Analysts recommend these upgraded stocks for November.
The S&P 500 rebounded from its 2022 lows in October but was down more than 18% this year by the beginning of November trading. The Federal Reserve raised interest rates by another 75 basis points in September as it continues to battle inflation. The higher interest rates rise, the more difficult it becomes for S&P 500 companies to grow earnings. In fact, many economists now fear a recession is just around the corner. Fortunately, analysts say the chaotic macroeconomic environment has created a handful of fresh investment opportunities in the market. Here are nine recently upgraded stocks to buy, according to CFRA.
Las Vegas Sands Corp. (ticker: LVS)
Las Vegas Sands is an international casino and resort operator with operations in Las Vegas, Macao and Singapore. Analyst Zachary Warring upgraded Las Vegas Sands and says the stock has an attractive valuation given the potential for further pent-up consumer travel and gambling demand in 2023. The Macao and Singapore markets are still suffering from travel restrictions and COVID-19 lockdowns. However, Warring says he expects some of the regulatory overhang in Macao related to an ongoing government review of gambling laws to ease in coming quarters. CFRA has a “buy” rating and $43 price target for LVS stock, which closed at $38.01 on Oct. 31.
Webster Financial Corp. (WBS)
Webster Financial is a U.S. regional bank that operates in New England. Analyst Alexander Yokum says Webster’s loan growth has been impressive and its efficiency has improved significantly. Yokum says Webster’s merger with Sterling Bancorp will help the bank expand its geographical footprint and broaden its deposit base. While Webster faces some execution risks related to merger-related systems conversion in mid-2023, Yokum says the bank is well positioned to navigate a potential recession and should expand net interest margin over the next five quarters. CFRA has a “buy” rating and $59 price target for WBS stock, which closed at $54.26 on Oct. 31.
Pinterest Inc. (PINS)
Pinterest is a large social media platform organized around user interests. Analyst Angelo Zino upgraded the stock and says the company has opportunities to further monetize its users. In addition, Zino says Pinterest’s issues with user and engagement growth are now fully reflected in the stock price following its 62% decline over the past 12 months. He says shopping-related ad product growth has been particularly strong and new video formats now represent 10% of sales. Pinterest is generating double-digit growth in Generation Z users, which is an attractive demographic for advertisers. CFRA has a “strong buy” rating and $28 price target for PINS stock, which closed at $24.60 on Oct. 31.
Wolfspeed Inc. (WOLF)
Wolfspeed develops and produces silicon carbide semiconductor materials and other advanced materials and devices. Analyst Keven Young upgraded Wolfspeed and says the company’s renewed focus on high-growth businesses will help it increase its gross margins by 12% by 2025. In addition, Young says the shift to electric vehicles and deployment of 5G wireless networks will drive silicon carbide and gallium nitride demand. He says Wolfspeed will have a “dominant market share” of the silicon carbide market, which will represent 20% of the power market by 2027. CFRA has a “strong buy” rating and $140 price target for WOLF stock, which closed at $78.75 on Oct. 31.
PepsiCo Inc. (PEP)
PepsiCo is a global international producer of branded nonalcoholic drinks and snacks. Analyst Garrett Nelson upgraded PepsiCo and says the company is a low-volatility, defensive blue-chip investment that has a strong balance sheet and stable earnings in an uncertain economic environment. In addition, Nelson says PepsiCo’s valuable brands, including Frito-Lay, Gatorade and Mountain Dew, may provide pricing leverage that can help the company offset inflationary costs. He says Frito-Lay snack sales and international expansion will be the primary long-term growth drivers for PepsiCo. CFRA has a “strong buy” rating and $190 price target for PEP stock, which closed at $181.58 on Oct. 31.
CSX Corp. (CSX)
CSX is a railroad company that operates a network of about 20,000 miles of routes in the eastern U.S. Analyst Colin Scarola upgraded CSX and says the stock has an attractive valuation and a healthy long-term growth outlook. Scarola says international demand for U.S. agricultural and energy exports will be a bullish long-term catalyst for CSX. In addition, rising fuel prices and truck driver shortages make rail transport an appealing transportation option for domestic U.S. businesses. Scarola projects 4.6% revenue growth in 2023. CFRA has a “buy” rating and $33 price target for CSX stock, which closed at $29.06 on Oct. 31.
Accenture PLC (ACN)
Accenture is a company that provides consulting, technology and outsourcing services. Analyst David Holt upgraded the stock and says Accenture is a high-quality investment with a business model that is resistant to economic downturns. Holt says Accenture has a resilient customer base, an attractive balance sheet and a long-term track record of above-average earnings growth relative to peers. He says Accenture will continue to gain market share over the long term and has a differentiated growth outlook given its exposure to secular technology trends. CFRA has a “buy” rating and $333 price target for ACN stock, which closed at $283.90 on Oct. 31.
McCormick & Co. Inc. (MKC)
McCormick produces spices, seasoning mixes, condiments and other flavor enhancers for food retailers, manufacturers and food-service businesses. McCormick’s stock is down 18.6% year to date as of Oct. 31 and has significantly lagged behind packaged food peers, but analyst Arun Sundaram upgraded McCormick and says the recent weakness is an attractive buying opportunity. Sundaram says margins will improve in fiscal 2023 following McCormick’s price hikes and cost cuts. In addition, he says the company will generate at least high-single-digit earnings growth over time, outpacing the growth of most other industry competitors. CFRA has a “buy” rating and $81 price target for MKC stock, which closed at $78.64 on Oct. 31.
Patterson-UTI Energy Inc. (PTEN)
Patterson-UTI Energy is a U.S. oil and gas drilling company that provides U.S. land drilling services. Analyst Jonnathan Handshoe upgraded the stock. He says energy exploration and production spending will likely increase by more than 25% in fiscal 2022 and another 10% in fiscal 2023 given increased oil demand and elevated oil and gas prices. Handshoe says Patterson is still in the early stages of a multiyear recovery and projects the company is on track to generate full-year revenue growth of 84.6% in 2022. CFRA has a “buy” rating and $18 price target for PTEN stock, which closed at $17.65 on Oct. 31.
9 upgraded stocks to buy in November:
— Las Vegas Sands Corp. (LVS)
— Webster Financial Corp. (WBS)
— Pinterest Inc. (PINS)
— Wolfspeed Inc. (WOLF)
— PepsiCo Inc. (PEP)
— CSX Corp. (CSX)
— Accenture PLC (ACN)
— McCormick & Co. Inc. (MKC)
— Patterson-UTI Energy Inc. (PTEN)
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9 Upgraded Stocks to Buy in November originally appeared on usnews.com
Update 11/01/22: This story was previously published at an earlier date and has been updated with new information.
