In this article, we discuss the 10 stocks that analysts are raising price targets of.
Last week, Federal Reserve chair Jerome Powell told reporters in New York that the US economy was strengthening despite the spread of the Delta variant of COVID-19. Powell cited an improving job market to back his claim, although he admitted that a post-pandemic economic recovery might be slowing. However, he stressed that the high rates of inflation in the country were only transitory. A recent poll by the National Association for Business Economists in the US indicates that economists expect GDP growth to be 5.6%, down from 6.7% earlier this year.
The slowdown of the recovery is often tied to the spread of the Delta variant of the coronavirus. However, according to an economic forecast by professional services firm Deloitte, the Delta crisis will not have the same impact as the initial phase of the pandemic. Even though inflation is at 5.3% – the highest in nearly 13 years – the US Federal Reserve has hinted at reducing emergency support for the economy in the near future.
In this environment, investors should back stocks with sound fundamentals and strong catalysts for growth to shield themselves from possible uncertainty. Some of the stocks that analysts have raised price targets of recently include NVIDIA Corporation (NASDAQ:NVDA), Morgan Stanley (NYSE:MS), and Costco Wholesale Corporation (NASDAQ:COST), among others discussed in detail below. As the US works towards reducing inflation to around 2% and boost employment, these stocks should see robust growth in the coming months.
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Our Methodology
With this context in mind, here is our list of the 10 stocks that analysts are raising price targets of. All the firms listed below have had their price targets raised by an investment advisory this week.
The hedge sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey. The list is ranked according to the number of hedge funds having stakes in each firm.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Analysts are Raising Price Targets of These Stocks
10. Herc Holdings Inc. (NYSE:HRI)
Number of Hedge Fund Holders: 20
Herc Holdings Inc. (NYSE:HRI) is placed tenth on our list of 10 stocks that analysts are raising price targets of. The firm operates as an equipment rental supplier and is headquartered in Florida.
On September 28, investment advisory Barclays maintained an Overweight rating on Herc Holdings Inc. stock and raised the price target to $200 from $135, noting that there was further potential for upside in the share price.
Out of the hedge funds being tracked by Insider Monkey, Florida-based investment firm Icahn Capital LP is a leading shareholder in Herc Holdings Inc. with 4.4 million shares worth more than $503 million.
Just like NVIDIA Corporation, Morgan Stanley, and Costco Wholesale Corporation, Herc Holdings Inc. is one of the stocks that is attracting the attention of investors.
9. Verisk Analytics, Inc. (NASDAQ:VRSK)
Number of Hedge Fund Holders: 36
Verisk Analytics, Inc. (NASDAQ:VRSK) is ranked ninth on our list of 10 stocks that analysts are raising price targets of. The firm markets data analytics solutions and is headquartered in New Jersey.
On September 28, investment advisory RBC Capital maintained an Outperform rating on Verisk Analytics, Inc. stock and raised the price target to $235 from $203, noting that the positive intra-quarter data points for the firm bode well for growth.
At the end of the second quarter of 2021, 36 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in Verisk Analytics, Inc., up from 34 in the preceding quarter worth $1.5 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Verisk Analytics, Inc. (NASDAQ:VRSK) was one of them. Here is what the fund said:
“We ended our campaign in Verisk Analytics. Verisk Analytics is a data analytics provider to customers in insurance, energy markets and financial services. While the company’s core insurance business (~70% of revenue) remains on solid fundamental footing, we expect energy and financial services acquisitions made in recent years—an effort to diversify its business mix—to weigh on profit growth. We believe this will be further amplified as COVID cost savings reverse in 2021 and as the company invests in new products. With better growth opportunities in our pipeline, we exited our position.”
8. Motorola Solutions, Inc. (NYSE:MSI)
Number of Hedge Fund Holders: 37
Motorola Solutions, Inc. (NYSE:MSI) is an Illinois-based critical communications and analytics company. It is placed eighth on our list of 10 stocks that analysts are raising price targets of.
On September 28, investment advisory Barclays maintained an Overweight rating on Motorola Solutions, Inc. stock and raised the price target to $267 from $247. Tim Long, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 37 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Motorola Solutions, Inc., up from 29 in the previous quarter worth $1 billion.
In its Q1 2021 investor letter, Wedgewood Partners, an asset management firm, highlighted a few stocks and Motorola Solutions, Inc. (NYSE:MSI) was one of them. Here is what the fund said:
“Motorola Solutions saw a rebound in orders back to record levels in its North American Land Mobile Radio (LMR) business – where it enjoys a virtual monopoly – along with double-digit operating earnings growth in its software and services segment. COVID-19 posed some temporary challenges to Motorola’s selling organization; however, public service demand for more sophisticated and flexible emergency video and communications solutions stayed strong. The Company is capable of generating double-digit top-line growth as new federal spending should help expand state and local communication budgets. Despite a considerably better funding backdrop for Motorola’s largest customers, the stock trades at a multiple not too different compared to when things were not nearly as optimistic. As a result, Motorola continues to be a top holding (number 3) in our portfolio.”
