When it comes to investing for wealth creation, a myopic view is not sustainable. Keeping the long-term in mind, here are four “Strong Buy” companies chosen by using the TipRanks’ Trending Stocks tool that tracks the most-rated stocks—Trip.com (NASDAQ:TCOM), Broadcom (NASDAQ:AVGO), Apple (NASDAQ:AAPL), and Costco (NASDAQ:COST). These stocks are in the spotlight this week.
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Trip.com (TCOM)
China-based global travel services company Trip.com recently reported decent results for Q3, with its top and bottom lines coming above consensus expectations. The results reflected strong demand for long-haul travel despite COVID-19 restrictions, convincing management of a heavy performance improvement as markets open up further. Long-haul hotel bookings significantly increased by more than 130% quarter-over-quarter.
Recently, Morgan Stanley analyst Alex Poon reiterated his bullish stance by maintaining a Buy rating on TCOM stock and raising the stock’s price target to $40 from $32. In his report, the analyst acknowledged the presence of “COVID hiccups” in the forthcoming months as China’s economy comes to terms with eased restrictions despite COVID cases. Nonetheless, all the business segments of Trip.com are positioned for strong rebounds from the second quarter of 2023 onwards as China reopens fully.
What is the Price Target for TCOM Stock?
Nine unanimous Buy ratings by Wall Street analysts justify the Strong Buy rating on TCOM stock. The average price target of $38.78 indicates an upside of 11.4%.
Broadcom (AVGO)
Semiconductor and infrastructure software solutions provider Broadcom is benefiting from the growing adoption of its next-gen solutions by hyperscalers, enterprises, and service providers. Rapidly-growing technologies like 5G and IoT (Internet of Things) create a solid upside for the company.
Moreover, Broadcom serves multiple target markets, which helps it hedge its operating risks by reducing its exposure to volatility in any of the markets. To that end, synergies from acquisitions have been a boon for the company to maintain its stronghold in different areas. Its impending acquisition of VMware is expected to reduce competition in infrastructure software and simultaneously strengthen its competitive position against industry titans like Cisco (NASDAQ:CSCO), Atlassian (NASDAQ:TEAM), IBM (NYSE:IBM), and Microsoft (NASDAQ:MSFT).
Recently, Deutsche Bank analyst Ross Seymore reinforced a Buy rating on the stock while raising the price target to $590 from $575. The analyst expects to see semiconductor investors look for a bottom in both share prices and fundamentals in 2023, thus creating upside potential for the stock.
What is the Price Target for AVGO Stock?
For the next 12 months, Wall Street analysts forecast an average price target of $654.73, which is 17.8% higher than the current price.
Apple (AAPL)
One of the most valuable companies in the world, Apple, has recently faced softening product demand thanks to inflation. Further, issues at the Zhengzhou manufacturing hub in China also forced the company to cut its production targets for this year.
Nevertheless, an increasing subscriber base in its Services business and solid brand loyalty are key catalysts for growth.
Moreover, a strong balance sheet combined with a significant cash-flow generating capability is one of the strong points of the company. As of September 30 this year, Apple had cash and short-term investments worth $48.3 billion.
Moreover, the company’s commitment to regularly returning cash to its shareholders through dividends is also commendable. Markedly, $3.7 billion was returned through dividend payouts in the last reported quarter.
In recent news, Apple was reportedly planning to allow users to sideload other app stores on iOS. After the report, Morgan Stanley analyst Erik Woodring observed that the third-party stores will not put App Store revenues at meaningful risk of competition (at most a 1% impact on revenues and 2.5% impact on earnings per share). The analyst believes that in its attempt to please EU regulators, Apple could eliminate an overhang on its stock. With this, Woodring reiterated a Buy rating and $175 price target on Apple.
What is the Price Target for AAPL Stock?
Wall Street analysts, on average, believe that AAPL stock will rise by 34% over the next year to reach $179.71.
Costco (COST)
Costco offers large volumes of food and general merchandise at discounted prices through membership warehouses. The stock is considered defensive, as the business has been holding up in tumultuous times exceptionally well on the back of strategic investments, a customer-centric business approach, merchandise initiatives, and a focus on membership growth.
Moreover, Costco is a well-placed dividend-paying stock thanks to its solid cash-flow generation. The company raised its quarterly dividend by 13.9% to 90 cents per share in April this year.
Truist analyst Scot Ciccarelli, who has a Buy rating on CSCO stock, observed that the company remained resilient through its first quarter of Fiscal 2023 despite considerable softness in the market. The analyst is confident about Costco’s prospects, considering its dividend payout commitment, continued share gains, and a potential increase in membership fees.
Moreover, a beta of 0.71 indicates that Costco’s share price movements are less volatile than the market, which is a positive.
What is the Price Target for COST Stock?
The average price target given by the analyst consensus is $547.59, indicating a 19.4% upside potential from current levels based on 17 Buys and six Holds assigned in the past three months.
The Takeaway
As the bear market threatens to accompany us into 2023, the above stocks rely on their unique strengths to ensure a safe journey through the year.
