CYBR - 3 Wall Street Sweetheart Stocks Poised for More Gains
2024-07-12 06:00:00 ET
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Slice it any way you like but 2024 is set to be a record-breaking year for Wall Street favorite stocks. Fueled by the demand for AI and strong macroeconomic conditions, companies across the board are experiencing unprecedented gains. This was bolstered by an optimistic jobs report which resulted in the S&P 500 climbing 0.5% to a new all-time high. The index is already up 17% this year and we’re only just at the halfway mark.
Experts predict this economy will sustain its “ Goldilocks state” to the end of the year as consumer spending levels and inflation rates remain stable. But with share prices at an all-time high, the question is- can they go any higher?
This is where fundamentals play a big role. Investing in companies with a strong core business can insulate portfolios from the ups and downs of the market. And investors willing to set their sights further can reap the rewards of these high- growth stocks .
Walmart (WMT)
First up on the list is America’s largest retailer- Walmart (NYSE: WMT ). The company is perhaps most well-known for its wide brick-and-mortar presence and affordable prices. But in the last few years, Walmart has made some big investments in its e-commerce business.
Looking at its financials, its efforts paid off. In the last quarter, revenue was up 6% at $161.5 billion. This was primarily driven by a 21% increase in global e-commerce sales, supported by its marketplace and store-fulfilled delivery and pickups. The company expects net sales to grow by 3% to 4% for FY25.
Several analysts expressed their enthusiasm for the stock, following earnings. JP Morgan increased the WMT stock rating from Neutral to Overweight , raising its price target from $66 to $81. Analysts at the bank see strong gains ahead for Walmart and believe their estimates are in fact “beatable”. The big-box retailer will benefit from catering to value-oriented customers while generating strong returns from its advertising business and online marketplace.
WMT also has a strong buy consensus based on 29 ratings , making it one of the top Wall Street favorite stocks to get behind this year.
CyberArk Software (CYBR)
Next on the list is CyberArk Software (NASDAQ: CYBR )- a provider of identity security solutions. In an era of increasing digitization, protection from cyberattacks is more crucial than ever. CYBR caters to this need with a full suite of products to protect businesses from identity theft.
The company is also actively expanding its footprint in the cybersecurity market and recently acquired the machine identity specialist Venafi for $1.54 billion. The deal will close in the latter half of the year and will add $150 million in annual recurring revenue to CyberArk’s business.
The financials are certainly reflective of its high-growth potential. Total revenue was up 37% year-over-year to $221.6 million. This was driven by a 69% growth in subscription revenue to $156.2 million. Looking ahead, the company raised guidance across all metrics with revenues expected to rise 23% to 25% for the full year.
Wall Street analysts were singing the stock’s praises following earnings. JP Morgan maintained its Overweight rating on CYBR stock, expressing confidence in the company’s strong growth trajectory. They believe the acquisition of Venafi will help grow its position in the cybersecurity space.
Other analysts mirrored the sentiments toward the Wall Street favorite stocks, giving it a Strong buy rating .
Darden Restaurants (DRI)
Darden Restaurants (NYSE: DRI ), the parent company of Olive Garden and Longhorn Steakhouse is one of Wall Street’s top stock picks. This enthusiasm for this company stems from its recent earnings beat despite the pullback in restaurant dining. The company also issued strong guidance, suggesting higher growth levels ahead.
For the full fiscal year 2024, sales were up by 8.6% . This was fueled by the addition of 80 Ruth’s Chris Steakhouse restaurants and 37 other new restaurants. CEO Rick Cardenas attributes its success for the quarter to going back to the basics and controlling the controllables. This ultimately helped the business weather weak market conditions. For the upcoming year, Darden expects total sales to go higher between $11.8 to $11.9 billion.
Several Wall Street analysts have reiterated their optimism in the stock following earnings. JP Morgan maintained its Overweight rating , giving DRI stock a $175 price estimate. They believe Darden’s wide portfolio of brands will serve as a buffer to offset weak demand in certain restaurant chains.
Analysts at Argus Research share similar sentiments and raised DRI’s price target from $175 to $186. They assert that investments in initiatives to streamline its menus and increase delivery orders will help Darden exceed its projections.
Given its robust financial health and strategic investments in initiatives, Wall Street favorite stocks like DRI offer a compelling buying opportunity with substantial growth potential.
On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Divya has a background in finance and accounting and has worked in FP&A roles at Fortune 500 companies. She is an avid reader and enjoys writing on a variety of topics including stocks, crypto, blockchain and global policy.
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