Analysts recommend these upgraded stocks for August.
The S&P 500 bounced back from its disappointing first half of 2022 with a big gain in the month of July. Heading into August, investors are optimistic that inflation may have finally peaked following back-to-back 0.75-percentage-point Federal Reserve interest rate hikes in June and July. Despite the year-to-date market volatility, analysts remain mostly optimistic about the U.S. economic outlook in the second half of 2022 and beyond. In fact, analysts say the chaotic macroeconomic environment has created a handful of fresh investment opportunities. Here are nine recently upgraded stocks to buy, according to investment research firm CFRA.
The Interpublic Group of Cos. Inc. (ticker: IPG)
The Interpublic Group of Companies is a global advertising and communications company. Analyst Siye Desta upgraded Interpublic and says the stock is currently undervalued based on concerns about how a U.S. recession could negatively impact advertising spending. Desta says advertising spending could be more resilient than the market expects given marketers may be hesitant to cut ad spending at the expense of sales. In addition, Desta says Interpublic has a strong balance sheet and plenty of liquidity. The stock also pays a 3.9% dividend. CFRA has a “buy” rating and $35 price target for IPG stock, which closed at $29.39 on August 2.
Nokia Corp. (NOK)
Nokia Corp., also known as Nokia Oyj in Finland, is a global telecom equipment and digital map data vendor that also licenses intellectual property to third parties. Analyst Jun Zhang Tan upgraded Nokia and says 5G investments in North America and China are significant tail winds for the stock. Tan says Nokia will benefit from a longer and larger 5G investment cycle than previous wireless upgrade cycles. Inflation and supply chain constraints will remain headwinds for Nokia, but he says the stock is a buy given Nokia’s recent earnings outperformance and forward visibility. CFRA has a “buy” rating and $6.50 price target for NOK stock, which closed at $5.15 on August 2.
Nasdaq Inc. (NDAQ)
Nasdaq is a leading global stock exchange group that provides trading, clearing, securities listing and other services for public companies around the world. Analyst Alexander Yokum upgraded the stock and says the company’s recent Verafin acquisition helps boost Nasdaq’s anti-fraud and money laundering offerings. He says the company’s transition to a more data and analytics-focused business is bullish for the stock as it shifts to a business model that emphasizes subscription and recurring revenue. Yokum says this transition will boost growth, expand margins and reduce volatility. CFRA has a “buy” rating and $194 price target for NDAQ stock, which closed at $178.69 on August 2.
Welltower Inc. (WELL)
Welltower is a health care real estate investment trust, or REIT, that owns senior health care properties, specialty care facilities and medical office buildings. Analyst Michael Elliott upgraded Welltower and says the REIT’s outlook will continue to improve in the second half of 2022 as occupancy rates rise and pricing power improves. Elliott says COVID-19-related risks are subsiding, and favorable supply-demand dynamics are emerging in the senior housing market. Welltower has outperformed the S&P 500 in 2022, and Elliott is projecting at least 21% revenue growth this year. CFRA has a “buy” rating and $91 price target for WELL stock, which closed at $83.67 on August 2.
Marvell Technology Inc. (MRVL)
Marvell Technology is a fabless semiconductor company headquartered in Bermuda that provides silicon solutions for the data storage, communications and consumer markets. Analyst Angelo Zino upgraded Marvell and says the high-growth semiconductor stock is trading at just 16 times CFRA’s 2023 earnings forecast, making it the cheapest “growth at a reasonable price” semiconductor stock the firm covers. Zino projects an impressive 25% long-term earnings-per-share growth rate and says Marvell is well-positioned to grow revenue even in a potential cyclical downturn in the chip market. CFRA has a “strong buy” rating and $60 price target for MRVL stock, which closed at $55.71 on August 2.
Corning Inc. (GLW)
Corning produces glass substrates for the electronics industry and fiber optics equipment for the telecommunications industry. Analyst Keven Young upgraded Corning and says the company is exposed to bullish long-term trends in optical communications. In addition, he says auto market demand is beginning to recover. Young says Corning has a strong balance sheet and should benefit from positive trends in smartphone content growth. He projects 9% revenue growth for Corning in 2022 and 5% growth in 2023. Finally, Young says Corning should benefit from positive trends in the life sciences market. CFRA has a “strong buy” rating and $47 price target for GLW stock, which closed at $36.11 on August 2.
Entegris Inc. (ENTG)
Entegris provides specialty chemical and material integrity solutions for customers in the microelectronics and life science markets. Young also upgraded Entegris and says the stock is undervalued based on its potential to expand its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margins to 32% following its acquisition of CMC Materials. Young says the acquisition will boost earnings and bring recurring consumables-driven revenue up to 80% of Entegris’ total revenue. In addition, semiconductor equipment demand is booming, and Entegris’ order volume is strong. CFRA has a “strong buy” rating and $155 price target for ENTG stock, which closed at $104.80 on August 2.
Helmerich & Payne Inc. (HP)
Helmerich & Payne is an international oil and gas drilling company. Analyst Jonnathan Handshoe says the strong North American market accounts for more than 90% of Helmerich & Payne’s total revenue. WTI crude oil prices are up 32% year to date, and Handshoe says soaring oil and gas prices will drive exploration and production spending growth and potentially increase Helmerich & Payne’s total contracted rigs by 41% in 2022. Handshoe says an uptick in onshore drilling, improving utilization and spot market trends are tail winds for Helmerich & Payne investors. CFRA has a “buy” rating and $53 price target for HP stock, which closed at $44.72 on August 2.
Signet Jewelers Ltd. (SIG)
Signet Jewelers is one of the world’s largest diamond jewelry retailers. Desta upgraded Signet and says the company’s balance sheet has positioned it to either explore potential acquisitions or return a significant amount of capital to shareholders in 2022. Desta says Signet is better-positioned to maintain its profit margins given acquisition synergies and a strong operating model. He says rebounding wedding demand will offset headwinds from rising freight and wage costs. Desta projects revenue growth of 4.8% in fiscal 2023 and 3.5% in fiscal 2024. CFRA has a “buy” rating and $125 price target for SIG stock, which closed at $61.48 on August 2.
9 upgraded stocks to buy in August:
— The Interpublic Group of Cos. Inc. (IPG)
— Nokia Corp. (NOK)
— Nasdaq Inc. (NDAQ)
— Welltower Inc. (WELL)
— Marvell Technology Inc. (MRVL)
— Corning Inc. (GLW)
— Helmerich & Payne Inc. (HP)
— Signet Jewelers Ltd. (SIG)
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Update 08/03/22: This story was published at an earlier date and has been updated with new information.