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Analysts say buy stocks like Bank of America & Marvell


Matt Murphy, CEO, Marvell Technology

Scott Mlyn | CNBC

Investors appear to be welcoming the latest earnings season with renewed optimism despite concerns about inflation, recession and rising interest rates.

Indeed, strong quarterly results from several key companies helped boost the big-cap averages to weekly gains.

That being said, identifying the right investment opportunity requires more than just observing how a stock moves. Investors with a long-term perspective must look past the immediate noise.

Here are five companies that top Wall Street professionals have chosen to create lasting value, according to TipRanks, which ranks analysts based on their performance.

Knight-Swift . Transport

Road transport company Knight-Swift . Transport (KNX) is no stranger to the supply chain bottlenecks that have plagued industries since the pandemic began. This is also reflected in the recently announced second quarter business results. The network’s lack of mobility has put its multimodal business – which involves rail freight in containers and other towing equipment – under pressure.

However, analyst Cowen Jason Seidl It is expected that intermodal volumes will recover in the second half of this year, according to what has been stated by fellow Knight JB Hunt (JBHT) and CSX (CSX). (See Knight Transport Hedge Fund Trading Activity on TipRanks)

Furthermore, its other operating segments, namely its truck (TL) and smaller truck (LTL) businesses, show great resilience and strength. Seidl highlights the solid dominance of both segments, despite the spot rate of the truck business. These are payments made by the shipper to ship the shipment at market freight rates.

Knight businesses with fewer trucks, more power with acquisitions AAA Cooper and Midwest Motor Express last year, especially highlighted Seidl’s faith in the company. “KNX Expect LTL demand to remain strong with yields also improving significantly, which should help offset TL weakness. Seidl said confidence in LTL is met with continued expansion of terminals, with KNX’s door count now over 4,300″.

The analyst, who ranks 4th out of nearly 8,000 analysts tracking on TipRanks, has maintained a buy rating on Knight, with a price target of $55. “We see the diversification in KNX’s business as helping to ease pressure on the predicted TL weakness in year 23,” he said.

Seidl has successfully rated stocks 73% of the time, with each rating delivering an average return of 26.1%.

Truist Financial

Truist Financial (TFC) is the sixth largest commercial bank in the US, formed after the merger of two large banks, BB&T and SunTrust in 2019. Truist is skillfully integrating the assets of the two banks while delivering value. for shareholders. Furthermore, the higher interest rate environment is proving beneficial for Truist in the form of higher interest income.

Capital Markets Analyst RBC Gerard Cassidy think that Truist will be able to fully focus on taking the bank to the next level once the whole integration is over. “Furthermore, when the merger is complete and TFC is operating eight headquarters in its ROTCE 20 +% (Return on Tangible Common Equity) will be achievable on a consistent basis,” the investor said. analysis said. (See Truist Financial History and Dividends on TipRanks)

The bank’s just-released second-quarter results reflected strong gains from consistently higher insurance earnings, along with strong revenue from card-related fees and higher payments. However, the decline in home mortgage income is a hindering factor.

That said, Cassidy realized that Truist’s Strong underwriting standards and high credit quality will help its credit scores “outperform its peers over the next 24 months.”

Cassidy reiterated a buy rating on Truist with a price target of $70. Ranked 26th out of nearly 8,000 analysts tracking on TipRanks, Cassidy’s ratings have a 68% success rate and an average return of 22.5% per rating.

Bank of America

One of Cassidy’s other favorite stock picks is the financial services giant Bank of America (BAC), whose diversified business is helping it stay afloat during tough times. Needless to say, the company is thriving in a higher interest rate environment.

Of the company second quarter results shows that rising interest rates have boosted its net profit margin growth. Furthermore, credit quality continues to remain at a high level, which is another factor for Cassidy to maintain a buy rating for BAC share.

However, the analyst predicts a lower volume of share buybacks in the coming quarters. Therefore, he cut his price target to $40 from $45. (See Bank of America stock investors on TipRanks)

However, Cassidy is optimistic about developments in BAC’s deposits. Notably, total deposits reached $1.98 trillion in the second quarter. Analysts predict the company will outperform its peers during the current downturn, in terms of credit quality and profitability. “We predict the converted and ‘risk-off’ BAC will weather any economic storm over the next 12-24 months significantly better than the financial crisis,” Cassidy said. .

Furthermore, the analyst paid attention to the company’s mobile services. “Additionally, we believe the company’s mobile services are among the best in the industry, and as usage increases, we expect BAC to see profitability and growth,” said Cassidy. income increases”.

GlobalFoundries

Semiconductor foundry GlobalFoundries (GFS) has not been sheltered from global supply chain problems. However, growing demand for chips is expected to continue to boost the company’s business. (See Global foundry stock chart on TipRanks)

Recently, Deutsche Bank analyst Ross Seymore said he believes the semiconductor industry as a whole is going through a “purgatory” phase this earnings season, in which investors prefer to stay on the sidelines despite expectations of fundamental strength in revenue and earnings per share indexes.

Analysts expect the company to be among those likely to benefit from easing supply chain bottlenecks. However, the supply-side gains are expected to be balanced by falling demand for the remainder of 2022, prompting Seymore to cut its price target for Global Foundries from $70 to $55.

However, Seymore believes that GlobalFoundries and its peers are expected to be able to meet “remaining strong demand” from the improvement in supply, “giving a headwind to Q2 22nd growth while signaling a possible equilibrium.” is on the horizon”.

Seymore reiterated his buy rating on GFS stock, noting its strong long-term outlook. This analyst holds the 16th place out of nearly 8,000 analysts on the TipRanks database. He was successful on 74% of his ratings, generating an average return of 24% on each rating.

Marvell Technology

Another one on Ross Seymore’s top picks list is Marvell Technology (MRVL), a semiconductor company specializing in the production of analog, mixed and digital signal processing products and integrated circuits.

The company has significant world growth opportunities such as global 5G infrastructure development, bandwidth upgrade cycles in data centers and higher demand for faster Ethernet from the electric vehicle market and emerging autonomous vehicles. (See Marvell’s insider trading activities on TipRanks)

Still, Seymore warned of weakening demand in end markets, despite semiconductor companies’ undisputed fundamental strength. Therefore, analysts recommend investors to be selective when choosing to sell stocks to invest in.

With these short-term trends in mind, the analyst has reduced his price target on MRVL from $75 to $65. However, according to Seymore, Marvell has some underappreciated growth drivers that will help overcome immediate concerns and create more long-term value, making it one of his top defensive picks.



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