Experts reading the economic tea leaves are convinced that a recession is in the making. However, a strong portfolio can ensure smooth sailing through one. TipRanks’ Analyst Top Stocks tool helps investors take the first step toward building a recession-ready portfolio by offering a comprehensive view of the stocks that top Wall Street analysts are recommending based on deep research. TJX Companies (NYSE:TJX) and Eli Lilly & Co (NYSE:LLY) are two stocks that have been recommended by Wall Street analysts over the past two days.
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TJX Companies (TJX)
The leading off-price retailer of fashion and home decor, TJX, operates through the well-known brands T.J. Maxx and Marshalls (Marmaxx), HomeGoods, Sierra, Homesense, and the like. Its apparel business is doing well on the back of strong momentum in consumer spending, but looking ahead too, the company is well-positioned to survive a downturn and emerge stronger.
TJX is surviving the slowdown with its off-price business model, tactical store locations, a wide range of brands and products, and efficient supply-chain management. These important operational efficiencies are likely to support the company through troubled waters.
After meeting with TJX management recently, Cowen analyst John Kernan raised his price target on TJX stock to $85 from $84 while maintaining a Buy rating. Management talked positively about opportunities across apparel, footwear, accessories, home, beauty, and kids, fortifying Kernan’s conviction in the business model.
Kernan also believes that the markup and merchandising margin opportunity of TJX are undermined by the consensus. Some more good news is that freight costs are expected to deflate in Fiscal 2024, which will be a relief for TJX.
Will TJX Stock Go Up?
Analysts expect the share price to move up 8.7% to $86.33 over the next 12 months. Moreover, Kernan’s long-term convictions have strong support from the Wall Street consensus, with a Strong Buy rating based on 12 Buys and three Holds.
Eli Lilly & Co (LLY)
Mega-cap pharma giant Eli Lilly’s solid portfolio of core drugs in diabetes, autoimmune diseases, and cancer has supported a 38% share price rally this year. Among recent positives is the possibility of Eli Lilly’s Alzheimer’s drug donanemab bringing a breakthrough in the treatment of the disease. The strength and potential of these drugs and treatments to catalyze the company’s growth also justify the high valuation of 55.4 times trailing earnings and 12 times sales.
Last month, Berenberg analyst Kerry Holford raised the price target on LLY to $375 from $345. “Lilly is one of the two key players in diabetes care, and we believe the potential market opportunity is much higher than the consensus forecasts as we are seeing evidence of accelerating adoption,” said the analyst.
Cowen analyst Steve Scala also recently reiterated a Buy rating on LLY stock and raised the price target to $430 from $390. The analyst believes a dip following any weakness in the outlook would be a buying opportunity due to the company’s solid fundamental positioning.
What is the Price Target for LLY Stock?
Wall Street is bullish on LLY stock, with a Strong Buy rating based on 13 Buys and two Holds. The average price target for the stock is $387.93, which indicates 4.3% upside potential over the next 12 months.
The Takeaway
A recession is not everlasting but can be devastating for equity portfolios. Choosing stocks with ample capital, solid outlooks, strong demand, and compelling fundamental dispositions can reverse the ill effects of a recession (if any) on your portfolio sooner than you expect. Both TJX and Eli Lilly have what it takes to beat a market downturn.
