3 blue-chip stocks with more than 35% upside potential, according to Wall Street
Blue chip companies are stable industry leaders with solid finances and strong cash flow. They are known for their attractive yields, impressive growth records and growing dividends.
The stock market has been jittery lately due to growing concerns over interest rate hikes and ongoing geopolitical disputes. Increased market volatility is evident in the 90.6% rise in the CBOE Volatility Index year-to-date and 64.9% over the past three months. The current market situation has triggered strong sell-offs in growth stocks. But blue chip companies tend to perform well during economic turmoil, given their substantial cash balances to weather such market swings.
Given the backdrop, Wall Street analysts are expecting blue-chip Alphabet Inc. (GOOGL), Amazon.com, Inc. (AMZN) and Visa Inc. (V) to increase in the coming months.
Alphabet Inc. (GOOGL)
Mountain View, based in California GOOGL offers Internet-related services and products in the United States, Europe, Canada, Latin America, the Middle East and Asia-Pacific. The Company operates through three segments: Google Services; Google Cloud; and other bets. GOOGL provides technology and internet products and services, cloud-based collaboration tools, licensing, research and development services.
On December 20, 2021, GOOGL renewed a multi-year commercial agreement on similar terms with Opera Limited (RPO) to distribute Google Search in Opera browsers. The renewal of this research contract should boost the company’s profitability.
During the fourth quarter of fiscal 2021, ended December 31, 2021, GOOGL’s revenue increased 32.4% year-over-year to $75.33 billion. Its operating profit rose 39.8% year-over-year to $21.89 billion. The company’s net profit increased 35.6% from the previous year’s value to $20.64 billion, and its earnings per share rose 37.6% from its previous year’s value. the previous year at $30.69.
The consensus revenue estimate of $67.94 billion for the first quarter of its fiscal year 2022, ending March 31, 2022, represents year-over-year growth of 22.8%. The company has an impressive track record of earnings surprises, as it beat consensus EPS estimates in each of the past four quarters.
GOOGL stock has gained 24.6% over the past year and closed yesterday’s trading session at $2,542.09.
Each of the 30 Wall Street analysts who rated GOOGL rated it Buy. And the 12-month median price target of $3,499.00 indicates a Upside potential of 37.6%. Price targets range from a low of $3,000.00 to a high of $3,900.00.
Amazon.com, Inc. (AMZN)
AMZN in Seattle, Washington, is engaged in the retail sale of consumer products and subscriptions in North America and internationally. The Company operates in three segments: North America; International; and Amazon Web Services (AWS). AMZN sells electronics, merchandise, and content purchased from third-party sellers in physical and online stores. It offers programs for sellers to sell their products on its websites and stores.
In January, AMZN and Telefónica, SA (EFT) expanded their strategic collaboration for cloud development and the digital home. The collaboration is expected to unlock new opportunities in 5G, IoT, edge computing, machine learning, Industry 4.0, and video and game streaming. The deal is expected to increase the company’s customer base and revenue streams.
Total AMZN net sales increased 9.4% year-over-year to $137.41 billion in the fourth quarter of fiscal 2021, ended December 31, 2021. AMZN’s pre-tax income increased 92. 3% year over year to $14.93 billion. The company’s net profit rose 98.3% from its value a year ago to $14.32 billion. AMZN’s earnings per share rose 96.9% year-on-year to 27.75.
Analysts expect AMZN’s revenue for the first quarter of its fiscal year 2022, ending March 2022, to be $116.34 billion, a 7.2% increase from a year to year. The company has an impressive track record of earnings surprises; it has exceeded consensus EPS estimates in three of the last four quarters.
AMZN has fallen 18.4% since the start of the year. However, the 12-month median price target of $4,218.56 indicates a 55.1% upside potential compared to yesterday’s closing price of $2,720.29. Each of the 34 Wall Street analysts who rated AMZN rated it Buy. Price targets range from a low of $3,600.00 to a high of $5,000.00.
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visa inc. (V)
V in Foster City, Calif., is a leading payments technology company. It facilitates digital payments between consumers, financial institutions, merchants, businesses, strategic partners and government entities around the world. V provides value-added card products, platforms and services. It offers services under the Visa, Visa Electron, Interlink, VPAY and PLUS brands.
Last December, Visa Canada launched a new offer with CIBC and Simplii Financial to allow consumers and businesses to transfer money quickly. The collaboration could boost business growth and revenue for V.
During the first quarter of fiscal 2022, ending December 31, 2021, V’s net revenue increased 24% year-over-year to $7.06 billion. Its operating profit rose 28% year over year to $4.94 billion. The company’s net profit rose 25% from the prior year period to $3.90 billion. And V’s earnings per share rose 27% from a year ago to $1.81.
The consensus revenue estimate of $6.86 billion for its second quarter of fiscal 2022, ending March 31, 2022, represents a 19.7% year-over-year growth over the same period in 2021. Consensus EPS estimate of $1.66 for the current quarter represents 20.1% year-over-year. year-on-year growth compared to the same period last year. The company has an impressive track record of earnings surprises; it has exceeded consensus EPS estimates in each of the past four quarters.
Over the past year, V shares are down 13% in price. However, the 12-month median price target of $273.47 indicates a 42.7% upside potential from yesterday’s closing price of $191.71. And of the 19 Wall Street analysts who rated it V, 16 rated it Buy, while three rated it Hold. Price targets range from a low of $210.00 to a high of $312.00.
Shares of GOOGL were trading at $2,656.59 per share on Wednesday afternoon, up $114.50 (+4.50%). Year-to-date, GOOGL is down -8.30%, compared to a -10.13% rise in the benchmark S&P 500 over the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using its fundamental approach to stock analysis, Mangeet seeks to help retail investors understand the underlying factors before making investment decisions. Continued…