A Citibank sign outside one of the company’s offices in California.
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Investors simply can’t find a bottom in this bear market and are struggling to remain optimistic amid mounting concerns about a possible recession.
However, the key to successfully surviving a bear market is to wait calmly for the market to recover and, in the meantime, take advantage of the current discounts on the right stocks.
Now more than ever, it makes sense to closely follow what top Wall Street analysts are saying about stocks. Here are five stocks chosen by some of the top analysts on Wall Street according to TipRanks, which analysts rank based on their performance.
Electric Vehicle (EV) Manufacturer Nio (NEVER) suffers from the effects of general consumer spending weakness (in response to inflation); and this weakness is expected to remain an overhang for at least the remainder of this year.
Additionally, the lockdown in China has been an ailment so far due to the resurgence of COVID-19, but as restrictions ease, Nio is expected to see a spurt in growth. (See Nio hedge fund trading activity on TipRanks).
Recently, Mizuho analyst Vijay Rakesh cut his sales estimates for the June quarter and for the full year. He also lowered his price target on the stock to $48 from $55, while keeping an eye on near-term pressures, most of which are beyond Nio’s control.
Nonetheless, strong demand for electric vehicles maintained Rakesh’s longer-term view on Nio. Additionally, Rakesh sees the supply chain disruptions that have persisted since the pandemic began to ease in the second half of the year. The second half of the year is also expected to bring more capacity at foundries to help EV and other automakers ramp up production smoothly.
Overall, Rakesh maintains a bullish stance on the company in the medium to long term, with an enhanced Buy rating.
Rakesh ranks 131st in the list of nearly 8,000 analysts, followed by and on TipRanks. Additionally, 56% of its stock reviews were successful, earning an average of 19.5% per review.
Another electric vehicle and car accessories manufacturer that’s on Vijay Rakesh’s radar is Rivian (RIVN). Granted, the company has been the victim of circumstances, particularly supply chain disruptions and chip shortages, but growth is expected to pick up speed soon after the clouds gather.
In particular, Rakesh is bullish on the prospects for battery EVs (BEVs) in the second half of the year. “Despite heightened macro risks, BEVs could see strong 2H ramps as China reopens and demand improves, with BEVs potentially up >55% in 2H (over) 1H,” noted Rakesh, speaking broadly on the EV industry . (See Rivian’s stock chart on TipRanks)
As such, although the analyst has lowered its production estimate for Rivian for the June quarter, he is optimistic that the company will achieve economies of scale, supported by “a well-considered path to further vertical integration that will provide more control over the production and delivery of vehicles”. Rakesh factored near-term headwinds into its price target, cutting it $10 to $70 per share.
“We see RIVN as a pure and strong early mover in the EV market with a focus on the higher growth SUV/light truck market and a strong commercial vehicle roadmap with Amazon,” Rakesh stated while recommending the stock as a buy repeated .
microchip technology (MCHP) is a leading designer and manufacturer of microcontrollers, memory and analog products, and interface products for embedded control systems (small, low-power computers designed to do specific tasks). Like its competitors, the company is also facing the consequences of global supply chain bottlenecks resulting in extended lead times and production limitations.
Recently, Tore Svanberg, analyst at Stifel Nicolaus, found several merits of the deal and upgraded MCHP’s stock from ‘hold’ to ‘buy’. He also raised the price target to $75 from $70. (See Microchip Insider Trading Activity on TipRanks)
Svanberg believes that Microchip has proven its business is resilient in previous downturns. Additionally, he noted that the current valuation of 9.8 times price-to-earnings on CY23’s estimated non-GAAP EPS is close to Microchip’s lowest trading valuation in the past five years. That makes the stock even more attractive right now.
“MCHP has established a highly diversified, high-performance analog and embedded computing business model with an impressively diverse revenue base across multiple metrics,” said Svanberg, who ranks 28th out of nearly 8,000 analysts tracked on TipRanks. Additionally, his stock reviews were successful 66% of the time, earning an average of 22.5% per review.
The banking sector is among those benefiting most from the high-yield environment, and Citigroup (C) is one of the biggest players in this space.
As RBC capital markets analyst Gerard Cassidy pointed out in a recent research paper, Citigroup is asset sensitive, which means net interest income will rise steadily during the monetary tightening period. “Higher net interest income generated by rising interest rates falls just below the ‘bottom line’ and we believe can have a significant impact on earnings per share,” he said.
Cassidy also expressed optimism about Citigroup’s longer-term prospects. More than half of the company’s revenue comes from outside of North America, putting the company in a strong position to capitalize on growth in emerging markets.
Importantly, Citigroup and most industry players suffered below-average loan losses, which on the surface seems like a good thing but isn’t a sustainable trend, according to Cassidy. Although there is a likelihood of loan losses rising to normal levels in the second half of 2022, the analyst deemed them “manageable for C but could result in increased stock price volatility.” (See Citigroup Risk Factors on TipRanks)
Those observations prompted Cassidy to reiterate a Buy rating on C stock, reflecting its long-term upside. His short-term concerns fed into the price target, which he lowered to $60 from $65.
Gerard Cassidy ranks 30th among nearly 8,000 analysts tracked by TipRanks. Additionally, he has a history of 67% successful reviews and 22.7% returns on each review.
Public storage (PPE) owns, develops and operates self-storage facilities in the US Fortunately, a large portion of Public Storage’s customer base prefers not to move their stored items, making it easier for the company to increase its monthly fees. In addition, the recent sale of its Business Parks unit to Blackstone, which is expected to close in the third quarter of this year, is expected to generate $2.7 billion in proceeds for Public Storage.
Recently, Stifel analyst Stephen Manaker reiterated his positive stance on the storage operating environment, backed by strong and sustained demand.
Manaker also pointed to Public Storage’s strong balance sheet, as the company expects to cover all expenses in 2022 from its ample cash reserves. and the remainder will be paid via cash dividends). That being said, it already had $941 million in cash on hand at the end of the first quarter. In addition, it’s also expected to retain $500 million to $800 million in cash flows this year. This puts PSA in a strong liquidity position. (See Public Storage Dividends Date and History on TipRanks)
Now, Manaker recalled that PSA has a $500 million bond issue that matures this year. Additionally, according to the company, the budget for acquisitions for FY22 is $1 billion. Manaker’s assumptions and calculations above concluded that PSA may not even need to raise additional capital to repay its bond issue and complete the acquisitions. This is good news in times of high interest rates.
These strong upward moves prompted the analysts to reiterate a buy recommendation for the stock. However, rising interest rates prompted Manaker to lower his price target to $360 from $410, although he anticipates lower interest expenses.
Remarkably, Stephen Manaker ranks 42nd out of nearly 8,000 analysts tracked on TipRanks. Interestingly, 75% of his reviews were successful, and each of his reviews has delivered an average return of 19%.