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Waiting for a breakaway? Oppenheimer Says These 3 Stocks Are Ready to Lead the Rise


Today’s market conditions are best described as ‘unsettled’. Inflation was lower in the October print, but remains stubbornly high, while the Fed’s reactive interest rate policy is pushing capital prices higher, but has not yet constrained retail or operating activity. other purchases – or inflation. Other headwinds include continued bottlenecks in the global supply chain, made worse by the reoccurring COVID lockdowns in China and the ongoing Russian war in Ukraine.

So should investors stick to the defensive approach? Not according to Ari Wald, head of technical analysis at Oppenheimer. Wald believes that investors should abandon the obvious defensive strategy and move into offensive stocks.

“As momentum investors, we know that attacking stocks with low momentum scores, in this case growth stocks, are likely to outbid when a market breakout occurs. school eventually developed. This leads us to think that the bigger risk to our portfolio is that our exposure isn’t bullish enough. We believe owning relatively strong stocks, those that align with our guidelines, in low-momentum industries will help balance this risk,” explains Wald.

So, enough increase or not, that is the question. Top Oppenheimer stock analysts are taking solid bullish positions on three interesting stocks, predicting double-digit upside potential despite tough economic indicators. We ran these names through TipRanks database to see what other Wall Street analysts have to say about them. Let’s take a closer look.

Shoals Technology (SHLS)

We’ll start with Shoals Technologies, a company focused on electrical balance of systems (EBOS). These are important components for solar products; combiner boxes, junction boxes, junction boxes, in-line fuses, racks, PV wires, cable assemblies, recombiners and wireless monitoring systems that help set up and connect solar installations . Shoals has 20 patents on this technology and more than 40 gigawatts of electricity in construction, contract or operation, making it the world’s largest supplier of EBOS.

The combination of social and political dynamics driving solar has also propelled Shoals to record sales. The company reported a 52% year-over-year increase in top-line revenue for Q3 FY22, to $90.8 million. This was driven by system solutions revenue that grew 80% year-over-year to $69.5 billion and accounted for 77% of total revenue.

Earnings also hit a record high in the third quarter. Adjusted net income came in at $16.6 million, up 43% year over year and adjusted EPS came in at 10 cents per diluted share – up 42% from the 7 cents reported in The company’s high revenue and earnings are supported by a solid list of backlog and awarded orders, demonstrating future work commitments. These categories together grew 74% year-over-year, at a record $471.2 million.

Among the fans is Oppenheimer’s Colin Rusch, who was impressed by Shoals’ ability to make sales. “With SHLS posting strong numbers across the board including $144 million in prize and reservation growth for the quarter, we believe investors will grow increasingly confident,” wrote the 5-star analyst. believe in the growth trajectory of SHLS. We believe the value of shortening construction times and saving skilled labor is driving tremendous growth, complementing a strong solar demand environment where higher electricity prices are outpacing away from the cost of rising inflation and interest rates.”

“We expect preorders/rewards to accelerate from year-end through 2023 as a large number of customers become familiar with those products. We remain bullish on SHLS stock,” summed up Rusch.

Putting these comments into quantifiable terms, Rusch gives the SHLS a Doing Good (i.e. Buy) rating and a $41 price target that implies ~35% upside in the coming months. (To see Rusch’s achievements, click here)

Turning to the rest of the Street, opinions were divided almost equally. With 4 Buys, 4 Holds and 1 Sell specified in the last three months, it was reported on the Street that SHLS is a Moderate Buy. (View SHLS stock forecast on TipRanks)

Home Depot, Inc. (HD)

Oppenheimer’s second pick is one of the retail industry’s most recognizable names, Home Depot. The company is a global leader in the large home improvement, or supermarket, retail segment and caters to the DIY crowd, as well as large and small contractors and casual homeowners with a strong portfolio. book of small projects.

Earlier this month, the company reported solid results for the third quarter of 2022. Revenue grew 5.6% year-over-year, or $2.1 billion, to total $38.9 billion. la. Globally, comps are up 4.3%, while in the US market they are up 4.5%. This result was achieved despite the pressure of persistently high inflation, and despite higher interest rates making it difficult for consumers to access credit.

