Earnings season presents a bountiful harvest for data-hungry investors. While a company’s earnings report primarily reflects historical performance, it also serves as a chance for businesses to provide guidance for forthcoming quarters.
Another key indicator investors can scrutinize is analyst upgrades. If an earnings report is akin to a progress report, an analyst rating can be viewed as a stock’s grade: buy, hold, or sell. Once a company releases its earnings report, covering analysts will issue ratings and/or price targets.
It behooves investors to seek out companies garnering a substantial number of analyst upgrades following their earnings report. Even more enticing are those instances where analysts release this information before earnings are announced. Following these trends is sage advice as these are robust stocks poised to trend upward in tandem with the prevailing analyst sentiments.
Netflix (NFLX)
At present, the streaming giant, Netflix (NASDAQ:NFLX), aces the list as a stock admired by analysts in the initial quarter of 2024. Having received a generous tally of 30 analyst upgrades and/or price target hikes, Netflix is evidently basking in the limelight following a bullish earnings report.
The company has scored across the board on its fourth-quarter earnings report, with an increase in subscriber count and advertising revenue. Additionally, it has successfully implemented measures to curb password sharing and has effectuated a price hike for its basic and premium (ad-free) subscriber base. Favorably, these developments are expected to bolster the company’s margins and cash flow, likely setting new records in 2024.
Adding to Netflix’s allure is their recent contract inked with WWE, set to kick off in 2024 – a shrewd move to tap into the lucrative live sports market, a much sought-after growth stimulus for all streaming platforms. The consensus price target signals a gain of approximately 7.5% for NFLX stock, with some analysts pegging the stock’s potential rise between 20% and 25%. This noteworthy surge comes on the heels of the company’s stock price already propelling by 50% over the last 12 months.
Lam Research (LRCX)
The semiconductor sector is experiencing a prolonged boom, and Lam Research (NASDAQ:LRCX), though not engaged in direct semiconductor manufacturing, plays a pivotal role in supplying equipment for chip production. Highlighted by 10 recent analyst upgrades, Lam Research is still riding a high following its latest fourth-quarter and full-year earnings announcement, which saw it surpass estimates on both the top and bottom lines.
Currently trading at an all-time high of over $869 per share, LAM stock might be poised for a pullback. Thus, potential investors should exercise prudence and consider waiting for a more opportune entry point. Nonetheless, for individuals who have already witnessed the stock price soar by 73% in the preceding 12 months, holding their position seems prudent, especially considering the prospect of collecting a secure dividend that currently pays out $8 per share annually, rendering room for further growth.
Advanced Micro Devices (AMD)
Advanced Micro Devices”’ (NASDAQ:”’AMD”’) stock is tantalizing investors with a steady stream of upgrades, now tallying 13 in the past 30 days. This bullish sentiment precedes the company’s impending earnings report on January 30, 2024.
The company’s outlook appears promising, particularly with the launch of its MI300X GPU chipset, positioning it favorably to snatch market share from Nvidia. However, with AMD stock currently trading north of $180 a share, the consensus target hovering around $158 warrants caution. While this does not necessarily imply a plunge exceeding 15%, it does suggest the stock may be racing ahead of earnings slightly. Therefore, it might be prudent to wait for any potential dip to acquire AMD stock.
Monster Beverage (MNST)
Monster Beverage (NASDAQ:MNST) has secured five analyst upgrades, perpetuating its impressive stock growth, having rewarded investors with a colossal 97% upsurge over the past five years. However, this skyrocketing stock price has been met with an increase in the company’s valuation, currently trading at around 35x forward earnings – aligning with its historical average, which surpasses the consumer staples sector average of approximately 27x earnings.
The bullish analyst sentiment bodes well for a stock that has undergone six stock splits, with the most recent one occurring in March 2023. Bolstering this sentiment is the company’s 30% market share in the burgeoning energy drinks category and its foray into the alcoholic beverages segment in 2023. Although this foray is presently a mere fraction of the company’s overall sales, it represents a burgeoning category that holds the promise of augmenting both
Investor’s Insight: Stocks to Keep Your Eye On in 2024
As investors scour the market for opportunities in 2024, several stocks are catching the attention of analysts and traders alike. Stocks like Lululemon Athletica (LULU), Procter & Gamble (PG), and Verizon Communications (VZ) are emerging as top contenders for potential growth. Let’s take a look at what makes these stocks stand out and why they might be worth considering for your portfolio.
Lululemon Athletica (LULU)
Known for its iconic yoga pants, Lululemon Athletica (NASDAQ:LULU) has captured the hearts of consumers and investors alike. With an impressive eight upgrades, the stock is expected to experience a 6.6% upside in the next 12 months. The athleisure company’s performance in increasing its sales and profit forecast for the fourth quarter, mainly driven by a robust holiday season, has garnered attention from analysts. Although the stock has experienced a recent dip of around 7%, it looks to be finding support in the $465 range, presenting a potential entry point for investors ahead of another anticipated strong financial report at the end of March.
Procter & Gamble (PG)
Turning to consumer staples, Procter & Gamble (NYSE:PG) emerges as a reliable choice for investors seeking stability. With a portfolio of essential products, the company has demonstrated resilience, even in challenging economic climates. While the stock has seen fluctuations in recent years, its average annual stock price growth of approximately 13% and the distinction of being a part of the exclusive Dividend Kings club with 68 consecutive years of dividend increases underscore its long-term value to investors. This resilience coupled with a solid and growing dividend makes P&G a compelling option for those looking for income and stability.
Verizon Communications (VZ)
As the saying goes, sometimes boring is beautiful, a sentiment that rings true for a company like Verizon Communications (NYSE:VZ). Despite experiencing a 25% decline in stock price over the last five years due to significant investments in its 5G infrastructure, Verizon’s solid hold on approximately 28% of the market share in the wireless business is a testament to its consistent performance. Analysts’ optimism surrounding the potential completion of the company’s infrastructure spending translates to a promising outlook for stock price appreciation in the coming years. Coupled with a dividend yield of over 6% and a track record of consistently increasing dividends over the last 19 years, Verizon offers an appealing investment opportunity for income-focused investors.
Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article.
