Macro uncertainty and geopolitical tensions continue to weigh on investor sentiment, making stock selection a challenging task. Focusing on well-established, large-cap stocks (stocks having a market capitalization of more than $10 billion) with attractive long-term growth potential could enhance investors’ returns. Using TipRanks’ Stock Comparison Tool, we placed Apple (NASDAQ:AAPL), Li Auto (NASDAQ:LI), and Energy Transfer (NYSE:ET) against each other to find the most attractive large-cap stock as per Wall Street analysts.
Apple (NASDAQ:AAPL)
Tech giant Apple has been under pressure in recent quarters due to the impact of macro headwinds on consumers’ discretionary spending, especially on big-ticket goods. While Apple exceeded analysts’ expectations for the fourth quarter of Fiscal 2023, investors were disappointed with the decline in the company’s revenue for the fourth consecutive quarter.
In particular, the company’s Q4 FY23 revenue declined 0.7% to $89.5 billion, as higher revenue from iPhone sales and Services was more than offset by lower Mac and iPad sales. Further, analysts expect muted revenue growth in the crucial holiday quarter. During the earnings call, management said that they expect the company’s December quarter revenue to be similar to last year despite one less week in the fiscal period.
Despite near-term challenges, there is optimism about Apple’s long-term prospects due to its Services business and growth opportunities in markets like India.
Is Apple a Buy or Sell?
On November 3, D.A. Davidson analyst Tom Forte lowered his price target for Apple to $166 from $180 and reiterated a Hold rating on the stock, citing the company’s flat revenue guidance for the December quarter, which lagged analysts’ consensus estimate of 4.6%.
Management projected year-over-year growth in iPhone sales for the December quarter but still guided for flat overall revenue, which the analyst believes is proof that the company cannot depend on iPhones alone to drive shares higher as it has in the past.
Including Forte, eight analysts have a Hold rating on AAPL stock, while 23 have a Buy recommendation for a Moderate Buy consensus rating. The average price target of $202.12 implies 14.3% upside potential. Shares have risen 38% year-to-date.
Li Auto (NASDAQ:LI)
Chinese electric vehicle (EV) maker Li Auto is impressing investors by growing its deliveries faster than rivals like Nio (NYSE:NIO) and XPeng (NYSE:XPEV). The company’s October deliveries increased 302% year-over-year and 12% from September to 40,422 vehicles. The company is confident about continued momentum, driven by the demand for its hybrid offerings and new models.
Li Auto is scheduled to announce its third-quarter results on November 9. Analysts expect solid growth in the company’s revenue and profitability, driven by an impressive 296.3% rise in Q3 2023 deliveries. They expect the company to swing to a profit of $0.37 per share from a loss per share of $0.63 in the prior-year quarter.
What is the Target Price for Li Auto?
Last month, Morgan Stanley analyst Tim Hsiao reaffirmed a Buy rating on Li Auto stock with a price target of $53. The analyst stated that the latest checks indicate that overall foot traffic in the company’s flagship stores in Tier 1 cities increased 4% sequentially in September.
Hsiao added that there was an uptick in retail conversion rate (ratio of order intake to foot traffic), which reflected the improving efficiency of sales personnel in closing deals with the support of more flexible marketing and promotional campaigns.
With seven unanimous Buys, Li Auto scores a Strong Buy consensus rating. The average price target of $53.61 implies 36% upside potential. Shares have rallied 93.2% so far this year.
Energy Transfer (NYSE:ET)
Energy Transfer is a midstream energy company with about 125,000 miles of pipeline and associated energy infrastructure. The master limited partnership (MLP) announced mixed third-quarter results earlier this month, with revenue surpassing estimates but earnings lagging expectations. Solid volume growth in the quarter was more than offset by a notable decline in lower natural gas and natural gas liquids (NGL) prices.
Meanwhile, the company continues to attract investors with its lucrative dividends. Last month, it announced a quarterly cash distribution of $0.3125 per common unit, reflecting a dividend yield of 9.25%. With the recently completed acquisition of Crestwood Equity Partners LP, the company is well-positioned to grow over the long term.
Is Energy Transfer a Safe Stock to Buy?
Following Energy Transfer’s Q3 results, UBS analyst Shneur Gershuni marginally increased the price target for ET stock to $23 from $22 and reiterated a Buy rating on November 2.
ET stock earns Wall Street’s Strong Buy consensus rating based on nine Buys and one Hold. The average price target of $17.40 implies 29% upside potential. Shares have risen 14% upside potential.
Conclusion
Analysts are highly bullish on Li Auto and Energy Transfer, while they are cautiously optimistic about Apple. Li Auto has proved its might through robust deliveries in recent months despite macro challenges in China and intense competition. If we include Energy Transfer’s dividends, then the upside in total returns offered by both Li Auto and Energy Transfer stocks is comparable. Investors can choose either or both of these stocks based on their sector preference and investment goals over the long term.