7. Acceleron Pharma Inc. (NASDAQ:XLRN)
Number of Hedge Fund Holders: 43
Acceleron Pharma Inc. (NASDAQ:XLRN) is a Cambridge-based biopharmaceutical firm that develops therapies for the treatment of rare diseases. It is ranked seventh on our list of 10 stocks that analysts are raising price targets of.
On September 27, investment advisory RBC Capital maintained a Sector Perform rating on Acceleron Pharma Inc. stock and raised the price target to $179 from $113. Kennen MacKay, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 43 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Acceleron Pharma Inc., up from 31 the preceding quarter worth $1.6 billion.
NVIDIA Corporation, Morgan Stanley, and Costco Wholesale Corporation are some of the top stocks to buy now, just like Acceleron Pharma Inc..
In its Q2 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Acceleron Pharma Inc. (NASDAQ:XLRN) was one of them. Here is what the fund said:
“Acceleron Pharma Inc. is a biotechnology company focused on therapeutics for rare blood and lung disorders. Shares fell slightly as the company had limited impactful news flow during the quarter. Importantly, Acceleron issued positive updates on clinical trial data packages that highlighted the strength of its drug Luspatercept in the treatment of Beta Thalessemia (the BEYOND trial). More recently, the company highlighted its development strategies during a deep dive R&D day. Acceleron remains a top pick, and we have not changed our conviction.”
6. Etsy, Inc. (NASDAQ:ETSY)
Number of Hedge Fund Holders: 47
Etsy, Inc. (NASDAQ:ETSY) is placed sixth on our list of 10 stocks that analysts are raising price targets of. The firm owns and runs an online marketplace that connects buyers with sellers. It is headquartered in New York.
On September 28, investment advisory Loop Capital maintained a Buy rating on Etsy, Inc. stock and raised the price target to $245 from $220, noting that new acquisitions by the firm in Brazil and the UK were indicative of a growing global footprint.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Etsy, Inc. with 1.7 million shares worth more than $362 million.
NVIDIA Corporation, Morgan Stanley, and Costco Wholesale Corporation are some of the best stocks to buy now, alongside Etsy, Inc..
In its Q1 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Etsy, Inc. (NASDAQ:ETSY) was one of them. Here is what the fund said:
“Etsy continued to be a top contributor in the Portfolio during the first quarter. Etsy experienced record levels of demand in 2020. Throughout the beginning of this year, the business has continued to see accelerated growth trends. The company’s recently announced fourth quarter results provided numerous data points that highlight Etsy’s success in both broadening and deepening the relationship it has with buyers and sellers on its platform. In fact, Etsy now stands as the fourth largest e commerce site in the U.S. Repeat buyers have grown nearly 100% year-over-year, despite mask sales, which grew rapidly at the onset of the pandemic, shrinking to less than 5% of sales. We continue to believe Etsy remains in the early stages of growing out its platform. We remain confident in its ability to compound its value for shareholders at an attractive rate going forward.”
5. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 54
Costco Wholesale Corporation is ranked fifth on our list of 10 stocks that analysts are raising price targets of. The firm operates membership warehouses that sell branded and private-label products. It is headquartered in Washington.
On September 27, investment advisory Credit Suisse reiterated a Neutral rating on Costco Wholesale Corporation stock but raised the price target to $490 from $400. Robert Moskow, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 54 hedge funds in the database of Insider Monkey held stakes worth $4.3 billion in Costco Wholesale Corporation, down from 56 in the preceding quarter worth $4 billion.
In its Q1 2021 investor letter, Ensemble Capital, an asset management firm, highlighted a few stocks and Costco Wholesale Corporation (NASDAQ:COST) was one of them. Here is what the fund said:
“We saw these dynamics at play in the Fund. Some of the worst-performing stocks this quarter were among our best performers in Q1 2020. Another example was the market’s reaction to Costco Wholesale (1.5% weight in the Fund) during the quarter. From December 31, 2020 to March 8th, Costco shares declined 17% and dropped below their pre-pandemic high. The common rationale offered by sell-side analysts was that Costco would face difficult one-year “comps” (i.e. same-store sales, which compare sales from stores open for at least a year). Because so many consumers rushed to Costco ahead of shelter-in-place and subsequent quarantines, it will be harder for Costco to meaningfully beat those results when compared year-over-year. That may indeed be true, but we struggle to understand how Costco could be “less valuable” than it was a year earlier when it concurrently increased its membership base by over 7%, or 3.9 million members. With membership renewal rates around 90%, the vast majority of the new customers Costco brought in last year will be around for years to come.
