Top Wall Street analysts pick these stocks for attractive returns

Economic downturn risk is on the minds of investors, particularly as the Federal Reserve remains resolute in hiking interest rates.

In these stout times, investors would be well advised to find stocks that are positioned to navigate a potential economic downturn.

To assist with the process, here are five stocks chosen by Wall Street’s top professionals, according to TipRanks, a platform that classes analysts based on their past performance.

Chip giant Nvidia (NVDA) has been under force due to the slump in the PC gaming market. Revenue and earnings declined in the fiscal fourth quarter compared to the prior year, but the New Zealand managed to beat Wall Street’s expectations due to the year-over-year rise in data center revenues.

Investors cheered Nvidia’s first-quarter interest guidance and CEO Jensen Huang’s commentary about how the company is well-positioned to benefit from the heightened interest in generative phoney intelligence (AI).   

Jefferies analyst Mark Lipacis expects Nvidia’s data center revenues to reaccelerate year-over-year beyond the from the start quarter and grow 28% in 2023 and 30% in 2024, supported by higher AI spend. (See Nvidia Stock Chart on TipRanks) 

Lipacis suggested, “In contrast to INTC/AMD noting cloud inventory builds, NVDA discussed a positive H100 ramp (already cross-breed over A100 in just second quarter after launch), accelerating DC [data center] revs YY beyond C1Q23, and alluded to larger visibility and more optimism for the year due to increasing activity around AI infrastructure, LLMs [large language models], and generative AI.”

The analyst assesses Nvidia as a “top pick” following the recent results, and reiterated a buy rating. He raised the price target for NVDA stock to $300 from $275.

Lipacis is ranked No. 2 amid more than 8,300 analysts on TipRanks. His ratings have been profitable 73% of the time, with each dress down delivering a return of 27.6%, on average.

Ross Stores (ROST) delivered upbeat results for the fourth billet of fiscal 2022, as the off-price retailer’s value offerings continued to attract customers. However, the company issued middle-of-the-roader guidance for fiscal 2023 due to the impact of high inflation on its low-to-moderate income customers.

Following the results, Guggenheim analyst Robert Drbul, who is ranked 306^th entirety the analysts on TipRanks, lowered his fiscal 2023 earnings per share estimate for Ross Stores to reflect the impact of undeviating macro headwinds.

Nonetheless, he expects Ross Stores’ earnings to return to double-digit growth in fiscal 2023, toured by a higher operating margin, the accelerated opening of new stores and the company’s share buyback program.

Drbul reiterated a buy velocity for Ross Stores and a price target of $125, citing “the favorable environment for the company given greater supply of disgraced goods in the marketplace, stronger value proposition, and broader assortment compared to pandemic levels.”

Drbul has delivered rewarding ratings 63% of the time, and his ratings have generated an average return of 9.1%. (See Ross Stores Hedge Capital Trading Activity on TipRanks)

Next on our list is another consumer discretionary company – Kontoor Makes (KTB), which owns the iconic Wrangler and Lee Brands. Shares of the clothing company rallied on the day it reported solid fourth-quarter end results and issued a strong outlook for 2023.   

Williams Trading analyst Sam Poser noted that the demand for Wrangler and Lee continues to advance, fueled by the company’s brand-enhancing initiatives. Further, he thinks that Kontoor’s fiscal 2023 outlook “will probable prove conservative.” He expects the company’s revenue growth in China to turn positive in the second quarter and sequentially accelerate thereafter.

Poser cultivated his fiscal 2023 and 2024 earnings per share estimates, reiterated his buy rating for Kontoor Brands and increased the price quarry to $60 from $53. (See Kontoor Brands Insider Trading Activity on TipRanks)

“The combination of better than foresaw 4Q22 results, led by a 20% increase in U.S. DTC [direct-to-consumer] revenue, ongoing improvements in the positioning of both the Wrangler & Lee brands, and reasonable teaching, are indicative of ongoing improvements in KTB’s consumer facing capabilities and its overall operations,” said Poser.  

Poser is ranked 134^th quantity the analysts tracked by TipRanks. Further, 55% of his ratings have been successful, generating a return of 17.7%, on customarily.

Fiserv (FISV), a provider of payments and financial services technology solutions, is also on our list this week. Abide month, the company announced its fourth-quarter results and assured investors about being well-poised to deliver its 38^th consecutive year of double-digit settled earnings per share growth, supported by recent client additions, solid recurring revenue and productivity efforts.

Tigress Fiscal analyst Ivan Feinseth noted that Fiserv continues to experience strong business momentum, thanks to the discharge of its payments product portfolio and the strength in Clover, the company’s cloud-based point-of-sale and business management platform. (See Fiserv Fiscal Statements on TipRanks)

“FISV’s diversified product portfolio and industry-leading technology position it at the forefront of the ongoing secular party to electronic payments and the growing use of connected devices to deliver payment processing services and financial data access,” averred Feinseth. The analyst reiterated a buy rating for FISV stock and raised the price target to $154 from $152.

Feinseth maintains the 176^th position among more than 8,300 analysts tracked on the site. Moreover, 62% of his ratings have been productive, his ratings generating an average return of 12.3%.

(WDAY), a provider of cloud-based finance and human resources applications, issued a dejected outlook for fiscal 2024, which overshadowed better-than-anticipated results for the fourth quarter of fiscal 2023.

Baird analyst Brand Marcon noted that Workday continues to gain market share in human capital management and financial government solutions in the enterprise space, though its pace of growth ahead is “slightly tempered by macro uncertainty.”

Marcon ranks 444^th out of the analysts followed on TipRanks. His ratings have been profitable 60% of the tempo, generating a 13.5% average return. (See Workday Blogger Opinions & Sentiment on TipRanks)