Analysts recommend these upgraded stocks in April.
The S&P 500 churned higher in March, reaching a new all-time high on investor optimism surrounding the near-term impact of a $1.9 trillion stimulus package and the longer-term possibility of a sharp U.S. economic rebound. The S&P 500 is up more than 70% since it hit its pandemic low in March 2020. The good news for investors who missed last year’s fire sale is that analysts still see plenty of buying opportunities. Here are nine stocks to buy that were recently upgraded by the CFRA analyst team.
Vail Resorts (ticker: MTN)
Vail Resorts owns ski resorts located primarily in Colorado, California, Nevada and Utah. Analysts say leisure travel will rebound sharply in 2021 due to pent-up demand, particularly in the second half of the year. Vail Resorts says its visitation metrics are already trending higher in early 2021. Analyst Tuna Amobi recently upgraded Vail and says the vaccine rollout is a bullish near-term catalyst for the stock. Amobi projects that Vail’s earnings per share will recover from just 67 cents in fiscal 2021 to $6.91 in fiscal 2022. CFRA has a “buy” rating and a $360 price target for MTN stock.
NICE provides applications for managing call center operations, customer interactions, fraud detection and regulatory compliance. Analyst John Freeman upgraded the stock and says the company has three secular growth drivers that should generate long-term upside for investors. First, trends suggest the global call center business is migrating to the cloud. Second, deep learning software is improving natural language processing to include variables such as tone of voice and language choice. Finally, Freeman says NICE is an early leader in robotic process automation, a tremendous long-term opportunity. CFRA has a “strong-buy” rating and a $283 price target for NICE stock.
Synopsys supplies electronic design automation software that semiconductor producers use to design and test their chips. Freeman upgraded the stock and says Synopsys has both an attractive valuation and compelling long-term earnings and revenue growth outlooks. Freeman says semiconductor complexity will continue to rise indefinitely, making both the company’s EDA business and its design business increasingly important for customers. Freeman says Synopsys is the market leader in EDA with about 28% market share, which provides significant pricing leverage. He says operating margins will exceed 40% by fiscal 2025. CFRA has a “strong-buy” rating and a $300 price target for SNPS stock.
Spotify Technology (SPOT)
Spotify is the world’s largest streaming music subscription service and holds more than 36% market share. Freeman upgraded Spotify and says the stock is much more than a music and radio disrupter. Spotify is attempting to create an entirely new media and services category that includes music, podcasts, news, talk shows, lectures and other content types. Freeman says Spotify’s user engagement helps set it apart from competing platforms. In the near term, he says Spotify needs to demonstrate its profitability potential to reassure investors of its long-term bull case. CFRA has a “buy” rating and a $300 price target for SPOT stock.
ServiceNow provides software-as-a-service applications used for business process and workflow automation. Freeman upgraded ServiceNow and says the company should benefit from secular growth in enterprise digital transformation and cloud migration. ServiceNow also has a valuable and growing network of third-party customers and partners. Freeman says the company’s business model has innate operating leverage, and ServiceNow has long-term margin expansion opportunities. The deeper ServiceNow’s apps are integrated into customer workflows, the more valuable and stickier they become. ServiceNow has an opportunity to expand its core offerings. CFRA has a “strong-buy” rating and a $648 price target for NOW stock.
Cheniere Energy (LNG)
Cheniere Energy produces liquefied natural gas and operates liquefaction terminals along the U.S. Gulf Coast. Investors and analysts expect that inflation could provide a tailwind for commodity prices in 2021. Analyst Stewart Glickman upgraded Cheniere and says the stock is an excellent way for long-term investors to bet on a rise in international natural gas trading. Chenier also has several major growth projects nearing completion, which Glickman says will help the company boost its free cash flow and reduce its debt burden. CFRA has a “buy” rating and an $85 price target for LNG stock.
American Eagle Outfitters (AEO)
American Eagle Outfitters is a retailer of casual apparel and accessories geared toward shoppers under age 25. Analyst Camilla Yanushevsky says American Eagle is a top-tier retail rebound play in 2021. However, Yanushevsky says the company’s Aerie brand performance has been “exceptional” throughout the downturn, and she says the company’s goal of doubling Aerie sales to $2 billion by 2023 is achievable. Yanushevsky says American Eagle is well positioned to gain market share in coming years despite a potential secular decline in mall traffic. CFRA has a “buy” rating and a $33 price target for AEO stock.
Las Vegas Sands Corp. (LVS)
Las Vegas Sands is a casino operator focused on the Macao, China and Singapore markets. Amoi upgraded Sands in early March after the company announced a $6 billion sale of its Venetian casino resort and Sands Expo and Convention Center in Las Vegas. Amobi says the asset sale improves the company’s balance sheet and allows it to exit a Vegas market still plagued by a sharp decline in corporate event budgets. Amobi says Sands is now free to focus on the gradual, long-term recovery in Asian casino markets. CFRA has a “buy” rating and a $74 price target for LVS stock.
Target Corp. (TGT)
Discount retailer Target has performed well in a difficult retail environment since the beginning of 2020. However, even as Target approaches difficult year-over-year comparisons, analyst Garrett Nelson has upgraded the stock. Nelson says Target will benefit from the one-two punch of another round of stimulus payments and pent-up retail spending demand in 2021. He says consensus analyst same-store sales growth expectations are too bearish, and Target is a blue-chip U.S. retailer with a strong balance sheet and a fair valuation. CFRA has a “buy” rating and a $225 price target for TGT stock.
Nine upgraded stocks to buy in April:
— Vail Resorts (MTN)
— NICE (NICE)
— Synopsys (SNPS)
— Spotify Technology (SPOT)
— ServiceNow (NOW)
— Cheniere Energy (LNG)
— American Eagle Outfitters (AEO)
— Las Vegas Sands Corp. (LVS)
— Target Corp. (TGT)
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Update 04/02/21: This story was published at an earlier date and has been updated with new information.