The Meta Platforms Inc. logo appears. At her booth, at the Viva Technology conference dedicated to innovation and startups, at the Porte de Versailles exhibition center in Paris, France, June 17, 2022.
Benoit Tessier | Reuters
The second half has begun in earnest, and profits are piling up.
Investors who track the action may get useful insights from Wall Street experts’ top stock picks, and this can help them make informed decisions as they seek solid returns over the long term.
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Here are five stocks for investors to consider, according to the top Wall Street professionals at TipRanks, a platform that ranks analysts based on their past performance.
First on this week’s list is the Mediterranean chain of restaurants reward (CAVA), which made a huge public debut last month. The rise in CAVA shares since its initial public offering reflects investor optimism about the fast-food chain’s growth prospects. Cava has expanded to 263 locations since it opened its first restaurant in 2011.
Stifel analyst Chris O’Cull has assigned a buy rating on Cava with a $48 price target. The analyst sees strong growth potential, given the company’s plan to expand to at least 1,000 restaurants in the US by 2032. Kava’s expansion plans include entering new markets in the Midwest next year.
O’Cull expects the company’s growth plans to be supported by a healthy balance sheet. He noted that after the IPO, Cava had about $340 million in cash and no debt financing. The analyst estimates annual revenue growth of 20% over the next four years, driven by at least 15% growth in the Cava footprint. He expects adjusted EBITDA to nearly double to $112 million in 2026 from $58 million this year and for the company to generate positive free cash flow starting in 2026.
“From our point of view, the valuation of the share premium can be justified by the AUV [average unit volume] and the opportunity for unit count growth and the potential for strong operating momentum to drive upward revisions to near-term estimates and long-term earnings potential,” O’Cull said.
O’Cull is ranked 349 out of more than 8,400 analysts tracked by TipRanks. His ratings were profitable 62% of the time, with each rating generating an average return of 12.3%. (See CAVA technical analysis on TipRanks)
tech giant apple (AAPL) is known for its innovative products, including the iPhone and iPad. However, the company’s higher-margin services segment has grown rapidly over recent years and has boosted the company’s revenue and profitability.
Evercore ISI analyst Amit Daryanani, who ranks 258th out of more than 8,400 analysts tracked on TipRanks, recently revealed the results of his company’s annual Apple Services survey. The survey indicated that Apple services continue to see increasing adoption across the board. In particular, Apple Pay, Music, and TV+ saw notable increases in adoption compared to last year’s survey.
The survey revealed that the average services revenue per user (ARPU) in the United States is $110, well above Daryanani’s global estimate of $81. The analyst asserts that ARPU growth is the main catalyst for the services business, given that smartphone penetration has likely reached peak levels.
“We continue to see Apple Services well-positioned to sustain double-digit growth in fiscal ’27 and beyond driven by increased average revenue per online user coupled with new product launches,” said Daryanani.
Daryanani reiterated a Buy rating on AAPL with a price target of $210. It achieved a 60% success rate, and each of its ratings returned an average of 11.5%. (See AAPL insider trading activity on TipRanks)
Next on our list is the social media giant meta (meta), which recently launched Thread, a social media app taking on Twitter.
Tigress Financial Partners analyst Evan Faineseth believes Thread’s launch was just in time to capitalize on Twitter’s declining popularity. He said the introduction of threads created an additional catalyst for growth that could boost Instagram engagement.
Feinseth also expects Meta’s investments in artificial intelligence and continuous integration to continue to drive engagement and ad revenue across all of its apps. The analyst highlighted that Meta’s strong balance sheet and cash flow help support growth initiatives, including investing in the Metaverse, strategic acquisitions and buybacks.
Feinseth repeated the Buy rating on Meta and raised the price target to $380 from $285. The analyst said, “Increased AI integration, better cost management, and increased operating efficiency will re-accelerate business performance trends.”
Feinseth ranks 205th among more than 8,400 analysts at TipRanks. Sixty percent of his ratings were profitable, with an average return of 12.8%. (See Meta Blogger’s opinions and sentiments about TipRanks)
semiconductor giant nvidia (NVDA) is a major beneficiary of the growing interest in generative AI, which is fueling huge demand for its GPU chips.
Goldman Sachs analyst Toshia Hari noted that Nvidia has already benefited from a traditional AI boom for a decade, as evidenced by the rise in data center segment revenue from $129 million in fiscal 2013 to $15 billion in fiscal 2023. The analyst increased his revenue and earnings estimates for Nvidia, as he believes the company has entered a new phase of generative growth driven by artificial intelligence.
Hari projects demand for Nvidia products in training generative AI models to represent a cumulative revenue opportunity of approximately $85 billion (base case scenario) in calendar years 2023 to 2025. (See Nvidia financials on TipRanks)
Meanwhile, he estimated that the conclusion (which includes key applications that can benefit from generative AI such as search, enterprise productivity tools, e-commerce, email, and social media) could be a revenue opportunity of roughly $7.7 billion from 2023 to 2025. , including $4.5 billion in 2025.
Hari raised the price target for Nvidia stock to $495 from $440 and reiterated the Buy assessment. He still sees “a significant future runway for the company based on its strong competitive position in the fast-growing (but emerging) AI semiconductor market.”
Hari ranks 171st among more than 8,400 analysts at TipRanks. Additionally, 63% of his ratings were profitable, with an average return of 19.1%.
American food (USFD) distributes fresh, frozen, and dry food items, as well as non-food products, to food service customers.
Recently, BTIG analyst Peter Salih reiterated the Buy rating on USFD with a $48 price target, saying, “US Foods is one of the best self-help stories in our coverage, as the majority of EBITDA growth hinges on managing operational improvements. It’s been seriously executed.” over the past year.”
After achieving an excellent first-quarter gross margin, Saleh raised the second-quarter gross margin estimate by 20 basis points to reflect increased penetration of private labels, rationalization of the SKU, reduced waste, and improved employee retention.
The analyst also raised his estimate for second-quarter EBITDA and expressed confidence in US Foods’ ability to beat expectations, citing the company’s strategic initiatives, stable industry sales and its track record of handily beating Wall Street’s EBITDA forecasts in recent quarters.
Saleh ranks 325th out of more than 8,400 analysts tracked on TipRanks. His ratings were profitable 64% of the time, each generating an average return of 12.7%. (See US food inventory chart on TipRanks)