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.
U.S. stock index futures rose on June 1 after the House of Representatives passed a bill to suspend the nation’s debt ceiling. Investors eagerly awaited labor market data for further assessment. The bill, aiming to suspend the $31.4 trillion debt ceiling, garnered bipartisan support and now moves to the Senate for enactment before a Monday deadline, crucial to prevent a government funding shortfall. European equities rebounded, driven by improved market sentiment, with media, banking, and mining sectors leading gains while real estate lagged. Bloomberg reported a larger-than-expected drop in underlying inflation in the eurozone, but it’s unlikely to deter the European Central Bank from pursuing interest rate increases.
According to a report from Bloomberg, Federal Reserve officials are conveying their plans to maintain the current interest rates throughout the month of June. However, they also leave the door open for future rate hikes. This guidance is being provided to influence market expectations and prepare for an upcoming crucial employment report. Governor Philip Jefferson, known for his centrist stance and nominated for the vice chair position, recently said that the decision to hold rates steady allows policymakers to assess the available data carefully. It also provides flexibility for potential tightening measures if warranted. Governor Jefferson’s alignment with Chair Jerome Powell’s approach further solidifies the message of a patient and data-driven approach to monetary policy. The Fed’s communication strategy aims to provide transparency and stability in the face of ongoing economic uncertainties.
A recent report from Bloomberg highlights a discernible shift in global investor sentiment, with dissatisfaction mounting over China’s stock market performance. As a result, other major markets in Asia are increasingly catching the attention of investors as more appealing alternatives. This divergence in performance has become more pronounced in recent times, with a prominent Chinese stock index experiencing a significant 20% decline from its recent peak. In contrast, South Korea’s Kospi index has been showing promising signs of a bull market, while stock benchmarks in India have been steadily approaching record highs. Moreover, Japanese stocks reached an impressive three-decade high earlier in May, further highlighting the attractiveness of Asian markets beyond China. Taiwan, too, continues to outperform many other global stock markets. The relative strength and resilience of these markets compared to China’s equity market have sparked interest among global investors seeking alternative investment opportunities.
This shift in sentiment suggests a growing recognition of the potential for higher returns and more favorable risk-reward profiles in these Asian markets. The economic growth and stability exhibited by countries such as South Korea, India, Japan, and Taiwan have contributed to their appeal. As investors reassess their strategies and diversify their portfolios, these Asian markets emerge as attractive destinations for capital allocation. The ongoing performance disparity between China and other Asian markets serves as a reminder that regional dynamics and individual market characteristics play a significant role in investment decisions. It also underscores the need for a nuanced approach to global investing, taking into account the unique opportunities and risks presented by different markets within the broader Asian region.
Meanwhile, several companies, including Eli Lilly and Company (NYSE:LLY), AutoZone, Inc. (NYSE:AZO) and Lennar Corporation (NYSE:LEN), 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.
10. Lowe’s Companies, Inc. (NYSE:LOW)
Upside Potential: 3.94%
Lowe’s Companies, Inc. (NYSE:LOW) operates home improvement and hardware retail stores in the United States. In April, Bank of America (BofA) included the stock on its ‘US 1 List’, a compilation of the firm’s top investment ideas.
On May 24, DA Davidson increased the price target for Lowe’s Companies, Inc. (NYSE:LOW) from $228 to $237 while maintaining a Buy rating on the shares. The analyst acknowledges that the home center industry is currently facing challenges, as home price appreciation, which has traditionally been a significant macro metric, has declined year over year for three consecutive months. However, DA Davidson highlights that Lowe’s Companies, Inc. (NYSE:LOW) is consistently narrowing the gap with Home Depot (HD) across key metrics. As a result, Lowe’s Companies, Inc. (NYSE:LOW) stock price has outperformed for the sixth consecutive year.
09. Microsoft Corporation (NASDAQ:MSFT)
Upside Potential: 4.61%
Mizuho analyst Gregg Moskowitz has increased the firm’s price target for Microsoft Corporation (NASDAQ:MSFT) to $340 from $325 while maintaining a Buy rating on the shares. According to the analyst’s research note on May 24, the content presented on day one of the Microsoft Corporation (NASDAQ:MSFT) Build conference heavily focused on artificial intelligence (AI). The analyst is optimistic about Microsoft Corporation (NASDAQ:MSFT) continued innovation and expresses confidence in the company’s growth opportunities in the medium term and beyond. Mizuho believes these opportunities, including significant monetization of generative AI, are greater than many currently recognize.
Ariel Global Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:
“Enterprise software provider, Microsoft Corporation (NASDAQ:MSFT) also traded higher in the period alongside the investor enthusiasm for Artificial Intelligence. Microsoft is well positioned as this new technology advances given its large investment in Open AI, the parent company of ChatGPT. Looking ahead, we continue to like Microsoft’s solid fundamentals, competitive positioning and long-term business outlook. We anchor on the company driving value creation by capitalizing on a broad and deep set of opportunities, most notably within Azure, its hybrid cloud infrastructure. The platform continues to demonstrate share gains and strong multi-year purchase intent as enterprises transition to cloud based platforms. At current trading levels, we believe Microsoft’s risk/reward is skewed to the upside.”
