In this article, we will discuss the 10 stocks whose price targets were recently raised by analysts. If you want to see more such stocks on the list, go directly to Analysts Are Increasing Price Targets of These 5 Stocks.
Especially technology stocks have been performing particularly well over the last few days. The gains were attributed to the release of earnings reports from Big Tech companies such as Alphabet, Microsoft, and Meta Platforms. On the other hand, First Republic Bank reported a 40% decrease in deposits in the first quarter, which renewed concerns about the broader banking sector and caused the major averages to fall on Tuesday.
As concerns about the banking sector continue to rise, stock markets may face a significant loss of buying power from a key source, reported Bloomberg. According to Scott Rubner, a market analyst at Goldman Sachs Group Inc., systematic money managers have recently invested over $170 billion in global shares, which has driven their exposure to the highest level since early 2022. Rubner warns that as their positioning approaches its peak, these managers are more likely to sell off their holdings in the coming weeks. Rubner has studied fund flows for two decades and believes that this group’s behavior could have a significant impact on the markets.
The Conference Board has reported that consumer confidence has declined more than expected in April. The consumer confidence index dropped to 101.3 from 104.0 in March, a larger decline than the predicted decrease to 104.0 from the previously reported 104.2. Meanwhile, the Commerce Department released a report indicating that new home sales in March unexpectedly surged to their highest level in a year. Given that the real gross domestic product (GDP) increased at an annual rate of 1.1 percent in Q1 of 2023, Fed’s high interest rate policy hasn’t pushed the economy into a recession. Economists have been predicting a US recession since the second half of 2022. We also observe the positive effects of relatively strong consumer spending in Q1 earnings of most publicly traded stocks.
After geopolitical tensions led to the loss of around $446 billion in mainland Chinese shares this month, a decline in Chinese stocks has paused as dip buyers enter the market, reported Bloomberg. The CSI 300 Index, a benchmark index of Chinese stocks, rose 0.3% in the afternoon session on April 26, having fallen by as much as 0.7% earlier. The MSCI gauge of Chinese shares also rose more than 1% after six days of losses, although it is still on track for its worst April performance since 2004. Additionally, the offshore yuan has rebounded from its nearly seven-week low against the US dollar. Key gauges are showing some signs of stability after several days of losses.
Beverage giants PepsiCo, Inc. (NASDAQ:PEP) and The Coca-Cola Company (NYSE:KO) along with retail giant Walmart Inc. (NYSE:WMT), recently came into the spotlight after receiving price-target hikes from analysts. PepsiCo, Inc. (NASDAQ:PEP) and The Coca-Cola Company (NYSE:KO) received the updated price targets following their latest quarterly performance. On the other hand, KeyBanc analyst Bradley Thomas increased its price target for Walmart Inc. (NYSE:WMT), citing accelerating growth from margin accretive businesses and cost and efficiency benefits from automation.
Meanwhile, healthcare stocks, including HCA Healthcare, Inc. (NYSE:HCA) and Biogen Inc. (NASDAQ:BIIB), were also on the list of 10 stocks receiving price-target hikes from analysts. Check out the remaining article to see the details of the aforesaid price actions.
Photo by Austin Distel on Unsplash
10. Synovus Financial Corp. (NYSE:SNV)
Number of Hedge Fund Holders: 35
On April 25, UBS analyst Brody Preston increased the price target on Synovus Financial Corp. (NYSE:SNV) from $31 to $33, while maintaining a Neutral rating on the stock. Preston updated the net interest income (NII) assumptions, resulting in 2024 estimates that are relatively unchanged. The analyst communicated this information to investors in a research note.
Also on April 24, Christopher Marinac, an analyst at Janney Montgomery Scott, raised Synovus Financial Corp. (NYSE:SNV) rating from Neutral to Buy and assigned a fair value estimate of $38. Marinac cited stable credit quality, manageable exposures in commercial real estate and commercial & industrial sectors, as well as strong deposit growth and core account openings of new commercial accounts in the last quarter. The analyst also expressed optimism about the momentum in Synovus’ business and believes it can continue.
9. Cadence Design Systems, Inc. (NASDAQ:CDNS)
Number of Hedge Fund Holders: 47
Bank of America analyst Vivek Arya increased the price target of Cadence Design Systems, Inc. (NASDAQ:CDNS) to $240 from $225 and maintained a Buy rating on the shares, following the company’s Q1 earnings report, which Arya described as a “slight beat.” Additionally, Cadence Design Systems, Inc. (NASDAQ:CDNS) provided a modest raise of its sales and EPS guidance for FY23. Arya acknowledged that the cyclical nature of hardware and intellectual property (IP) sales may create intra-quarter volatility, but he believes that the timing of revenue does not indicate a deceleration of the beneficial long-term secular trends that the firm sees as sustainable. Arya communicated this information to investors on April 25.
