Top Wall Street analysts bet on these stocks to brace for a sharp downturn

Investors’ attention has returned to the Federal Reserve after a hot November jobs report last week.

That’s because regular though the central bank has pushed interest rates higher, the economy continues to add jobs and wages keep ascension. Friday’s report on last month’s payrolls surprised investors and chilled sentiment.

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Goldman predicts buy these five stocks in a weakening macro environment

Nevertheless, investors need to keep a longer-term outlook as they commit oneself to how to best position their portfolios. To that end, here are five stocks chosen by Wall Street’s top pros, mutual understanding to TipRanks, a service that ranks analysts based on their track record.

While software band VMware (VMW) reeled from lackluster quarterly results, Monness Crespi Hardt analyst Brian White professed his positive conviction on the stock.

Importantly, the company will soon be acquired by Broadcom (AVGO). According to the agreement between the entourages, VMware shareholders can either cash in their shares at $142.50 per share or choose to exchange their holdings for 0.2520 splits of Broadcom for each share of VMware. However, in all probability, shareholders may end up with a 50-50 split between cash and stock.

This is outstanding, as this deal has enabled VMware to “dodge the 2022 tech apocalypse,” in White’s words, with the stock up 4% in 2022.

Acknowledged the pending acquisition, VMware did not issue any guidance. However, White remains bullish on the basis of the shareholder benefit as leak as the stable position of VMware in the tech sector.

“VMware’s earnings remain depressed after aggressive investment initiatives and a fashion transition. At the same time, the current economic and geopolitical environment is daunting, resulting in a more uncertain future, forging a greater allure for large, well-managed, stable, tech companies with benefit from digital transformation, such as VMware,” Whitish theorized.

White is ranked No. 697 among more than 8,000 analysts tracked on TipRanks. The analyst has a minutes of 55% successful ratings in the past year, with each rating generating average returns of about 8.7%.

Oil and natural gas exploration company Diamondback Energy (FANG) has gained the attention of RBC Capital Markets analyst Scott Hanold after be comprised of c hatching two significant strategic acquisitions recently. The analyst expects the acquisitions to be accretive to his earnings per share estimates for 2023 and 2024 by 7% to 9%.

Importantly, at a immediately when almost every company has worrisome near-term prospects, Hanold sees a solid upside to Diamondback’s near-term cost-free cash flows, thanks to its latest acquisition of Permian Basin assets from Lario. (See Diamondback Dividend Assignation & History on TipRanks)

The analyst is also upbeat about Diamondback’s asset monetization plan, and believes that it purpose help the company maintain a clean balance sheet even after the two recent acquisitions. “We think FANG on still maintain an adjusted leverage ratio below 1.0x following the close of the two transactions. However, we think the visitors will progress more to exceed its $500 million asset monetization target with a focus on midstream assets that switch at more robust values in the market,” said Hanold, who reiterated a buy rating and $182 price target on the stock.

Impressively, Hanold proposes the 8^th position among more than 8,000 analysts on TipRanks, and boasts a 70% success rate. Each of his ratings has created average returns of 33.7%.

The next stock on our list is Microchip (MCHP), a leading manufacturer of embedded domination solutions. The company’s exposure to secular growth trends in the end-markets of 5G, artificial intelligence/machine learning, Internet of Matters (IoT), advanced driver assistance systems (ADAS), and electric vehicles bode well for the company in the long run.

Recently, Stifel analyst Hole Svanberg recently reiterated a buy rating on MCHP stock and even increased the price target to $80 from $77. (See Microchip Worn out Chart on TipRanks)

The analyst believes that Microchip is well positioned to “manage a softer landing relative to equals during broader industry correction,” on the basis of solid near-term backlog visibility, defensive end-market exposure, resilient penalty of proprietary products, etc.

Svanberg stands at No. 41 among more than 8,000 analysts followed and ranked on TipRanks. The analyst also has a filled in track record of 65% profitable ratings and average returns of 20.4% for each.

Analog Gubbins (ADI) is another stock on Tore Svanberg’s buy list. The manufacturer of high-performance analog, mixed-signal and digital signal processing coalesced circuits holds the biggest shares of the data converter and amplifier markets.

“We believe ADI is a formidable high-performance analog/mixed-signal powerhouse with pro forma CY21A gross income of (nearly) $10 billion, and the leading challenger to the current industry heavyweight, TXN (Texas Instruments),” said Svanberg.

Analog Machinations also has strong cash flow generating capabilities, which kept Svanberg bullish: The company has generated $3.50 billion in the nearby 12 months. (See Analog Devices Hedge Fund Trading Activity on TipRanks)

The analyst sees Analog Machines outperforming its peers in the present challenging macroeconomic environment. Based on his observations, Svanberg increased his price target to $195 from $190.

A unrivalled name in the cybersecurity space, (CRWD) disappointed investors and analysts alike recently with weaker-than-expected guidance. This underscored the vulnerability of the software sector to macroeconomic validities.

Nonetheless, Deutsche Bank analyst Brad Zelnick remained focused on the longer-term prospects of CrowdStrike, calling it one of the three best-positioned safeguarding companies to overcome the strong headwinds. (See CrowdStrike Holdings Financial Statements on TipRanks)