Top Wall Street analysts like Oracle & Domino’s in 2023

0
96
Here are Thursday's biggest analyst calls: Apple, Amazon, Tesla, Chipotle, Capital One, United and more

Domino’s will launch 800 custom-branded 2023 Chevy Bolt electric vehicles at locations across the United States in the coming months.

dominoes

Despite encouraging signs that the economy is headed our way, the lingering fear of a 2023 recession has not left the market. Amidst this uncertainty, a longer-term outlook will help investors determine the best way to construct their portfolios. To help the process, here are five stocks chosen by Wall Street’s top analysts, according to TipRanks, a service that ranks analysts based on their track records.

Dentsply Sirona

In previous years, including 2022, DENTSPLY SIRONA (ROENTGEN), a manufacturer of professional dental products and technologies, has been managed by a number of teams that have delivered sub-optimal operational executions. This contributed greatly to the share’s significant fall in value this year.

related investment news

CNBC Pro

Still, Barrington Research analyst Michael Petusky remains bullish on DENTSPLY. “Although 2022 was a semi-disaster both operationally and for shareholders, we believe several items in FY23 (and beyond) are likely to be more favorable (or at least less terrible) than FY22 including FX headwinds, challenges in supply chain, China and top-line comparisons (which will be much easier in FY/23 than in FY/22),” the analyst noted.

At first glance, DENTSPLY’s balance sheet looks heavily indebted with cash and cash equivalents of $418 million in the third quarter on total debt of $1.98 billion. However, the company has reduced its debt sequentially from $2.03 billion. Petusky expects further debt reduction to about 1.4 billion over the next 12 months. (See DENTSPLY SIRONA dividend date and history on TipRanks)

Based on his observations, the analyst reiterated a Buy rating on XRAY stock with a price target of $40.

Importantly, Petusky ranks 871st among more than 8,000 analysts tracked on TipRanks. Over the past year, 51% of his reviews have been successful, and each review has generated an average return of 7.5%.

oracle

Next on our list is IT giant Oracle (ORCL), which reported strong results for the second quarter of fiscal 2023 last week. The company’s solid performance against a difficult economic backdrop, particularly for the technology sector, has impressed several Wall Street analysts. Among the Oracle bulls was Monness Crespi Hardt analyst Brian White, who reiterated his buy rating and price target of $113.

“We believe Oracle offers investors a high quality value play with an opportunity to participate in an attractive cloud transformation and participate in the digital modernization initiatives emerging in healthcare,” White said. (See Oracle Financial Statements on TipRanks)

The analyst is also encouraged by the long-term financial goals that Oracle’s management set in October. It aims to grow organic sales to $65 billion by FY26 with an operating margin of 45% while maintaining more than 10% annualized earnings per share growth.

Interestingly, White has been mostly cautious on his stock valuations since late November. Oracle is the only company enjoying its optimistic belief during this period.

Ranked 703rd among more than 8,000 analysts, White has a 54% success rate. Additionally, each of his reviews has generated an average return of 8.5%.

Domino’s Pizza

According to BTIG analyst Peter Saleh, owner and operator of pizza chain Domino’s Pizza (DPZ) “is a long-term market share winner in the pizza category due to the significant competitive advantages it has created in digital ordering, national marketing and value.” The analyst believes these efforts will drive retail sales and market share over the past years have increased significantly.

Saleh expects same-store sales comparisons to ease in the first half of 2023, which will be a key catalyst for sales growth. Additionally, sales performance is expected to improve organically in 2023, driven by an increase in driver supply. (See Domino’s Pizza Blogger Opinions and Opinions on TipRanks)

Also, Saleh is considering higher prices for Domino’s $7.99 take-along next year. This will help the company “recapture the $2.00 gap versus mix and match” and increase franchisee margins.

Saleh, who was previously wary of Domino’s, upgraded the stock to buy from hold with a price target of $460. A good reason to consider the analyst’s beliefs is his 370th position out of more than 8,000 analysts followed on TipRanks. Additionally, 63% of its reviews were profitable, generating an average return of 11.8%.

Lululemon

Canadian sportswear retailer Lululemon (LULU) is still suffering from a sell-off after weak forecasts for the holiday quarter. Increasing competition and flagging end markets are making investors nervous about the stock.

Nonetheless, Guggenheim analyst Robert Drbul maintained his bullish stance with a buy rating and a price target of $475. “We remain a BUY as we believe LULU will benefit from favorable secular (health, wellness, leisure and fitness, including at-home) tailwinds. We also favor the limited seasonality of the company’s product offering, virtually no wholesale exposure, and a robust e-commerce business (all mitigating inventory risk),” the analyst explained.

According to Drbul, the growth path in Lululemon’s digital, male and international collection is also solid. The company is also on track to quadruple its international business by the end of 2022, ensuring continued revenue growth and “structurally higher” operating margins in the coming years. (See Lululemon Athletica Stock Investors’ Opinion on TipRanks)

However, given Drbul’s position among more than 8,000 analysts on TipRanks, it makes sense for investors to follow his opinions. Ranked 402nd, 63% of the analyst’s reviews were profitable. Each of his reviews has yielded an average return of 8.3%.

Nike

Manufacturer of athletic footwear, apparel, accessories and equipment Nike (FROM) remains the “Best Idea” for 2023 according to Robert Drbul. The company benefited from unexpected strength in consumer spending despite supply chain issues, inflation and demand concerns. (See Nike Stock Chart and Stock Technical Analysis on TipRanks)

Drbul acknowledged that fiscal 2023 has several hangovers, including supply-demand imbalances and headwinds in the Chinese market. However, he is bullish on the “structural benefits of its brand value, its massive demand generation war chest, a data-heavy DTC and digital business, and managerial talent to realign its business and make progress on its long-term financial goals in FY24.”

The analyst is confident that the Nike brand will maintain its dominant market share over the long term, which he expects to grow significantly with the expansion of the digital segment, the flow of new product innovations and investment in growth-enhancing efforts, while the competition embraces cost-saving measures.

The analyst reiterated a Buy rating for NKE stock with a price target of $135.