08. Intuit Inc. (NASDAQ:INTU)
Upside Potential: 4.97%
Intuit Inc. (NASDAQ:INTU) is a software company headquartered in Mountain View, California. The firm provides products to enable firms to manage their account, run payroll, and conduct other operations. The company’s primary SaaS products include QuickBooks Online, providing cloud-based accounting and financial management software for small businesses, and QuickBooks Self-Employed, designed for freelancers and independent contractors. Others are TurboTax Online and TurboTax Live, providing online tax preparation and e-filing services for individuals and small businesses.
BMO Capital has increased the price target for Intuit Inc. (NASDAQ:INTU) from $462 to $485 while maintaining an Outperform rating on the shares. On May 24, the analyst noted that the company’s Consumer segment tax growth is tracking approximately four points lower than expected. The lower growth is primarily attributed to unexpected share loss in the DIY (Do-It-Yourself) channel, assumed from exiting stimulus filers. Despite this, BMO acknowledges the strength of Intuit Inc. (NASDAQ:INTU) small business franchise, the ongoing improvement in Mailchimp, and the product development in B2B payments. These factors are expected to serve as supportive catalysts leading into an important fiscal Q4 for the company.
07. Builders FirstSource, Inc. (NYSE:BLDR)
Upside Potential: 6.67%
Builders FirstSource, Inc. (NYSE:BLDR) was founded in 1998 and is based in Dallas, Texas. The company manufactures and supplies building materials, engineered components, and construction services to professional homebuilders, sub-contractors, and customers in the United States. The company has a 3-year average revenue growth rate of 46.15%. For fiscal 2022, the company grew its revenue by 14.24% year over year.
On May 24, Barclays analyst Matthew Bouley increased the firm’s price target for Builders FirstSource, Inc. (NYSE:BLDR) from $150 to $160 while maintaining an Overweight rating on the shares. According to the analyst’s research note, the investment community is not fully appreciating the positive impact of low home inventory on new construction and its implications for builders and building products. Although the housing market is facing challenges, new construction is showing improvement and is in a much stronger position. While Barclays maintains a cautious stance on building products overall, it is more positive for companies that are well-positioned to benefit from the growth in new residential construction. As a result, Corning has been upgraded to Overweight, while SiteOne Landscape Supply has been downgraded to Underweight. The firm has also raised earnings estimates and price targets for homebuilders and residential distributors.
Bonhoeffer Capital Management made the following comment about Builders FirstSource, Inc. (NYSE:BLDR) in its Q4 2022 investor letter:
“One of our holdings in the distribution theme is Builders FirstSource, Inc. (NYSE:BLDR), a clustered building products distribution firm. BFS’s growth model is through same-store sales growth (6% per year based upon increased home sales of 1.5 million units from 1.0 million units) and synergistic M&A (4% per year). These are enhanced by opportunistic operational leverage from scale and share repurchases (5% annual growth). Over the past five years, BFS’s net income margins are up from 2% to 13%, with a 3x increase in revenues. These factors should lead to about a 16% EPS growth going forward. BFS has had 82% EPS growth over the past five years. Since August 2021, BFS has repurchased 34% of its common stock.
The real driver is the pace at which new home and other construction rebounds from the interest rate shock of the last 18 months. We have used analyst estimates for revenue and free cash flow/earnings for the next two years and longer-term growth assumptions described above. We have also assumed 50% of free cash flow will be used for repurchases (and this may be conservative based upon the past 18 months’ repurchase levels).…” (Click here to read the full text)
06. Netflix, Inc. (NASDAQ:NFLX)
Upside Potential: 8.43%
Netflix, Inc. (NASDAQ:NFLX) has faced challenges due to increased competition and difficulties sustaining subscription growth. However, the company is implementing strategies to drive growth, which has led to a 21% increase in its stock price in 2023 as of May 26. Recent reports indicate that Netflix, Inc. (NASDAQ:NFLX) has initiated efforts to address password sharing within the United States.
Oppenheimer analyst Jason Helfstein has increased the price target for Netflix, Inc. (NASDAQ:NFLX) to $450 from $415 while maintaining an Outperform rating. This update comes in light of the launch of Paid Sharing, a feature that allows additional household streaming for $7.99. Before the announcement on May 30, Oppenheimer surveyed 1,800 U.S. Netflix, Inc. (NASDAQ:NFLX) consumers, indicating a strong willingness to pay for “remote” users. The survey revealed that 45% of respondents were willing to pay for additional users, while 70% showed a preference for a $6.99 ad-tier plan. Based on the survey results, Oppenheimer suggests that a significant portion of these users may opt for the ad-supported plan as the pricing for additional users exceeds that of the ad-tier plan.
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Disclosure: None. Analysts Are Increasing Price Targets of These 10 Stocks is originally published on Insider Monkey.