Positive sales numbers have received support from do-it-yourselfers, as well as professional builders and contractors. Professional clients, according to HD sources, have reported solid backlogs of work supporting their business purchases.

Along with increased sales, Home Depot has seen earnings increase. Net income increased year-on-year from $4.1 billion to $4.3 billion; on a per-share basis, the gain was 8%, from $3.92 per diluted share to $4.24.

Along with the quarterly results, Home Depot also announced its latest dividend payment, for the third quarter, at $1.90 per common share. This payout is scheduled for release on December 15th and will mark the fourth payout at this level. At an annual rate of $1.90, the dividend yields 2.4%, slightly above the market average. Home Depot has maintained a reliable dividend payout since 1987.

by Oppenheimer Brian Nagela 5-star analyst and home improvement retail expert, optimistic about the company’s prospects, with a leading position in the niche.

“We see the signs of earnings strength and persistent sales at HD as testament to the company’s performance and Home Depot’s position in the still vibrant home improvement market… In our view, any economic weakness is increasingly likely to prove short-lived and shallow and give way to a structurally solid, continuous backdrop for HD and home improvement spaces. housing, tied to favorable demographic trends, an aging housing supply and underlying healthy consumption dynamics,” commented Nagel.

Consistent with this view of HD’s fundamental strength, Nagel rates the stock Outperform (i.e. Buy), with a $470 price target, implying a 12-month ~45% rally. (To see Nagel’s achievements, click here)

With 20 recorded analyst reviews, broken down into 15 Buys vs. 5 Holds, Home Depot stock received a strong Buy consensus from analysts.(View HD stock forecast on TipRanks)

Lowe’s companies (SHORT)

Last but not least is Home Depot’s main competitor in major home improvement retail, Lowe’s. Lowe’s is the second-largest home improvement company in the United States, and in recent years the company has taken a series of steps to improve its retail basics. Chief Executive Officer Marvin Ellison, who took the helm in 2018, took a hands-on approach, focused on improving customer service, sales and inventory – while pursuing a series of stringent cost-cutting measures including mass layoffs and the closure of inefficient companies. location.

In recent years, Lowe’s track record has shown results from Ellison’s initiatives. The company consistently shows year-over-year growth in both revenue and profit. In its most recent quarterly report, for Q3, Lowe’s had sales of $23.5 billion, up from $22.9 billion in the previous quarter, with adjusted diluted EPS of $3.27 – increased by more than 19% over the same period.

Lowe’s also pays regular dividends. The most recent statement is a payment of $1.05 per common share, to be released on February 8 of next year. At that rate, the annual dividend comes to $4.20 and yields 2%, almost exactly the same as the market average. Lowe’s has maintained a history of reliable dividends stretching back to 1980.

We’ll check back with industry expert Brian Nagel, whose stance on Lowe’s is very similar to his stance on HD; Clearly, Nagel believes the home improvement retail space is big enough to support the two giants.

“We are very supportive of recent trends at LOW and believe that persistent sales and earnings strength as well as potential upside reflect good capital management on a healthy foundation for home improvement. and significant internal repositioning efforts have been undertaken over the past few years. As pointed out in previous reports, while risks to the home improvement and LOW sectors persist, we increasingly consider market concerns about a significant downward trend to come. is too pessimistic,” noted Nagel.

Going forward, Nagel rates the Stock LOW Outperform (i.e. Buy), along with a $300 price target. If the target is hit, the stock could offer a total potential return of ~40% over the next 12 months.

Collectively, Lowe’s selected 18 recent analytical reviews; these include 11 Buys, 6 Holds and 1 Sell, for a moderate Buy consensus rating. (View LOW stock forecast on TipRanks)

To find great ideas for trading stocks at attractive valuations, visit TipRanks’ Best stocks to buyone tool that unifies all of TipRanks’ equity insights.

deny the responsibility: The opinions expressed in this article are those of prominent analysts only. Content is used for informational purposes only. It is very important that you do your own analysis before making any investment.

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