When looking at the current market, investors are facing a lot of uncertainty and unknowns. The Federal Reserve’s rate cuts have caused hesitation and unease among those with investments. However, to navigate these challenges successfully, it is crucial to adopt a long-term perspective. One way to make informed decisions is to follow the recommendations of Wall Street experts who carefully analyze the financial performance and growth strategies of companies. Here are three stocks that are highly favored by the Street’s top pros, as per TipRanks.
One of the top picks this week is Domino’s Pizza (DPZ). Following a strong beat on earnings per share in the first quarter, driven by increased U.S. franchise royalties and fees and improved gross margin within the supply chain, the company has caught the attention of experts. Deutsche Bank analyst Lauren Silberman reiterated a buy rating on DPZ stock and raised the price target to $580 from $555 post the Q1 results. The U.S. same-store sales growth of 5.6% showcases significant momentum, with improved traffic in carryout and delivery being notable. Silberman attributes this traffic growth to Domino’s revamped loyalty program, strong value proposition, operational initiatives, and innovation. Additionally, the company is benefitting from increased contributions from Uber Eats, thanks to enhanced marketing efforts and awareness. Overall, the Q1 results have reinforced Silberman’s bullish stance on DPZ, given the company’s strategies to boost same-store sales, accelerate unit growth, improve franchisee profitability, and enhance margins.
Shake Shack
Shifting focus to burger chain Shake Shack (SHAK), while the first-quarter results were mixed, investors were optimistic about the improving business trends noted by the company. BTIG analyst Peter Saleh reiterated a buy rating on SHAK stock and increased the price target to $125 from $120 after a recent investor meeting with the management. Saleh believes that the combination of technology, like kiosks, an enhanced operating model with reduced labor, and increased marketing efforts will drive significant growth and profitability for Shake Shack. The high-teens check growth in kiosk orders compared to traditional in-store orders highlights consumer preferences for customization options available at the kiosks. Saleh anticipates more sales benefits from kiosk usage in the future, along with labor savings and operational efficiency.
Apple
Tech giant Apple (AAPL) is another company that has garnered favor from analysts despite a decline in revenue reported during the fiscal second quarter. The tough comparisons with the previous year affected the revenue, but investors were pleased with better-than-expected results and an expanded buyback program of $100 billion worth of share repurchases. Baird analyst William Power maintained a buy rating on AAPL stock with a price target of $200, describing the fiscal Q2 results as “solid.” The growth in Services revenue at 14.2% year over year, as well as the improved performance in China, were particularly notable. Power sees Apple’s AI update at the June developer conference as a potential catalyst for the stock. The premium valuation he assigns to AAPL stock is a reflection of the company’s strong execution, growing services contribution, eco-system benefits, and robust free cash flow.
By following the insights and recommendations of seasoned analysts, investors can make more informed decisions about which stocks to include in their portfolios for long-term growth and success. Companies like Domino’s Pizza, Shake Shack, and Apple have been highlighted as top picks by Wall Street experts, pointing towards their potential for favorable returns and growth in the future.