market’s rally reaching a standstill? Doubts about valuations and Federal Reserve Chair Jerome Powell’s warning regarding economic risks weighed on stocks, with the S&P 500 slipping for the Read More... The post 3 "Strong Buy" Trending Stocks That Are Buzzing Right Now appeared first on TipRanks Financial Blog.
Is the market’s rally reaching a standstill? Doubts about valuations and Federal Reserve Chair Jerome Powell’s warning regarding economic risks weighed on stocks, with the S&P 500 slipping for the third day in a row today. Yet, the index still remains over 25% higher than its March 23 low.
Investors are uncertain just where the stock market is headed. Essentially, there are two competing opinions right now. One says that we’re just in a bear market rally, and that the worst is yet to come. The other thesis states that the current rally is real, and will mature into a new bull cycle as the economy restarts in the second half.
Nonetheless, investors are constantly looking for stocks that will hold up regardless of economic uncertainty. A good starting point is recent analyst activity. With this in mind, we used TipRanks' database to pinpoint 3 trending stocks which were reassessed by those in the know.
Uber Technologies (UBER)
We’ll start with Uber. The popular ride sharing app got a boost last week when it reported better than expected Q1 earnings – and an increase in ride volume after hitting bottom in April.
Uber has also made a move to acquire competitor Grubhub. The potential deal values Grubhub at $6.9 billion, and would add 24 million active users to Uber Eats, giving UBER a 55% market share.
Youssef Squali, 5-star analyst with SunTrust Robinson, covers UBER, and he is impressed by the acquisition move. He writes of the possibility, “We believe consolidation would improve the profit pool for the industry, and complementary strengths in Grubhub's restaurant supply and Uber's delivery network are obvious and compelling.”
Squali’s Buy rating on UBER is supported by his $50 price target, showing his confidence in a 51% upside potential here. (To watch Squali’s track record, )
Overall, the analyst corps likes UBER stock almost as much as Squali does. UBER’s 30 reviews break down to an impressive 26 Buys, and just 3 Holds and 1 Sell, making the analyst consensus rating a Strong Buy. Shares are selling for $31.79, and the average price target of $39.59 suggests the stock has room for a 25% upside potential in the coming year. (See Uber stock analysis at TipRanks)
Peloton Interactive (PTON)
Next up is Peloton. The exercise equipment manufacturer launched seven years ago, using a Kickstarter crowdfunding campaign to help raise capital. More recently, Peloton gained a bit of notoriety with a viral ad campaign over Christmas. That ad campaign came just two months after the company’s IPO, which saw PTON raise $1.16 billion.
PTON’s share performance since going public gives plenty of reason for confidence. Shares are up 75% since the launch, and even the current bear market did not derail PTON’s growth for long. The stock did lose 28% in the initial market slide, but has showed a strong rebound and is now trading 66% above its February levels.
One reason, paradoxically, may be the lockdowns. As a manufacturer of home-based exercise equipment, Peloton is well positioned to sell to people locked in quarantine but who still want or need to stay fit. The high-end products are marketing toward white collar professionals, the demographic most likely to have made a successful transition into working from home, and so less likely to have suffered deep cuts in income.
Stifel’s 5-star analyst Scott Devitt likes what he sees in Peloton. Acknowledging that the current economic climate is unique, he says that PTON is uniquely suited to thrive: “We continue to view Peloton as a direct beneficiary of the current environment and the accelerated adoption of in-home fitness. The company is working to expedite shipments to reduce delivery windows and is investing in a new manufacturing facility that should be available in time to support fulfillment during the holiday season.”
Devitt raised his price target on PTON stock to $55, implying an upside potential of 21% to back his Buy rating. (To watch Devitt’s track record, )
All in all, Wall Street generally sees a positive outlook for PTON shares. The stock has a Strong Buy analyst consensus rating, based on 20 Buys, 1 Hold, and 1 Sell. The average price target is $45.90, which implies a modest 4% upside from the current trading price of $45.17. (See Peloton stock analysis at TipRanks)
Nvidia Corporation (NVDA)
The last stock on our list is Nvidia, a mainstay of the semiconductor chip industry. Nvidia brought in $10.92 billion in fiscal year 2020, which ended in January. The company found support in its market-leading reputation as a supplier of high-end graphics processing units (GPUs). These key components in professional and gaming computing systems see consistently high demand, and Nvidia’s expertise in the niche makes its products doubly valuable. Nvidia has firm customer bases among professional designers, data centers, and gamers, and saw earnings grow sequentially and beat expectations from 1Q19 through 1Q20.
The company’s most recent quarterly results, for its fiscal Q4 2020, showed $3.11 billion on the top line, and $1.54 in EPS. Looking ahead, Nvidia is expected to report $1.36 in EPS in fiscal 2021 Q1. This is in-line with previous forecasts for Q4, and will also represent a 102% year-over-year increase.
Covering NVDA stock for Rosenblatt Securities, 5-star analyst Hans Mosesmann likes the forward prospects for the company, writing, “We expect the April quarter to be driven by a more than normal seasonal decline in gaming and a seasonal decline in the OEM segment offset by strong q/q growth in the data center segment… For the July quarter, we see the bias is toward slight upside to our sales estimate of growth of low- to mid-single digits on the heels of data center strength…” As the bottom line, Mosesmann says, “[We] continue to believe Nvidia is setting the AI compute pace and is performing well in the discrete notebook GPU market.”
In line with his optimism, the analyst puts a Buy rating on NVDA shares. His $340 price target suggests a 10% upside over the next 12 months. (To watch Mosesmann’s track record, )
Wall Street agrees that Nvidia is a Buy proposition, but appears to be more cautious than Mosesmann. The Strong Buy consensus view on the stock is based on 20 ratings, including no fewer than 17 Buys, along with 2 Holds and 1 Sell. The average price target is conservative, and at $318.35 implies just 2.3% growth potential from the current share price of $311.20. (See Nvidia stock analysis on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
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