As we push through the newly recognized 40-year high inflation, the third interest hike of the year that was incidentally the most aggressive in almost three decades, and a demotivating outlook for economic growth for 2022, keeping our money safe is the priority.
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This calls for being very choosy about stocks picked in these turbulent market conditions. The TipRanks’ Smart Score Tool may come in handy in this regard.
The tool tracks key factors to rate the stocks on a scale of 1 to 10. These determining factors include analyst ratings, insider transactions, hedge fund transactions, and other technical and fundamental factors. Essentially, the tool does the groundwork for you to make your pick.
To give a clearer understanding of this tool, we have picked out two large-cap stocks that have a score of “Perfect 10” on TipRanks.
AT&T (NYSE:T)
Telecom service and technology giant AT&T is one of those companies that have gained so far this year. T stock has gained 4.8% year-to-date, with April’s spin-off of WarnerMedia contributing to the gains.
Morgan Stanley analyst Simon Flannery observed that the divestment is enabling the company to focus on growing the core communications business. “Greater visibility into the financial performance of the company post the spin-off of WarnerMedia, along with a potential for incremental return of capital and defensive sectors re-rating higher, could provide more upside for the AT&T stock,” wrote Flannery.
AT&T has a huge debt burden (net debt at $169 billion as of March 31). The divestment of WarnerMedia raked in $43 billion in proceeds, which will help the company ease its debt burden and possibly deleverage its balance sheet.
Flannery is bullish on the company’s long-term prospects, as evident from his Buy rating with a price target of $22.
Wall Street is cautiously optimistic about the stock though, with a Moderate Buy consensus rating based on 11 Buys, six Holds, and one Sell. The average price target for T is $23, indicating 18.34% upside potential from pre-Thursday price levels.
Importantly, AT&T is a “Perfect 10” according to TipRanks’ Smart Score rating system, indicating that most of the key factors determining a good bet have been ticked off the checklist. The company has been flaunting the score for about three months now.
Lowe’s (NYSE: LOW)
Home improvement behemoth Lowe’s boasts of more than 1,970 operational stores across the U.S. and Canada. Despite facing macroeconomic setbacks, the retailer aims to increase its fiscal 2022 revenues by $1.5 billion year-over-year to $99 billion.
Moreover, rising interest rates have cooled the housing and home improvement market. This has led to a sharp drop in lumber prices, which can be good news for Lowe’s as these low prices may encourage DIY customers to resume shelved projects. As a matter of fact, Lowe’s draws most of its sales from DIY home improvement customers.
Moreover, the company keeps its shareholders happy with regular dividends and has been consistently paying dividends for more than 60 years. The company recently hiked its quarterly dividend rate by 31%.
Last month, Bank of America analyst Brian Callen upgraded LOW to a Buy from a Hold, prompted by higher confidence in a sustainable execution outlook.
Wall Street analyst consensus is bullish on the stock, with a Strong Buy rating based on 13 Buys and four Holds. The average price target for Lowe’s stands at $235.33 currently, suggesting an upside of 31.48% from pre-Thursday price levels.
Moreover, with a score of “Perfect 10” from TipRanks’ Smart Score rating system, the stock displays solid potential to surpass market expectations.
Conclusion
The present macroeconomic environment gives us all the more reasons to have a tool to refer to in order to play safely in the market, and the TipRanks’ Smart Score tool gives us just that.
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