Analysts also complained about Costco raising its already industry-leading minimum wage to $16/hour, with an average “effective” pay of $23-$24/hour when you include overtime and bonuses. Costco paying its employees “too much” has been a common gripe of Wall Street analysts for at least two decades. While the extra pay does indeed impact short-term profit margins, it also serves to make Costco more durable, as its flywheel (i.e. a virtuous value cycle) starts with happy employees. A 20-year chart of Costco stock price is evidence that this strategy works and we’re confident that it will continue to work.”
4. Okta, Inc. (NASDAQ:OKTA)
Number of Hedge Fund Holders: 57
Okta, Inc. (NASDAQ:OKTA) is a California-based firm that provides identity management platforms for enterprise clients. It is placed fourth on our list of 10 stocks that analysts are raising price targets of.
On September 28, investment advisory Morgan Stanley upgraded Okta, Inc. stock to Overweight from Equal Weight and raised the price target to $315 from $275, noting the improved demand environment and buy-in with developers as growth catalysts for the firm.
At the end of the second quarter of 2021, 57 hedge funds in the database of Insider Monkey held stakes worth $2 billion in Okta, Inc., up from 48 in the preceding quarter worth $1.6 billion.
3. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 59
MGM Resorts International (NYSE:MGM) is a Nevada-based firm that owns and operates casino, entertainment, and hotel resorts. It is ranked third on our list of 10 stocks that analysts are raising price targets of.
On September 28, investment advisory Bank of America maintained a Neutral rating on MGM Resorts International stock but raised the price target to $48 from $46, noting that a new acquisition would act as double-digit accretive for the free cash flow of the firm.
At the end of the second quarter of 2021, 59 hedge funds in the database of Insider Monkey held stakes worth $2.8 billion in MGM Resorts International, up from 57 in the preceding quarter worth $2.7 billion.
In its Q2 2021 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and MGM Resorts International (NYSE:MGM) was one of them. Here is what the fund said:
“We originally established our position in MGM during 2016. At that time, we believed its valuation did not reflect the improving fundamentals of the Las Vegas Strip, which was recovering from years of overbuilding. The market had also failed to recognize the quality of MGM’s assets and its potential to dramatically reduce a bloated cost structure. A long history of private market transaction activity further supported our view that the stock was materially undervalued. However, choppy execution by former management and a profit growth plan that failed to live up to expectations made this a bumpy (yet rewarding!) investment for Oakmark. Perhaps the biggest surprise relative to our initial thesis is the momentum and excitement surrounding the online sports gambling market. The company’s BetMGM platform has quickly staked the third-largest market position in online sports betting with plans to capture up to 25% of this $30+ billion market, which continues to grow rapidly. The exuberance surrounding digital gaming, coupled with expectations for a strong post-pandemic recovery in Las Vegas, has lifted the stock price to our estimate of intrinsic value. Therefore, we sold our shares in favor of more attractively priced alternatives.”
2. Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 69
Morgan Stanley is placed second on our list of 10 stocks that analysts are raising price targets of. The firm provides financial services and is headquartered in New York.
On September 28, investment advisory Berenberg downgraded Morgan Stanley stock to Hold from Buy but raised the price target to $95 from $91, noting that the shares for the firm now seemed fairly valued.
At the end of the second quarter of 2021, 69 hedge funds in the database of Insider Monkey held stakes worth $5.3 billion in Morgan Stanley, down from 79 in the preceding quarter worth $5.2 billion.
In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Morgan Stanley (NYSE:MS) was one of them. Here is what the fund said:
“Top three contributor Morgan Stanley, a leading global financial services company, came into the portfolio in Q4 as a result of its purchase of E*TRADE. E*TRADE is a great fit on Morgan Stanley’s wealth management platform and provides a considerable amount of non-interest-bearing deposit funding. James Gorman, chairman and CEO, has steadily de-risked Morgan Stanley’s business by adding less volatile fee streams and deemphasizing the risk-obtuse culture of prior management. We believe the market will come to appreciate this mix shift over time.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 86
NVIDIA Corporation is ranked first on our list of 10 stocks that analysts are raising price targets of. The company operates as a visual computing firm and is headquartered in California.
On September 28, investment advisory Susquehanna maintained a Positive rating on NVIDIA Corporation stock and raised the price target to $250 from $220. Christopher Rolland, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $9 billion in NVIDIA Corporation, up from 80 the preceding quarter worth $6 billion.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”
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This article is originally published at Insider Monkey.
