The Federal Reserve’s aggressive policy tightening to control the multi-decade high inflation has increased the odds of a recession. Investors’ concerns over a likely recession have led the markets to witness immense volatility, making it difficult for investors to determine the right entry point in stocks.
Although the market’s downtrend is not expected to reverse anytime soon, fundamentally-sound, blue-chip stocks should offer stable returns because of their broader market reach, strong pricing power, and ample liquidity.
Wall Street analysts expect blue-chip companies Meta Platforms, Inc. (META), Advanced Micro Devices, Inc. (AMD), and The Boeing Company (BA) to surge more than 50% in the upcoming months. So, it could be wise to add them to your watchlist.
Meta Platforms, Inc. (META)
With a $460.51 billion market capitalization, META develops social media applications to connect through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide.
The company operates through two segments ─ Family of Apps (FoA); and Reality Labs (RL). Its products include Facebook, Instagram, Messenger, WhatsApp, and Oculus.
On May 10, 2022, Canada-based Algonquin Power & Utilities Corp.’s (AQN) Liberty business expanded its collaboration with META on the new 112 MW Deerfield II wind project in Michigan. Expected to start in 2023, this project will help META continue to support its operations with 100% renewable energy.
META’s revenue for its fiscal 2022 first quarter ended March 31, 2022, increased 6.6% year-over-year to $27.91 billion. As of March 31, 2022, the company had $14.89 billion in cash and cash equivalents.
Analysts expect the company’s revenue to hit $126.31 billion for fiscal 2022 ending December 31, 2022, representing a 7.1% rise from the prior-year period. It surpassed Street EPS estimates in three of the trailing four quarters. META’s EPS is expected to grow at a 7.5% rate per annum over the next five years.
Over the past week, the stock has gained 3.9% to close the last trading session at $170.16. The average price target of $271 indicates a 59.3% upside potential.
Advanced Micro Devices, Inc. (AMD)
AMD manufactures microprocessors, chipsets, GPUs, server and embedded processors, semi-custom System-on-Chip (SoC) products, and technology for game consoles and offers assembly, testing, and packaging services.
The company serves OEMs, ODMs, public cloud service providers, system integrators, independent distributors, online retailers, and add-in-board manufacturers through its direct sales force, independent distributors, and sales representatives. It has a $141.11 billion market capitalization.
On June 21, 2022, AMD announced the Ryzen Embedded R2000 Series, second-generation mid-range SoC processors optimized for various industrial and robotics systems, machine vision, IoT, and thin-client equipment.
Delivering significant performance uplift, optimized power, and better graphics compared to the prior generation, this new series is expected to witness high demand in the coming months.
AMD’s revenue for its fiscal 2022 first quarter ended March 26, 2022, increased 70.9% year-over-year to $5.89 billion. The company’s non-GAAP gross profit came in at $3.10 billion, up 95.2% from the year-ago period.
Its non-GAAP operating income came in at $1.84 billion for the quarter, indicating a 141.1% rise from the prior-year period. While its non-GAAP net income increased 147.5% year-over-year to $1.59 billion, its non-GAAP EPS grew 117.3% to $1.13. The company had cash and cash equivalents of $4.74 billion as of March 26, 2022.
The consensus EPS estimate of $4.41 for its fiscal 2022 ending December 31, 2022, represents a 15.5% year-over-year improvement. It surpassed the consensus EPS estimates in each of the four trailing quarters, which is impressive.
Analysts expect the company’s revenue to reach $26.33 billion for the same fiscal year, indicating a 60.2% rise from the prior-year period. AMD’s EPS is expected to grow at a 32.8% rate per annum over the next five years.
Over the past week, the stock has gained 6.8% and closed the last trading session at $87.08. The average price target of $136.71 indicates a 57% upside potential.
The Boeing Company (BA)
BA designs, manufactures, and sells commercial jetliners, military aircraft, satellites, missile defense systems, human space flight, and launch systems and services worldwide.
The company operates through Commercial Airplanes (BCA); Defense, Space & Security (BDS); Global Services (BGS); and Boeing Capital (BCC) segments.
On June 23, 2022, BA announced to receive the flight data stream provided by Aireon, a provider of space-based automatic dependent surveillance-broadcast (ADS-B) services, to expand its advanced data analytics capabilities and further strengthen commercial air travel safety. This will help BA enhance its enterprise Safety Management System (SMS), proactively identify hazards, and monitor emerging safety trends.
As of March 31, 2022, BA had $7.41 billion in cash and equivalents. Analysts expect BA’s EPS to improve 19.8% from the prior-year period to $74.64 billion for its fiscal 2022 ending December 31, 2022. The company’s EPS is expected to grow at a 20.2% rate per annum over the next five years.
Over the past week, the stock has lost 1.8% to close the last trading session at $141.53. The average price target of $213.27 indicates a 50.7% upside potential.
META shares were trading at $169.97 per share on Monday afternoon, down $0.19 (-0.11%). Year-to-date, META has declined -49.47%, versus a -17.55% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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