Investors’ concerns regarding the potential persistence of elevated interest rates have resurfaced, contributing to a downturn in the major indices over the past week.
Even amidst present market turbulence, maintaining a long-term perspective is crucial for investors, who should seek out stocks capable of delivering appealing returns over the years ahead.
With this perspective, here are three stocks favored by leading analysts on Wall Street, as highlighted by TipRanks, a platform renowned for its ranking of analysts based on their historical performance.
CrowdStrike (CRWD)
This week’s inaugural stock selection is cybersecurity provider CrowdStrike (CRWD). The company has recently garnered investor attention with robust quarterly results and optimistic guidance.
Additionally, it announced its intention to acquire Flow Security, a provider of cloud data runtime security solutions.
Mizuho analyst Gregg Moskowitz emphasized CrowdStrike’s significant momentum for its Falcon Cloud Security, Identity, and next-gen LogScale SIEM (security information and event management) offerings. Management disclosed that these products collectively contributed over $850 million to annual recurring revenue.
Moskowitz also highlighted that in the fourth quarter, the company closed numerous substantial transactions, including over 250 deals valued at more than $1 million each. Moreover, deal volume increased by 30% year over year across all customer segments.
Supporting his bullish outlook, Moskowitz stated, “CRWD’s cloud platform remains very differentiated, its GTM [go-to-market] is unrivaled,” and the company is achieving more success beyond the traditional endpoint security markets.
The analyst perceives CrowdStrike as a beneficiary of generative artificial intelligence. Moskowitz reiterated a buy rating on CRWD stock and raised the price target to $390 from $360.
Moskowitz holds the 132nd rank among over 8,700 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, with each yielding an average return of 16.5%. (See CrowdStrike Ownership Structure on TipRanks)
Nike
Turning our attention to athletic footwear and apparel giant Nike (NKE), earlier this month, Guggenheim analyst Robert Drbul reaffirmed a buy rating on Nike stock, setting a price target of $130 and designating it as a “best idea.”
Drbul believes that the recent decline in the stock — down over 8% in 2024 — presents an enticing entry point with an appealing risk/reward ratio.
“We believe Nike is laying the groundwork for impactful launches of new products (led by basketball, but also running) to deliver an acceleration in top-line growth in 2H24 and into 2025,” remarked Drbul.
Highlighting Nike’s heightened focus on the fiercely competitive running category after facing setbacks in recent years, the analyst anticipates that the category’s growth will be bolstered by a range of new releases, including the Pegasus 41.
Drbul also foresees Nike’s brand visibility being prominently showcased at the forthcoming 2024 Summer Olympics. Additionally, he asserts that the Jordan brand remains robust and represents a significant opportunity for the company across international, women’s, and kids’ segments.
Drbul pointed out that the Jordan brand is poised to become the second-largest brand in North America.
Moreover, the analyst envisions the potential for gross margin expansion, driven by higher prices, favorable ocean freight rates, and enhancements in the supply chain, which are expected to outweigh the impact of rising product costs.
Drbul occupies the 565th position among more than 8,700 analysts tracked by TipRanks, with his ratings proving profitable 59% of the time and delivering an average return of 7.9%.
BJ’s Wholesale Club
BJ’s Wholesale Club, a prominent warehouse chain, recently disclosed a mixed bag of results for the fourth quarter. While the company’s earnings exceeded analysts’ consensus estimates, its revenue, which experienced an 8.7% year-over-year growth, fell short of expectations.
However, Baird analyst Peter Benedict expressed admiration for the company’s performance. He reaffirmed a buy rating on BJ stock and raised the price target to $90 from $80.
Benedict observed that BJ’s showcased promising top-line key performance indicators, such as traffic and units, despite persistent disinflation impacting the average basket size.
The analyst believes BJ’s is making significant strides in revamping its general merchandise business through diverse initiatives, including enriching its assortment and product presentation and bolstering its marketing endeavors.
Notably, general merchandise comparable sales are projected to outpace grocery comps in FY24.
Benedict also underscored BJ’s robust real estate pipeline and its intention to inaugurate 12 clubs this year. Additionally, he lauded the retailer’s favorable membership trends, with membership fee income rising by 6.5% in the quarter and a solid tenured renewal rate of 90%.
“With a healthy balance sheet and still-reasonable valuation, we continue to highlight BJ as an attractive long-duration mid-cap staple GARP [growth at a reasonable price] idea,” remarked the analyst.
Benedict holds the 74th position among more than 8,700 analysts tracked by TipRanks. His ratings have proven profitable 69% of the time, delivering an average return of 15.2%.
