9 Upgraded Stocks to Buy in March

Analysts recommend these upgraded stocks for March.

The market’s shaky start to 2022 went from bad to worse in February as the S&P 500 sell-off continued. Heading into March, investors are concerned about the impact of Russia’s invasion of Ukraine and the possibility that the Federal Reserve will need to raise interest rates more aggressively than anticipated to get U.S. inflation in check. Despite the market volatility, the good news is that analysts remain mostly optimistic about the 2022 economic outlook, and the stock market weakness has created some fresh investment opportunities. Here are nine recently upgraded stocks to buy, according to CFRA.

Copart Inc. (ticker: CPRT)

Copart is an online vehicle auction and remarketing platform. Analyst Garrett Nelson upgraded Copart and says the stock’s risk-reward balance is bullish following a more than 22% sell-off year to date. Nelson says Copart deserves to trade at a valuation premium to auto retailer peers given the company’s impressive execution and high-margin business model. In addition, he says Copart has limited competition in the salvage auction industry, and the company’s balance sheet is solid. Nelson projects 24% revenue growth and 17% earnings per share, or EPS, growth in 2022. CFRA has a “buy” rating and $160 price target for CPRT stock, which closed at $120.84 on March 1.

Continental Resources Inc. (CLR)

Continental Resources is an onshore U.S. oil producer. Analyst Stewart Glickman upgraded the stock following Continental’s fourth-quarter earnings report. Management has guided for conservative production growth of between 0% and 5% through 2025. Glickman says Continental will generate “considerable” free cash flow in 2022 at an average WTI crude oil price of $80 per barrel. The Russian invasion of Ukraine briefly drove crude prices up to $110, creating even more of an opportunity for Continental in the near-term. Glickman is projecting 43.4% EPS growth in 2022. CFRA has a “buy” rating and $61 price target for CLR stock, which closed at $57.56 on March 1.

Visteon Corp. (VC)

Visteon is an auto industry supplier that specializes in ride performance and clean air products and systems. Nelson upgraded Visteon and says the company should report some of the strongest earnings growth in its industry in 2022. Earnings growth catalysts include new product ramps, favorable pricing and easy 2022 comparisons. Nelson says Visteon has one of the strongest balance sheets among auto suppliers, including $102 million in net cash as of the end of 2021. Nelson projects 17% revenue growth in 2022 and 13% growth in 2023. CFRA has a “buy” rating and $130 price target for VC stock, which closed at $112.01 on March 1.

Lincoln Electric Holdings Inc. (LECO)

Lincoln Electric produces arc welding equipment, consumable welding products and other welding and cutting products. Analyst Kenneth Leon upgraded Lincoln and says he believes the economy is in the early stages of an industrial expansion cycle. Leon says Lincoln has an impressive product portfolio, a strong order pipeline and additional upcoming product launches. At the same time, he says Lincoln’s customers have low inventory levels and a need for additional capacity, creating a bullish backdrop for sales growth, margin expansion and dividend hikes. CFRA has a “buy” rating and $145 price target for LECO stock, which closed at $125.47 on March 1.

BHP Group Ltd. (BHP)

BHP is the world’s largest diversified mining company and a top producer of copper, iron ore, nickel and other resources. Analyst Matthew Miller upgraded BHP and says the company’s balance sheet improvements have positioned it well to navigate future economic cycles. In addition to recent restructuring efforts, Miller says BHP has benefitted from elevated iron ore prices and Chinese demand. Miller is projecting 8.5% revenue growth in fiscal 2022, and BHP investors get paid one of the highest dividend yields in the market at more than 10%. CFRA has a “buy” rating and $82 price target for BHP stock, which closed at $68.50 on March 1.

National Retail Properties Inc. (NNN)

National Retail Properties is a real estate investment trust, or REIT, that owns single-tenant net-lease retail properties. Analyst Michael Elliott upgraded National Retail and says the company’s tenants have proven more resilient to pandemic disruptions than expected. In addition, he says the REIT’s “necessity shopping” tenants are more insulated from e-commerce cannibalization than other brick-and-mortar retailers. Finally, Elliott says National Retail tenants are under long-term leases of 10 to 20 years and are responsible for virtually all property expenses, sheltering the REIT from inflation pressures. CFRA has a “strong buy” rating and $53 price target for NNN stock, which closed at $42.31 on March 1.

Omnicom Group Inc. (OMC)

Omnicom is the world’s second-largest advertising agency. Analyst Tuna Amobi upgraded Omnicom and says he anticipates additional upside from the company’s transition to digital advertising and sees opportunities for both organic revenue growth and targeted acquisitions. Amobi says Omnicom’s fourth-quarter earnings beat was impressive. While its recent investments in data, analytics and other initiatives may pressure margins in the near term, they should ultimately pay off for long-term investors. Finally, Amobi says Omnicom’s 2022 organic revenue growth guidance of between 5% and 6% may be conservative. CFRA has a “buy” rating and $98 price target for OMC stock, which closed at $81.63 on March 1.

Performance Food Group Co. (PFGC)

Performance Food is a North American food service distributor that serves restaurants, educational and entertainment facilities and retail locations. Analyst Arun Sundaram upgraded PFGC stock and says the company has revenue growth momentum, is gaining market share among high-margin independent customers and should benefit from people returning to dining out. Sundaram says the company also has further cross-selling opportunities among its existing customers. Finally, he says Performance’s labor situation should improve in 2022 as it reduces its reliance on temporary workers and productivity among new hires improves. CFRA has a “buy” rating and $65 price target for PFGC stock, which closed at $56.06 on March 1.

Avery Dennison Corp. (AVY)

Avery Dennison produces branding labels, tags and other adhesive materials. Miller upgraded the stock and says the company has a resilient business model, free cash flow growth opportunities and a competitive moat in many of its global markets. In the long term, Miller says the two primary growth drivers for Avery Dennison will be pressure-sensitive label market expansion and deeper penetration of emerging markets. He is particularly bullish on the company’s Intelligent Labels business. Miller says higher prices and an improved product mix will expand Avery’s margins over time. CFRA has a “buy” rating and $234 price target for AVY stock, which closed at $166.94 on March 1.

Nine upgraded stocks to buy in March:

— Copart Inc. (CPRT)

— Continental Resources Inc. (CLR)

— Visteon Corp. (VC)

— Lincoln Electric Holdings Inc. (LECO)

— BHP Group Ltd. (BHP)

— National Retail Properties Inc. (NNN)

— Omnicom Group Inc. (OMC)

— Performance Food Group Co. (PFGC)

— Avery Dennison Corp. (AVY)

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