Cadence Design Systems, Inc. (NASDAQ: CDNS) has recently garnered attention due to its impressive Q4 results. The company’s revenue in Q4 2022 experienced a YoY increase of approximately 16.4% to $899.88 million, exceeding estimates by $15.65 million. Cadence Design Systems, Inc. (NASDAQ: CDNS) management has expressed confidence in the company’s growth prospects, citing AI, machine learning, 5G, and hyperscale computing as the key drivers of its secular growth.
Renaissance Investment made the following comment about Cadence Design Systems, Inc. (NASDAQ:CDNS) in its Q3 2022 investor letter:
“Cadence Design Systems, Inc. (NASDAQ:CDNS) was another contributor. The company reported strong operating results with broad-based strength from its semiconductor customers who are migrating to next-generation manufacturing nodes. We believe the multi-year investment cycle for semiconductor design spending should drive sustainable double-digit growth well into next year.”
8. O’Reilly Automotive, Inc. (NASDAQ:ORLY)
Number of Hedge Fund Holders: 47
On April 25, Evercore ISI increased its price target on O’Reilly Automotive, Inc. (NASDAQ:ORLY) to $950 from $945 while maintaining an Outperform rating on the shares. The move comes ahead of the company’s fiscal Q1 report, which is due to be released after the close on Wednesday. Despite the volatile Q1 weather, the analyst is optimistic and anticipates an above-trend quarter.
TimesSquare U.S. Mid Cap Growth Strategy made the following comment about O’Reilly Automotive, Inc. (NASDAQ:ORLY) in its Q4 2022 investor letter:
“Another boost came from O’Reilly Automotive, Inc. (NASDAQ:ORLY), a specialty retailer of after-market automotive parts and accessories, which scored a 20% gain. Revenues and earnings surpassed sell-side estimates on higher same store comparisons. Their do-it-for-me professional mechanic business generated double-digit growth while do-it-yourself increased sales by a modest amount.”
7. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 57
McDonald’s Corporation (NYSE:MCD) is a fast-food restaurant chain operator based in Chicago, Illinois, currently the largest chain operator globally. The company started with a single drive-in restaurant in San Bernardino, California, in 1955, and has since expanded to almost 40,000 locations in over 100 countries worldwide. McDonald’s serves more than 60 million customers every year.
On April 25, Morgan Stanley analyst John Glass increased the price target of McDonald’s Corporation (NYSE:MCD) from $309 to $315 and has maintained an Overweight rating on the shares. The company’s quarterly results had a “relatively clean” impact on the top and bottom line, with impressive sales across different markets. However, these results were against high expectations and an all-time high for the stock. Morgan Stanley believes that McDonald’s Corporation (NYSE:MCD) is a “core holding,” though valuation sensitivity may exist at current levels.
Like McDonald’s Corporation (NYSE:MCD), analysts have also increased its price target for PepsiCo, Inc. (NASDAQ:PEP), Walmart Inc. (NYSE:WMT), and Biogen Inc. (NASDAQ:BIIB).
6. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 58
Deutsche Bank analyst Steve Powers has increased the price target of The Coca-Cola Company (NYSE:KO) from $61 to $63 and maintains a Hold rating on the shares following the Q1 results. The analyst notes that the company is executing well in a vibrant market. Powers communicated this information to investors on April 25.
Rowan Street Capital mentioned The Coca-Cola Company (NYSE:KO) in its Q4 2022 investor letter. Here is what the firm has to say:
“Let’s take The Coca-Cola Company (NYSE:KO) for example. Its dividend yield is 2.8%, earnings are estimated to grow at only 3.6% rate per year over next 4 years, and its earnings multiple is currently at 24x (based on next years forecasted earnings). KO has an anemic growth, so we can argue that paying 24x earnings is not very attractive. Let’s assume that the multiple will stay constant over the next 3-5 years, thus our expected annual returns will be 2.8%+3.6% = 6.4% (that is below the current reported inflation rate and only slightly above the risk-free rate of 4%).”
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Disclosure: None. Analysts Are Increasing Price Targets of These 10 Stocks is originally published by Insider Monkey.
