Are you ready? These success stories are only just beginning say top analysts.
We are hitting a big week for the major tech stocks. Coming up over the next few days we have earnings reports for Alphabet, Facebook and Amazon. The combined market cap of these 3 companies alone is over $2 trillion. Luckily the mood going into the print is firmly bullish. One NYSE trader, Kenny Polcari, has even been quoted as saying that tech earnings will “blow the roof off the house.”
And if we turn to the TipRanks’ Earnings Calendar, we can see that all three of these stocks score a ‘Strong Buy’ Top Analyst Consensus Rating. This is based on ratings over the last three months from analysts with the most precise stock picking abilities. This means that they have the highest success rates and average returns. Especially in these volatile market conditions, these are the analysts really worth listening to.
So with this in mind, lets take a closer look at their take on what we can expect this week. These may be some of the best-known stocks in the world, but according to the Street the investing opportunity is still extremely compelling:
Alphabet (NASDAQ:GOOGL)
For Alphabet, the Street is anticipating EPS of $9.51. This is on the back of gross revenue and net revenue estimates of $32.22B and $25.63B, respectively. Ahead of the report, RBC Capital’s Mark Mahaney (Profile & Recommendations) reiterated his Buy rating on GOOGL with a $1,285 price target. “We are looking for Core Google gross revenue of $32.33B (up 25% Y/Y) and net revenue of $25.67B (up 23% Y/Y), driven by ongoing strength in Mobile Search, Programmatic and YouTube” he explained.
Looking out to the rest of 2018, this Top 20 analyst spies a big catalyst in Google’s self-driving unit Waymo. According to auto experts, Waymo is way ahead of rivals thanks to 7MM miles of autonomous driving. And now this investment is about to pay off: “The commercialization of Waymo by year-end in Phoenix could be a catalyst for the stock in the near-/medium-term, leading to a potential rerating in GOOGL’s multiple.” Long-term, he believes Waymo could be worth a whopping $119B- $180B.
Finally, don’t let the recent $5 billion European fine on Google faze you. While this is likely to be a key topic on the earnings call, ultimately Mahaney writes “we believe GOOGL may be moving past peak regulation in the near term.” This is a sentiment echoed by other analysts: Oppenheimer’s Jason Helfstein says, “we don’t see the $5B fine as meaningful.” He sees the stock spiking 13% to $1,350.
Facebook (NASDAQ:FB)
Even with the privacy overhang, the Street is still expecting another very strong quarter for the social media giant. The consensus currently stands at revenue of $13.33B with $1.75 EPS. In the last couple of days, five-star Piper Jaffray analyst Michael Olson (Profile & Recommendations) reiterated his FB buy rating and ramped up his price target from $210 to $250. This indicates sizable upside potential of 19%.
Olson cites the core strength of Facebook’s rapidly-growing digital advertising business. In a research note to clients, he said Facebook has a “strong long-term revenue growth trajectory.” FB continues to make the most of advertisers shifting budgets from traditional offline channels (think television and print media) to high-ROI online channels.
Specifically, the analyst highlights the monetization of WhatsApp and Messenger as suggesting that core advertising still offers “significant additional growth potential.” WhatsApp, for example, has yet to be monetized with 1.5 billion-plus active users. And don’t forget Instagram, which is fast becoming one of the most powerful and valuable malls in the world. It’s no surprise that Mark Mahaney calls FB his ‘Top Large Cap Long.’
Amazon (NASDAQ:AMZN)
From one top stock to another: “Amazon remains our top pick in large cap Internet, into the quarter, on a twelve-month basis and long-term,” Deutsche Bank analyst Lloyd Walmsley (Profile & Recommendations) told clients on July 19. He ramped up his price target to $2,200 from $1,800 previously. This means that this five-star analyst is now modelling for robust upside potential of over 20% from current levels.
“We recognize the concerns, however modest, regarding potential for higher near-term investment in fulfillment facilities, last mile delivery, international markets … these concerns are far outweighed by the large and expanding TAM [total addressable market] most recently with the acquisition of PillPack as well as the expansions into Brazil and Australia.”
Amazon acquired online pharmacy PillPack at the start of the month. The $1 billion acquisition is set to close in the second half of the year, giving Amazon pharmacy licenses in 50 states. The move was applauded by analysts, who saw it as a further sign of Amazon’s disruption potential. “This transaction in effect gives AMZN a national pharmacy footprint overnight” stated KeyBanc’s Edward Yruma at the time.
As we can see below, Street consensus is looking for EPS of $2.49. This is with revenue of $53.1 billion.
Which ‘Strong Buy’ stocks are top analysts recommending right now?
Stay ahead of the crowd. TipRanks’ earnings calendar provides users with a simple and effective way to find stocks with upcoming earnings dates that have been recommended by the best-performing sell-side analysts. Filtering for stocks with a very bullish ‘Strong Buy’ Street consensus rating is the perfect way to find new investing inspiration. Go To The Earnings Calendar Now<<
