With a new year just around the corner, analysts at Piper Jaffray have compiled their top picks for 2016. Dozens of stocks from all sectors made the cut, including Apple Inc. (NASDAQ:AAPL), Novavax, Inc. (NASDAQ:NVAX), Oracle Corporation (NYSE:ORCL), and Starbucks Corporation (NASDAQ:SBUX).
Analyst Gene Munster spells out several reasons explains why Apple is a top pick for the New Year. First, he points to the “trend toward annual upgrades in the US,” which will have a favorable revenue impact later in 2016. Over the next four years, the analyst believes that iPhone upgrade cycles will transition to every 15 months, down from the current 22 month average. Munster notes that Apple will roll out the annual upgrade program internationally in the coming year, adding a potential 5% to 7% tailwind. Furthermore, he points to the anticipated iPhone 7 launch in Fall 2016 as a notable catalyst.
Most analysts agree with Munster’s bullish sentiment. Out of the 33 analysts polled by TipRanks, 25 are bullish while 8 remain neutral. The average 12-month price target is $149.41, marking a 34% potential upside from current levels.
This biotech company made the cut for top stocks of 2016 as Edward Tenthoff explains several catalysts that will drive the stock. Novavax, a biotech company focusing on vaccines, will review full data on its pipeline drugs for both seasonal and pandemic influenza. These endeavors are funded by BARDA (Office of Biomedical Advanced Research and Development Authority) under a $179 million contract. Furthermore, Tenthoff is looking forward to the company’s Phase III RESOLVE trial of RSV-F in elderly patients to fight a respiratory infectious disease.
According to TipRanks, Tenthoff is the only analyst with a recent rating on the company. He has a 50% success rate recommending the company with a +11.9% average return per NVAX call.
According to Katherine Egbert, this tech giant is the second largest software vendor in the world. The analyst explains, “As the #1 incumbent in enterprise infrastructure and applications, Oracle is well-positioned” to capitalize on the shift from on-premise systems to cloud software. Egbert touts the company’s “full suite of cloud-enabled applications and infrastructure,” estimating that cloud-based revenue will increase 43% in 2016.
According to TipRanks, 13 analysts share Egbert’s bullish view on the tech company. However, one analyst is bearish on the stock while 10 remain neutral. The average 12-month price target between these 24 analysts is $43.35, marking a 13% potential upside from current levels.
Analyst Nicole Miller Regan explains why Starbucks is a top pick for 2016. The analyst weighed in on the coffee giant, asserting its place as the “leading retailer, roaster, and brand of specialty coffee in the world.” Going into the New Year, the analyst sees a $110 billion opportunity for market capitalization. The analyst is bullish on the company’s position as “an elite global consumer brand with highly attractive core business fundamentals.” Specifically, she credits the company’s success in productivity and various platforms, including its expanded product offerings, as factors for “future growth and leverage opportunities across its entire portfolio.” Related, the company has also made operational advancements by lowering costs. Miller also comments on Starbucks’ “strong cash flow generation,” stating the company’s commitment to reinvesting its earnings makes it a stronger and more profitable company.
According to TipRanks, the majority of analysts are bullish on the coffee giant. Ten of the 12 analysts covering the stock are bullish while the remaining two are neutral. The average 12-month price target between these 12 analysts is $67.10, marking a nearly 11% upside from current levels.