What are the top analysts who consistently get it right recommending strong buy stocks for 2018? TipRanks tracks and measures the performance of over 4,700 analysts to identify the top experts in each sector who consistently outperform the market.
Analysts are ranked based on two crucial factors: success rate and average return per recommendation. Following the top analysts of 2017 is also an effortless way to find under-the-radar stocks that experts believe have strong investing potential. For this piece, however, I went one step further.
I searched for the double whammy of 1) stocks specifically recommended by the Street’s top analysts and 2) strong buy stocks that also have the backing of Wall Street.
That’s why here I only include stocks with a ‘Strong Buy’ analyst consensus based on the past three months of ratings. Using this consensus, investors can be reassured that these stocks are the crème de la crème as far as the Street is concerned.
Bearing this in mind, let’s dive in and take a closer look now:
Strong Buy Stocks: Alibaba Group Holding
Chinese e-commerce leader Alibaba Group Holding Ltd (NYSE:BABA) is currently trading near the high end of its one-year range. But analysts are optimistic the stock has even further room to grow in 2018.
Indeed, Alibaba has received only bullish buy ratings from analysts for over half a year now. The average price target from the last three months of ratings alone comes out at $213- 14% above the current share price.
Five-star Stifel Nicolaus analyst Scott Devitt recommends buying BABA for exposure to China’s rapidly growing middle class. He points out that the Chinese eCommerce market can exceed $1 trillion worth of sales by 2019. And BABA looks set to capitalize on this with “well-managed and well-positioned leaders”.
Meanwhile, BABA also has the technical support from China’s broad and efficient telecommunications infrastructure. This continues to increase BABA’s ability to grow its online customer base. And at the same time, BABA’s online/ offline new retail strategy means it has all shopping preferences covered.
Strong Buy Stocks: Apple Inc.
Heading into 2018, Apple Inc. (NASDAQ:AAPL) has retained its ‘Strong Buy’ analyst consensus rating. In the previous three months, analysts have published 21 buy ratings and seven more cautious hold ratings. If we look at the $191 average price target from all these analysts, we find potential upside of 11%.
Encouragingly Key Banc’s Andy Hargreaves is optimistic on AAPL, even without blockbuster iPhone sales. He says: “We do not expect upside to consensus iPhone unit estimates [of 240 million] in FY18.” Instead, he is looking for sales of 237 million units for 2018 and warns that the multi-year sale cycle could be short-lived.
Ultimately, however, this doesn’t dampen his overall take on the stock:
“Despite our slightly dour view of iPhone units, we continue to believe the combination of increased iPhone prices and growing services revenue will drive upside to consensus gross margin estimates in FY18. This should drive upside to consensus EPS expectations, even if iPhone units are only in line.”
This five-star analyst reiterated his buy rating with a $192 price target (12% upside).