If you're an individual investor looking for good places to put your money to work, you really couldn't pick a better mentor than Warren Buffett. Since he took the helm of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) in 1965, its stock price has risen at a rate of more than 20%
There's no sugarcoating it; 2022 was a brutal year for investors. The respective declines of 9% for the Dow Jones Industrial Average, 19% for the S&P 500, and 33% for the Nasdaq Composite marked their worst returns since 2008.
A recession may be inevitable this year, as many experts are predicting. However, investors who can restrain themselves from falling into the trap of recency bias can actually make the most of a downturn. Leaving the groundwork to the experts is the next step. To that end, here are
five stocks chosen by using TipRanks’ Trending Stocks tool — T-Mobile (
NASDAQ:TMUS
), Amazon (
NASDAQ:AMZN
), PayPal (
NASDAQ:PYPL
), Alphabet (
NASDAQ:GOOGL
), and Southwest Airlines (
NYSE:LUV
). These stocks are among the most rated by analysts this past week.
T-Mobile (TMUS)
Last year was a good year for communications giant T-Mobile, which witnessed robust growth in customers, evidenced by its
preliminary 2022 results. This growth is reflected in the stock price, which soared 40.5% in the past year.
JPMorgan (
NYSE:JPM
) analyst Philip Cusick pointed out that customer churn was very low and that the company has likely witnessed solid service revenue growth and improved margins in the fourth quarter. Importantly, Cusick is firmly bullish on T-Mobile for the long term and even deems it his favorite communications services stock. Needless to say, he reiterated a $200 price target and a Buy rating on TMUS stock.
RBC Capital analyst Kutgun Maral agrees with Cusick. “Management sees total industry postpaid phone net adds normalizing in 2023 after outsized growth in 2021/2022, though remains bullish on its share gain opportunities,” noted Maral, reiterating a Buy rating on the stock with a price target of $166.
What is the Price Target for T-Mobile Stock?
Wall Street analysts believe that the price of TMUS stock can increase 22.9% in the next 12 months to hit $182.83 on average. Analysts are bullish on the stock, with a Strong Buy rating based on 13 Buys and one Hold.
Amazon (AMZN)
Amazon achieved a new milestone last year. The e-commerce and technology behemoth became the first ever public company to lose over $1 trillion in value. This year might not be easy, too, with interest rates still on an upward trajectory and a recession in the vicinity.
Keeping this year’s challenges in the account, UBS analyst Lloyd Walmsley lowered the price target on Amazon to $125 from $165. After checking up on Amazon’s AWS business, the analyst cut his near-term growth estimates for the company.
However, despite the painful fall and uncertainty ahead, the long-term growth picture is still firm. Walmsley reiterated his Buy rating on the stock. Moreover, New Street Research analyst Daniel Salmon also sees upside potential and initiated coverage on Amazon with a Buy rating and $130 price target.
Although it is facing high interest rates and lower consumer spending risks, Amazon is continuing its investment in value-adding initiatives. It recently managed to
bag an $8 billion term loan from multiple lenders, including DBS Bank and Mizuho Bank, which should help the ship sail smoothly this year.
What is the Prediction for Amazon Stock in 2023?
Wall Street sees Amazon reaching $137.50 on average over the next 12 months, increasing 57.4% from its current price. Notably, 36 analysts have a Buy rating on the stock, while there are three Hold ratings, giving it a Strong Buy consensus rating.
PayPal (PYPL)
Digital payments leader PayPal has managed to ward off increasing competitive risk over the past two years like a champion.
Mizuho analyst Dan Dolev recently analyzed the company’s share of outgoing web traffic across U.S. merchants and found that trends may stabilize for PayPal.
Moreover, Truist analyst Andrew Jeffrey recently
upgraded the stock to a Buy from a Hold with a price target of $95, encouraged by the possibility of new leadership this year. Jeffrey expects that a new CEO will bring a fresh perspective while building on the current CEO’s success. He hopes a new CEO will wield “a freer M&A hand, perhaps moving the company into card-present acquiring, expanding its TAM (total addressable market), and boosting terminal revenue/EPS growth.”
