Standing on the cusp of a recession, investing in the equity market can be scary. Luckily, TipRanks’ Trending Stocks tool helps us see which stocks Wall Street analysts have rated the most recently. Here, we picked Alibaba (NYSE:BABA), Bath & Body Works (NYSE:BBWI), TJX Companies (NYSE:TJX), Applied Materials (NASDAQ:AMAT), and Palo Alto Networks (NASDAQ:PANW) among the most-rated “Strong Buy” stocks trending recently.
Alibaba (BABA)
China’s strict COVID-19 policies, macroeconomic turmoil, competition, and slowing domestic demand have clobbered Alibaba. Its third-quarter results, which were posted last week, underscored the challenges, with revenues falling short of analyst estimates.
However, retail sales in China are slowly but surely recovering, and that is good news for Alibaba. The e-commerce and technology giant is building an interesting concept called “New Retail,” which aims to bridge the gap between online and offline shopping by leveraging Big Data. This can be a new competition-kicker for Alibaba.
Moreover, its net cash position and strong cash-flow-generating capabilities also allowed the company to appraise its stock buyback program by an additional $15 billion and extend the program through Fiscal Year 2025.
What is the Price Target for BABA Stock?
Alibaba bulls have recently been reiterating their Buy ratings on BABA stock, despite lowering their near-term price targets. The average BABA price target stands at $133.73, which implies a remarkable 73.8% climb over the next 12 months.
Bath & Body Works (BBWI)
Personal care retailer Bath & Body Works appears to be taking care of the business too. Its cost-saving measures and vertically-integrated supply chain helped it fight the bottom-line headwinds and beat analyst expectations for earnings per share in Q3.
After the print, Morgan Stanley (NYSE:MS) analyst Kimberly Greenberger raised her price target on Bath & Body Works stock to $76 from $72 while maintaining a Buy rating. She had anticipated the earnings beat but not the magnitude of the earnings surprise. Moreover, the company also raised its guidance during a time when demand is showing signs of being slower than usual around the holidays. This buoyed the confidence of Greenberger.
Currently, the stock is trading at a 10x P/E ratio, which is quite reasonable. The analyst sees several upsides and a chance for BBWI’s valuation to get materially re-rated upwards.
Is BBWI Stock a Buy, According to Analysts?
Clearly, Wall Street is bullish on BBWI stock overall, based on nine Buys and two Holds assigned in the past three months. The average BBWI target price is $50.27, which is 27.1% higher than the current price.
TJX Companies (TJX)
TJX is a leading off-price retailer of apparel and home fashion products, operating through the brands T.J. Maxx and Marshalls (Marmaxx), HomeGoods, Sierra, Homesense, etc. The company’s off-price business model, strategic store locations, large roster of good brands and fashion products, and efficient supply-chain management have been taking care of its well-being. In Q3, strength in its apparel business blew some steam off of top-line pressure.
Cowen & Co. analyst John Kernan recently bumped up his price target on TJX to $84 from $78. He noted that the company’s markup and merchandising margin opportunity is being undermined by the consensus. Moreover, there are high chances of freight costs deflating in Fiscal 2024, which will be a boon for TJX.
Additionally, Kernan sees several upsides going into the holiday season. “Momentum at the Marmaxx unit, along with TJX’s off-price business model of [selling] on-trend branded goods at a discount to traditional retailers, suggest an attractive channel for cash-strapped shoppers in the holiday quarter,” observed the analyst.
Is TJX Stock a Good Buy, According to Analysts?
Wall Street expects TJX’s stock price to go up around 8.5% over the next year. This is based on 12 Buys and three Hold ratings assigned in the past three months.
Applied Materials (AMAT)
Leading global semiconductor equipment provider Applied Materials recently reported better-than-expected Q3 results last week despite the downbeat sentiment that has gripped the semiconductor sector.
Supply-chain conditions are slowly improving. Being dependent on wafer starts at semiconductor facilities, the company can sell its world-class products in an up-cycle.
Also, the majority of Applied Materials’ products serve the more resilient sector of logic and foundry rather than the more volatile memory market. This serves as a buffer for the company against any unexpected decline in the memory market.
Where Will Applied Materials Stock be in One Year?
Wall Street analysts think AMAT stock can increase by about 12.9% over the next year, hitting $118.75. This is based on 18 Buys and six Holds assigned over the past three months.
Palo Alto Networks (PANW)
Palo Alto, one of the leaders in the cybersecurity space, is now focused on building on its leadership in the Next-Generation firewall space and providing a more comprehensive cloud security platform.
BTIG analyst Gray Powell is upbeat about this vision. “Given the mix-shift to the Next Generation Security (NGS) segment and improved performance in attached services on the traditional firewall business, we think PANW can maintain top-line growth at 20%+ and expand margins longer term,” he believes.
What is the Price Target for PANW Stock?
The average price target of PANW stock stands at $228.24, indicating 33.8% upside potential based on 32 Buys and four Hold ratings.
The Takeaway
Several challenges await companies this year and next. Nonetheless, gauging the long-term view, Wall Street is very bullish on these stocks.
