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Top Analysts Say Buy Stocks Like Block & Starbucks


Starbucks Irish Cream Cold Brew drinks for the holidays.

Source: Starbucks

Between the Federal Reserve’s rate hikes, fresh economic data, and huge earnings from tech giants, it’s been a busy week for investors.

Since the market can be very volatile, it is important to maintain a long-term view and avoid making decisions based on sudden movements in stocks.

According to TipRanks, a service that ranks analysts based on their performance, take a look at these five stocks, Wall Street’s top professional stocks that have marked their long-term prospects.

Starbucks

High end coffee chain Starbucks (SBUX) is a strong candidate for a strong recovery, given its brand strength and sound financials.

Ahead of the release of financial results for the third quarter of fiscal 2022, scheduled for August 2, Evercore analyst ISI David Palmer optimistic about the company. The analyst believes that the recent increase in subway traffic in China could have a positive impact on same-store sales growth in the country. (See Starbucks dividend history and date on TipRanks)

Palmer also hopes that Starbucks will make significant changes to its bar setup, outdated machines and technology, which will boost the chain’s transaction growth opportunities in FY23. that the estimated transaction growth in North America for fiscal year 23 has reached consensus. “We also envision these changes to boost partner morale and ultimately reduce consolidation risk.”

With these observations in mind, the analyst, who is ranked 657 out of nearly 8,000 analysts on TipRanks, reiterated his buy rating and $95 price target on Starbucks. The analyst was successful with 60% of his ratings, each of which generated an average return of 5.9%.

Domino’s Pizza

Another company on Palmer’s acquisition list is Domino’s Pizza (DPZ). Like most companies operating in the fast-food and restaurant industries, Domino’s has been a victim of high input costs, reduced consumer discretionary spending, and labor shortages.

However, effective supply chain management, strong brands, reasonable prices and technological innovation are helping the company scale up despite the difficulties. (See Domino’s stock chart on TipRanks)

Palmer is optimistic about the pizza chain’s efforts to internalize the management of delivery orders and minimize delivery restrictions to increase workforce capacity. “To this end, the company is working to share labor scheduling best practices, they are pushing more orders to labor-efficient mobile ordering and receiving ($7.99 value is supporting) and is likely testing technology to allow motorists to more easily “opt-in” to be a driver,” the analyst said.

Palmer also sees a good opportunity to gain market share in the food segment as “inflationary forces evolve.” Additionally, the company’s digital offering of a large pizza for $7.99 with a mix and match option is another factor that can sustain sales growth. at the same store.

Unit

Unit (SQ) is a payment processing solution provider. The company has been dealing with difficult waters for the past two years, and their experiences in 2022 are adding to the challenge. Block is facing significant revenue losses in the face of increasing competition and falling consumer spending amid stagnant inflation.

However, the strong momentum in offering Cash Apps is helping the company stay on the water. Analyst at Deutsche Bank Bryan Keane predicting meaningful profitability for Block of Q2 2022, results are expected to be published on August 4. The analyst cites “improved new product attachment rates and positive changes in pricing” as two of the numbers. Factors driving the business of Cash App.

“We remain constructive on Cash App and believe this segment has the potential to surprise growth in Q2/2012 above our gross margin organic growth rate estimate. 18 percent (the pace of spending will still recover in the midst of an economic downturn in our view)”. Keane.

The analyst also believes that the synergy from the “buy now, pay later” pioneer that Afterpay will be good for profit growth. (See Block hedge fund trading activity on TipRanks)

Keane reiterates buy rating on SQ stock with a price target of $155. Analyst with an average return rating of 8.7%, currently ranks 601 out of nearly 8,000 analysts on the TipRanks database. He was successful with 59% of his ratings.

Fiserv

Keane is also interested in the prospect of another fintech services company: Fiserv (FISV). The company is showing an encouraging growth trend despite the macroeconomic difficulties that are affecting the company’s operating margin.

In its recent second-quarter earnings report, the company raised its revenue and earnings-per-share (EPS) growth outlook for fiscal year 22, despite the possibility of a recession. It’s an impressive move that strengthens Keane’s confidence in the stock. (See Fiserv insider trading on TipRanks)

Furthermore, the analyst also points out that new deals, expansion of old agreements and strong international footprint, especially in Latin America, are significantly boosting the company’s revenue.

The analyst outlined his outlook for Fiserv’s EPS growth for FY 22, FY 23 and FY 24. He also raised his outlook on the company’s FY 23 revenue growth. Keane reiterated a buy rating on the stock with a price target of $135.

Datadog

Top analysts are banking on software companies Datadog (DDOG). The company uses a real-time data monitoring platform to help corporations analyze their entire stack seamlessly. The company may not be sheltered from macroeconomic difficulties, but is more than likely to recover quickly and effectively, based on a solid environment for IT spending.

Ahead of quarterly earnings results expected to be reported on August 4, Monness analyst Crespi Hardt Brian White maintain your stance on Datadog with a buy rating, despite having lowered its 12-month price target to $130 from $160 due to macro setbacks. (See Datadog risk factors on TipRanks)

White believes that accelerated digital transformation has created a secular growth trend in the cloud, which will continue to drive long-term demand for cloud computing. Datadog’s solutions. “Given the rapid growth of Datadog, the strong fit of the visibility market, and the company’s private cloud platform, we believe the stock will enjoy a premium valuation relative to the stock,” White said. with other next-generation software vendors.

The analyst also said Datadog has huge long-term potential to turn a profit as the business matures.

White’s ratings gave him a success rate of 57% and average returns of 9.9% per film. The analyst is ranked at 524th out of nearly 8,000 analysts tracked on TipRanks.



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