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The postelection rally has hit some turbulence in recent days, giving investors a bumpy ride in the near term. However, these choppy markets can harbor plenty of opportunities — for those who know where to look.
Investors shouldn’t focus too much on short-term volatility as they position their portfolios. Recommendations from Wall Street can help them make informed decisions on stocks and seek solid long-term returns.
Top-rated analysts pay attention to multiple aspects when selecting stocks of companies with solid fundamentals and strong execution.
Bearing that in mind, here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Amazon
We start this week with e-commerce and cloud computing giant Amazon (AMZN). The company impressed investors with third-quarter beats on the top and bottom lines, fueled by strength in its cloud and advertising businesses.
In reaction to the solid Q3 print, Monness analyst Brian White reaffirmed a buy rating on Amazon stock and boosted the price target to $245 from $225. While the analyst acknowledged regulatory pressures, he remains bullish on AMZN as he thinks it will continue to “capitalize on the cloud, expand its digital ad business, innovate with AI, realize efficiencies from a regional fulfillment network, and leverage a leaner cost structure.”
White highlighted that Amazon’s revenue growth accelerated to 17%, with significant profit upside. Notably, Q3 operating profit exceeded his estimates, driving record operating margin at 11%. He also noted the sharp sequential rise in operating margins at Amazon Web Services, or AWS, and International business. Based on the solid results, the analyst raised his revenue and earnings per share estimates for 2024 and 2025.
White also pointed out Amazon’s focus on reducing costs via improved efficiencies and new initiatives such as regionalizing its U.S. fulfillment network. The company now aims to regionalize its U.S. inbound network and leverage advanced robotic innovations across its fulfillment network.
Overall, White sees lucrative growth potential for Amazon across e-commerce, AWS, digital media, advertising, Alexa, robotics, artificial intelligence and other avenues.
White ranks No. 38 among more than 9,100 analysts tracked by TipRanks. His ratings have been profitable 69% of the time, delivering an average return of 20.4%. See Amazon Stock Charts on TipRanks.
Uber Technologies
We now move to this week’s second pick, ride-sharing platform Uber Technologies (UBER). The company recently delivered better-than-expected third-quarter revenue and earnings. However, it missed Wall Street’s expectations for Q3 gross bookings.
Nonetheless, Evercore analyst Mark Mahaney remains bullish on UBER stock. He reiterated a buy rating with a price target of $120, following a series of investor meetings with management.
Mahaney thinks UBER will gain from autonomous vehicle rollouts, given its position as the largest ride-sharing demand aggregator. He added that better availability of robotaxis on the Uber platform will drive improved customer service through shorter wait times, broader ride selection and possibly lower prices.
“UBER believes that the economics it can offer AV owners can be compelling, allowing them to generate very high margins and better fleet utilization than they can develop on their own,” said Mahaney.
Based on his discussions with management, Mahaney explained that the deceleration reflecting in Uber’s Mobility bookings growth in Q3 and the estimate for Q4 is due to the negative demand elasticity caused by the surge in insurance costs and a slowdown in “party hour” bookings, or those that take place during evenings and weekends. He thinks this deceleration will moderate, given the slowdown in the rate of insurance cost increases, growth prospects of new products such as Uber for Teens and Uber for Business as well as potential improvement in consumer discretionary demand.
Finally, Mahaney remains confident about Uber’s ability to consistently boost its earnings before interest, taxes, depreciation and amortization and free cash flow margins over the next three to five years, supported by multiple measures to drive cost efficiencies.
Mahaney ranks No. 34 among more than 9,100 analysts tracked by TipRanks. His ratings have been successful 64% of the time, delivering an average return of 28.9%. See Uber Technologies Stock Options on TipRanks.
Block
Finally, let’s look at fintech giant Block (SQ). The company, formerly known as Square, narrowly beat analysts’ earnings expectations but missed revenue estimates for the third quarter.
Following the results, BTIG analyst Andrew Harte discussed the positives and negatives of Block’s Q3 performance. He noted that the company’s initial FY25 gross profit growth guidance of at least 15% almost met the consensus estimate at 14.9%. However, Q4 gross profit outlook of 14% fell short of expectations due to the shift in the timing of certain expected benefits from Q4 to next year.
The analyst thinks CEO Jack Dorsey did a good job in highlighting the company’s lending products and explaining how they are fueling the growth of Block’s ecosystem. Despite the soft Q4 guidance and management’s commentary indicating that investors will have to wait until the second half of 2025 for growth acceleration, SQ stock continues to be a top pick for BTIG.
Harte cited several reasons for his bullish stance, including Block’s track record of surpassing guidance and the stock’s attractive valuation at 12-times FY25 EV (enterprise value)/EBITDA. He added that the company is in the early days of fueling increased product adoption in both its Cash and Square ecosystems, indicating continued growth potential ahead.
“Block is just beginning to integrate its Cash App and Square ecosystems, which could create meaningful flywheel effects over time,” said Harte while reiterating a buy rating on the stock with a price target of $90.
Harte ranks No. 152 among more than 9,100 analysts tracked by TipRanks. His ratings have been profitable 75% of the time, delivering an average return of 63.8%. See Block Hedge Funds Activity on TipRanks.
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