What is PYPL Stock's Price Target?
The average price target for PYPL stock is $106.96, which implies 38.9% upside potential from its current price. The stock is currently a Moderate Buy on Wall Street based on 22 Buys and eight Holds.
Alphabet (GOOGL)
Internet media and technology giant, Alphabet, has been roiled by the headwinds that 2022 threw at technology stocks. Nonetheless, Monness analyst Brian White reassures that “Alphabet is well positioned to capitalize on the long-term digital ad trend, participate in the shift of workloads to the cloud, and benefit from digital transformation.”
Tigress Financial Partners analyst Ivan Feinseth’s thoughts resonate with those of White. The analyst believes that Alphabet’s focus on its AI-first strategy will “drive the development of greater functionality and more helpful products.”
The company continues to display strength in Cloud and Search, underscoring the resiliency of its core business. Feinseth believes that the near-term weakness creates a solid buying opportunity for investors.
Is GOOGL Stock a Buy or Sell?
Alphabet has a Strong Buy consensus rating based on 32 unanimous Buys. The average price target for GOOGL stock is $125.94, which indicates 43.1% upside potential from its current price.
Southwest Airlines (LUV)
U.S. passenger carrier Southwest Airlines is still recovering from
massive flight cancellations. Rating agency Moody's (
NYSE:MCO
) recently said that despite losing millions of dollars to the meltdown, Southwest should be able to manage the resulting credit thanks to strong liquidity and consistent demand for air travel.
Moody’s also said that although the airline’s reputation has taken a hit for now, it is not expected to permanently be the case once the storm passes. Southwest’s competitive pricing and mostly-reliable service should help customers see past the Christmas inconvenience and give the airline another chance.
Moreover, CFRA analyst Colin Scarola also supported the theory that customers do not “permanently ditch an airline” because of a bad incident or two.
Is LUV Stock a Buy, According to Analysts?
LUV stock has a Moderate Buy consensus rating on Wall Street based on eight Buys and three Holds. The average price target of $45.82 indicates 29.2% upside potential in the next 12 months.
The Takeaway
As the bear market threatens to persist throughout the year, T-Mobile, Amazon, Paypal, Alphabet, and Southwest Airlines are likely to put their unique qualities to use and ensure a relatively safe journey through the storm that possibly awaits us this year. Wall Street analysts are firm on the solid growth runway for these companies beyond the near term.
Disclosure
Amazon (AMZN) closed the most recent trading day at $87.36, moving +1.49% from the previous trading session. This change outpaced the S&P 500's 0.08% loss on the day. Elsewhere, the Dow lost 0.34%, while the tech-heavy Nasdaq added 11.55%.
Ecuador's state-run oil company Petroecuador is supplying a key Amazon oil block with planes, the firm said on Monday, as it seeks to overcome road blockades erected by a local indigenous community.
The S&P 500 index erased early gains to close nearly flat on Monday as expectations that the Federal Reserve will become less aggressive with its interest rate hikes were offset by lingering worries about inflation.
The S&P 500 index closed barely changed on Monday as expectations that the Federal Reserve will become less aggressive with its interest rate hikes were offset by lingering worries about inflation.
The Nasdaq Composite and S&P 500 indexes rose Monday afternoon, led by technology shares, on growing expectations that the Federal Reserve will become less aggressive with its interest rate hikes.
What happened
Shares of Amazon (NASDAQ: AMZN) were moving higher on Monday, up 3.1% as of 12:38 p.m. EDT, even higher than the Nasdaq, which was also having a solid day, up around 2% at the same time.
The stock market was unkind to my portfolio in 2022. Most of my stocks saw dramatic price reductions as investors backed away from growth stocks and other risky asset classes.
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