Top Wall Street analysts say buy these stocks during a market downturn

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Jensen Huang, CEO of Nvidia, shows the NVIDIA Volta GPU computing platform at his keynote address at CES in Las Vegas, January 7, 2018.
Rick Wilking | Reuters

Even though the holiday week ended on a positive note for stocks, more volatility is likely in the cards.

All eyes are on November’s upcoming payrolls report, due out Dec. 2. Further, the Federal Reserve’s Dec. 13-14 meeting looms ahead, and investors await the central bank’s next steps on its monetary policy campaign. There is still plenty of time for stocks to churn before the year ends.

This means investors need to shift their focus toward longer-term prospects instead of fixating on near-term gyrations in the market. See below for five stocks picked by Wall Street’s top pros, according to TipRanks, a platform that ranks analysts based on their previous performance.

Nvidia

Nvidia (NVDA) has been hurting from weakening demand for its chips from the gaming and data center end markets due to the macroeconomic headwinds and supply-chain issues.

However, after the company posted its quarterly results, Susquehanna analyst Christopher Rolland noticed that Nvidia is “getting back on track.” This prompted him to reiterate a buy rating on the stock and raise the price target to $185 from $180. (See Nvidia Dividend Date & History on TipRanks)

While elevated channel inventories are still a problem, Nvidia foresees them falling back to normal levels from the next quarter onward. Other than that, Rolland was fairly satisfied with the quarterly performance and trends. Nvidia’s gross margin guidance amid lower revenue run rate impressed the analyst, who said that this “may be indicative of significantly higher ASPs (average selling price) for both new gaming and data center products.”

The analyst said that of the four major end markets (auto, datacenter, professional visualization, and gaming), at least three are expected to grow at three times the rate of the overall semiconductor market.

Rolland is ranked 26th among more than 8,000 analysts tracked on TipRanks. His track record over the past year shows a success rate of 69% and average returns of 21.8% per rating.

Marvell Technology

Another of Rolland’s stock picks is semiconductor company Marvell Technology (MRVL), which is slated to post its third-quarter fiscal 2023 results on Dec. 1. Ahead of the print, the analyst identified several dampening factors that are expected to be a near-term sore point. Keeping that in mind, Rolland trimmed the price target to $75 from $90.

The company’s nearline HDD business is expected to have remained weak in the quarter, due to a large inventory build. Overall, the analyst expects Marvell to have had a slightly disappointing quarter, despite some tailwinds from the North American rollouts of 5G infrastructure. (See Marvell Stock Chart on TipRanks)

Looking beyond the quarter, Rolland sees several upsides to Marvell. “We believe the start of India’s 5G deployments could be a positive for the narrative (with revenue to come later in 2023). Marvell’s 5G products continue to ramp at both Samsung and Nokia (two large customers), as the networking businesses at both companies beat expectations,” the analyst said.

Rolland reiterated his buy rating on the company.

Costco

Costco (COST) operates an international chain of warehouse clubs that offer branded and private items from various product categories. Recently, in light of food inflation, slowdown, and other economic forces, Bank of America analyst Robert Ohmes analyzed the company’s prospects and emerged bullish.

“We expect high food inflation to drive continued share gains for the warehouse club channel (including Costco) given the strong value proposition and price positioning on overlapping SKUs vs. mass and traditional grocery,” said Ohmes. (See Costco Website Traffic on TipRanks)

The analyst pointed out that Costco churns out more than 20 new clubs a year. Further, he expects solid trends in customer traffic and membership renewal rates to continue. Even in the international markets, continued growth in same-store sales is a positive for the company

Ohmes is ranked at No. 854 among more than 8,000 analysts on TipRanks. The analyst has delivered profitable ratings 56% of the time, and each one has generated average returns of 8.3%.

Monday.com

Earlier this month, project management tool provider Monday.com (MNDY) delivered banner quarterly results, which buoyed the confidence of investors and analysts alike. Among the Monday.com bulls was Tigress Financial Partners analyst Ivan Feinseth, who reiterated a buy rating on the stock.

Feinseth noted that the company’s performance stands to gain from consistently strong customer adoption rates. Furthermore, Monday.com’s competitive advantage lies in its low-code/no-code Work OS. He also maintains that easy integration and user-friendliness of the platform will continue to attract significant customers and boost revenue growth. (See Monday.com Financial Statements on TipRanks)

“Ongoing innovation and growth will continue to drive MNDY’s already strong brand equity together with its high-margin SaaS (Software as a Service) subscription-based revenue model will drive an ongoing acceleration in Business Performance trends which will drive an increasing Return on Capital, further gains in Economic Profit, and long-term shareholder value creation,” said Feinseth.

He is ranked 232nd among more than 8,000 analysts on TipRanks. Feinseth has issued profitable ratings 60% of the time, and each has delivered 11.3% returns on average.

Disney

Entertainment company Disney (DIS) is another stock on Feinseth’s buy list. The analyst recently reiterated a buy rating and $177 price target on the stock, mainly encouraged by the return of former CEO Bob Iger, who is expected to drive “a return to creativity dominance.”

Moreover, the solid content roster is expected to drive the company’s growth. Feinseth is also upbeat about Disney’s ongoing investments in its theme park upgrades, new technology and ongoing content development, which he thinks will continue to drive the company’s performance. (See Walt Disney Hedge Fund Trading Activity on TipRanks)

“DIS will continue to drive increasing theme park attendance with ongoing park upgrades and introductions of new attractions; the ongoing leverage of its advanced reservation system is driving capacity optimization and greater revenue yield, and its Genie and Genie+ virtual park assistant significantly increase guest experiences,” said Feinseth.

The analyst highlights Disney’s strong balance sheet, cash flow generating capabilities and practical capital-allocating strategies. These are helping the company invest in content development, new theme park attractions and other growth-driving efforts.

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