Investors are on pace to wrap up a strong November, but it can be a challenge to pick out the best plays for the long run.
All three of the major averages are tracking for sizeable monthly gains. Wall Street experts are able to delve into the details and determine which stocks might have the best prospects for the long term.
Here are five stocks favored by the top pros on the Street, according to TipRanks, a platform that ranks analysts based on their past performance.
Restaurant chain Domino’s Pizza (DPZ) is first on this week’s list. Following recent meetings with the company’s management about several of its activities, including sales initiatives, a loyalty program and its aggregator strategy, BTIG analyst Peter Saleh reiterated a buy rating on the stock with a “top pick” designation and a price target of $465.
The analyst expects the change in Domino’s rewards program to enhance traffic among lower-frequency carryout customers, while third-party aggregators are targeting higher-income consumers who value convenience. In particular, management thinks that the reduction of the spend hurdle under the revamped rewards program, to $5 from $10, along with lower redemption tiers, will drive higher transactions from lower-frequency members.
Saleh added that talks with management suggest that the deal with Uber Eats, which marks Domino’s foray into third-party aggregators, is expected to boost sales and margins for franchisees.
“We expect these initiatives will be significantly accretive to both sales and earnings in the near and long term, helping Domino’s recapture its prior momentum,” said Saleh.
Saleh holds the 504th position among more than 8,600 analysts on TipRanks. His ratings have been successful 58% of the time, with each one delivering an average return of 9.1%. (See Domino’s Options Activity on TipRanks)
Palo Alto Networks
Another BTIG analyst, Gray Powell, is bullish on cybersecurity company Palo Alto Networks (PANW). The company delivered better-than-expected fiscal first-quarter results. However, investors were concerned about the billings outlook.
Powell noted that the company missed the quarterly billings estimate and issued weak billings guidance as customers are less likely to sign multiyear pay-in-advance deals due to a high interest rate environment. That said, he highlighted management’s commentary about a strong demand backdrop and higher pipeline visibility.
The analyst contended that there was weakness in billings, but there was strength in metrics like the current remaining performance obligation. There were several other positive aspects: These include the solid growth in next-generation security annual recurring revenue and the increase in full-year operating margin and earnings per share guidance.
“All in, we think the FQ1 performance demonstrates that a number of factors can help PANW offset slowing growth in the firewall appliance market,” said Powell, who ranks 904th out of over 8,600 analysts tracked on TipRanks.
Powell reiterated a buy rating and a price target of $292. His ratings have been successful 53% of the time, with each delivering an average return of 7.2%. (See Palo Alto Hedge Fund Trading Activity on TipRanks)
In reaction to the solid print and forecast, Goldman Sachs analyst Kash Rangan raised his price target for MNDY stock to $270 from $250 and reaffirmed a buy rating. The analyst noted the upbeat revenue and outsized margin momentum, with the company’s operating margin of 13% handily exceeding the consensus estimate of 3%.
“Management’s strong execution, coupled with a sustained beat-and-raise cadence reinforces the view laid out in our preview that while macro pressures weigh on expectations, there is minimal disruption to near-term performance,” said Rangan.
The analyst thinks that management’s tone is growing incrementally more constructive, thanks to improving top-of-funnel activity, stabilization within the company’s larger cohorts’ net expansion rate and growing demand for new offerings.
Rangan also highlighted that the company is building its sales capacity and investing in infrastructure-layer improvements to enhance scale and speed, which would help pipeline conversion, improve retention and drive larger contract deals.
Rangan ranks No. 440 among more than 8,600 analysts tracked by TipRanks. His ratings have been profitable 59% of the time, with each delivering an average return of 8.2%. (See Monday.com Technical Analysis on TipRanks)
Search engine giant Google’s parent Alphabet (GOOGL) is next. Last month, the company reported upbeat third-quarter results. However, Google Cloud missed revenue expectations despite generating 22% growth.
Nonetheless, Tigress Financial analyst Ivan Feinseth is bullish on GOOGL stock and recently reiterated a buy rating, raising the price target to $176 from $172.
The analyst expects notable reacceleration in GOOGL’s revenue growth in Q4 2023 and 2024 and beyond, fueled by improved monetization due to the ongoing artificial intelligence integration and other capabilities that will drive further growth, mainly in Search and YouTube.
“GOOGL remains an incredible value as it is at the forefront of every secular technology trend, including Search, mobile, Cloud, data center, e-commerce, entertainment, home automation, autonomous vehicle technology, and health and fitness,” said Feinseth.
The analyst emphasized that Alphabet’s solid balance sheet and cash flow support the funding of its growth initiatives, strategic acquisitions and improvement in shareholder returns through share repurchases.
Feinseth ranks No.337 among more than 8,600 analysts on TipRanks. His ratings have been successful 58% of the time, with each delivering an average return of 9%. (See Alphabet Insider Trading Activity on TipRanks)
Finally, we’ll look at semiconductor giant Intel (INTC). The stock has witnessed a solid run after the chipmaker reported better-than-expected third-quarter results and displayed good execution of its cost-saving initiatives.
On Nov. 15, Mizuho analyst Vijay Rakesh upgraded INTC stock to buy from hold and increased the price target to $50 from $37, saying, “We believe INTC is lining up significant NEW Server product launches and Foundry customer announcements in the next six months.”
The analyst also sees a better roadmap in 2024 for the compute and data center businesses, compared to competitors and the company’s historical rollouts. In particular, he expects the data center business to gain from “the most prolific product launches,” including Emerald Rapids, Sierra Forest and Gaudi2/3 Accelerators. He also expects the company to benefit from an anticipated PC and data center industry upcycle.
Further, Rakesh highlighted that the Altera FPGA business spinoff is estimated to add value at $17 per share. The analyst expects 2025 to be a key transition year due to the Intel Foundry Services ramp and the rollout of the 18A, the company’s most advanced node.
Rakesh holds the 62nd position among more than 8,600 analysts on TipRanks. His ratings have been successful 60% of the time, with each delivering an average return of 19.1%. (See Intel’s Financial Statements on TipRanks).