Analysts publish multiple bullish stock ratings- but which are the stocks that really stand out from the crowd? Here we delve into the favorite stocks of five-star analysts. TipRanks tracks and ranks over 4,800 analysts. This allows us to focus on the ratings of analysts who tend to get it right. As you will see below, all the analysts referred to are generating highly impressive success rates and average returns. So when they make an extremely positive recommendation, it makes sense to pay attention. Bear in mind all of these Top Pick ratings were published in September/ October. Let’s delve in now:
Microsoft (MSFT)- Timothy Horan
For Top 25 analyst Timothy Horan (Track Record & Ratings), Microsoft is the stock to watch in the cloud and communications industry. He writes “We continue to prefer cloud services companies, with enterprise exposure as economic growth is accelerating. MSFT remains our top large-cap pick.” This comes with a price target of $127 (13% upside potential).
So why is MSFT specifically set to outperform? Horan lists three key reasons:
- Azure continues to close the gap on AWS (Amazon) and helps enable hybrid cloud adoption.
- Deeper integration between the Dynamics, Office and Analytics offerings allows MSFT to gain share in the enterprise SaaS market.
- Management is likely to be more disciplined on the expense front, leading to a stabilization of EBIT margins.
If we take a step back, we can see that top analysts share Horan’s bullish sentiment. The stock boasts a ‘Strong Buy’ consensus from best-performing analysts. The average price target from these analysts currently stands at $122. See what other Top Analysts are saying about MSFT.
Boston Scientific (BSX)- Jayson Bedford
Top Raymond James analyst Jayson Bedford (Track Record & Ratings) is betting on the fortunes of medical device giant Boston Scientific. Note that Bedford is ranked #34 out of 4,882 analysts tracked by TipRanks.
He added the stock to his Healthcare Top Picks list in September, swapping out diabetes stock Dexcom. And the stock remains in place in the firm’s October list.
“We continue to like the Dexcom story and have confidence in our estimates, but given the performance of DXCM last month, we believe Boston offers a bit better near-term risk/reward” explains Bedford.
He continues: “Boston’s revenue and earnings growth profile is unique within the large-cap med device space. Revenue growth is supported by a multitude of new product launches (Spectra Wavewriter SCS, Acurate valve, Resonate ICD) and entry into faster growing end markets.” Plus visibility into operating margin expansion should drive double-digit earnings growth. From current levels, he sees prices rising 8% to hit $41.
Encouragingly, this is a stock with 100% Street support. In the last three months, BSX has stacked up no less than 15 top analyst Buy ratings. See what other Top Analysts are saying about BSX.
Dave & Buster’s Entertainment (PLAY)- Stephen Anderson
The hybrid game arcade and restaurant chain Dave & Buster’s Entertainment is a Top Pick for Maxim’s Stephen Anderson (Track Record & Ratings). He has just boosted his PLAY price target from $68 to $71 (11% upside potential) citing better-than-expected F2Q18 (July) results. On September 14, PLAY reported EPS of $0.84, easily beating the $0.67 Street mean.
Looking to the future, Anderson spies a big opportunity for PLAY in the world of virtual reality gaming. “Our upwardly revised $71 price target [also] reflects the launch of VR gaming to boost top-line visibility, a resumption of margin growth, and the ability of VR to drive Food & Beverage sales” writes Anderson.
Although he sees FY18 as an investment year for PLAY, these investments should result in sustained top-line and bottom-line growth beginning in F2H18.
Net-net “PLAY remains one of our top picks in the restaurant industry. Amid concerns about rising menu prices and the rise in delivery services resulting in declining restaurant traffic, we view PLAY’s unique positioning among publicly traded names as a dining-and-entertainment destination as a key positive.”
He isn’t alone in his take on PLAY. This ‘Strong Buy’ stock scores 6 recent top analyst Buy ratings with a $70.5 average price target. See what other Top Analysts are saying about PLAY.
Costco (COST)- Rupesh Parikh
Warehouse club Costco has the thumbs up from top Oppenheimer analyst Rupesh Parikh (Track Record & Ratings). He reiterated his support for the stock following a roughly in-line quarter report.
“COST shares have pulled back a bit from recent highs, and we would take advantage of recent profit-taking. COST remains a top pick for us along with DG and SFM within our food retailing space” advises Parikh. Indeed, from current levels, he sees shares rising 20% to $262.
Critically, he believes COST can produce sustainable top and bottom line delivery even in a more competitive retail backdrop. “Ongoing market share gains in the grocery category coupled with continued momentum in the company’s more discretionary offerings in a still strong consumer backdrop should help to sustain a mid-single-digit type comp trajectory” writes Parikh. See what other Top Analysts are saying about COST.
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