Higher-than-expected consumer inflation spooked investors last week, but investors may want to adopt a long-term mindset as they look for buying opportunities.
Top Wall Street analysts name their favorite stocks with a focus on their long-term growth prospects.
To that end, here are three stocks that are favored by the Street's top pros, according to TipRanks, a platform that ranks analysts based on past performance.
Amazon
This week's top pick is the e-commerce and cloud computing giant Amazon (AMZN). Ahead of the company's quarterly earnings release, several analysts have reiterated their bullish views on the stock.
Mizuho analyst James Lee reiterated his Buy rating on AMZN shares with a price target of $230. The analyst is increasingly optimistic that revenue at Amazon's cloud computing unit, Amazon Web Services (AWS), will increase in 2024. He stated that AMZN remains his company's first choice.
Based on Mizuho's recently completed AWS quarterly customer survey with a leading channel partner, the analyst made some key observations. He said there are signs the sales cycle is accelerating as AWS customers seek more executive business center meetings.
Additionally, the survey found that AWS customers are terminating their on-premise data center contracts faster than previously thought, indicating an accelerated migration of workloads to the cloud.
“We are seeing accelerating budget trends as the channel partner that commissioned the survey estimated AWS spending growth of 20% year-over-year, consistent with our forecast and above consensus at 15%,” Lee noted.
Lee is ranked #428 among more than 8,700 analysts tracked by TipRanks. Its ratings were successful 59% of the time and delivered an average return of 11.5% each. (See Amazon stock buybacks on TipRanks)
Acushnet Holdings
We switch to the manufacturer of golf products Acushnet Holdings (GOLF). The company generated net sales of $2.4 billion in 2023, representing year-over-year growth of 4.9%. Revenue increased due to higher sales volumes of golf balls, clubs and golf equipment under the company's Titleist brand.
Tigress Financial analyst Ivan Feinseth reiterated a Buy rating on GOLF stock and increased the price target from $68 to $74. The analyst expects the company's business to be boosted by the entry of new players into the sport, an increase in rounds played and product launches from its industry-leading brands.
Feinseth pointed to favorable trends that would benefit Acushnet, saying the golf industry has seen a steady increase in the number of new golfers over the past six years. Additionally, the total number of rounds played increased from 800 million in 2019 to 950 million in 2023, with the momentum expected to continue.
“GOLF’s strong brand equity, driven by its premium and industry-leading product lines, including FootJoy and Titleist, is a key asset and the key driver of its premium market valuation,” Feinseth said.
The analyst also noted that Acushnet continues to increase shareholder returns through dividend increases and share buybacks. The company recently increased its quarterly dividend by 10.3% and announced an additional $300 million in stock repurchase authorization.
Feinseth ranks 243rd among more than 8,700 analysts tracked by TipRanks. Its ratings were profitable 61% of the time and delivered an average return of 12.4% each time. (See Acushnet Holdings Hedge Fund trading activity on TipRanks)
BJ's Wholesale Club
Finally there is BJ's Wholesale Club (BJ), a members-only warehouse club chain. Goldman Sachs analyst Kate McShane upgraded BJ stock to “buy” from “hold” and raised the price target to $87 from $81. The analyst expects higher market share and improving industry trends to lead to strong sales growth.
McShane highlighted that the grocery category accounted for 86% of BJ's merchandise sales in fiscal 2023. It expects a better sales outlook given the return of grocery volume growth and increased customer loyalty in the general merchandise category.
The analyst expects the general merchandise category to benefit from the company's efforts to refresh its assortment by adding new brands and higher-value merchandise, as well as implementing initiatives to improve the presentation and timing of offers.
Additionally, McShane expects BJ to benefit from a possible increase in membership fees. The company has a member base of more than 7 million accounts, supported by an impressive 90% renewal rate in fiscal 2023.
“Ultimately, BJ is an attractive club model with a compelling value proposition and a long perspective for new club growth that should continue to gain market share over the long term,” McShane said.
McShane is ranked #959 among more than 8,700 analysts tracked by TipRanks. Their ratings were profitable 62% of the time and delivered an average return of 5.1% each. (See BJ's ownership structure on TipRanks)