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These stocks present the best ‘long-term opportunity’ during a recession, analysts say

Anxious investors should bolster their portfolios with stocks that have the best chance to weather the market volatility and represent good long-term buying opportunities, analysts said this week. These companies have certain characteristics that Wall Street analysts believe will allow them to come out on the other side of the turbulence. CNBC Pro combed through the best Wall Street research to find some top stocks to buy for the long term. They include ServiceNow, Pinterest , Wheels Up, Victoria’s Secret and Coinbase. Pinterest Shares of Pinterest are down 75% over the last year, but investment firm Loop Capital says dont give up on the stock just yet. “While signals are mixed and advertisers are more tentative, we see little evidence of a meaningful and broad-based pullback so far in our checks,” analyst Rob Sanderson wrote. Some near term headwinds are to be expected, the analyst said, particularly after fellow social media giant, Snap warned in late May it would miss certain earnings targets for the quarter. “While macro concerns remain elevated, we think near-term expectations are appropriate,” Sanderson added. Still, Sanderson said investors should buy Pinterest stock. The firm sees several positive catalysts that investors may not be aware of. For example, Sanderson is bullish on Pinterest’s foray into shopping on its platform. He called it an undefined yet “meaningful” opportunity. “Shopping activity and GMV (gross margin value) has expanded meaningfully in the three-years since the IPO,” he went on to say. Idea Pins, which allows users to create short story-like video sequencing clips, has dragged down revenue growth, but Sanderson sees upside over the long term. The bottom line is the “long-term opportunity remains bright,” he wrote. Coinbase Bitcoin continues to take investors on wild ride plunging more than 20% this past week to around $20,500. Meanwhile, shares of crypto company Coinbase are also down nearly 80% this year. But JMP analyst Devin Ryan, says that there’s still plenty to like about the stock despite the volatility. The firm says Coinbase remains very “well positioned to weather a very challenging moment in the market” and even pick up share from lesser competitors. “We believe crypto adoption is being tested, but not broken,” he said. Ryan reminded investors that Coinbase is really an exchange with an excellent balance sheet and almost no exposure to lending. Coinbase is one of the “best houses on the block in an uncertain time,” he wrote. Not every digital business will survive, Ryan acknowledged, but Coinbase presents a ” long-term opportunity for strong businesses to gain share and further separate themselves from the pack,” he added. The analyst said in his view that macro factors are really to blame for the recent crypto selloff. “Ultimately, the current environment underscores the value of businesses that can provide safety and soundness in difficult market conditions,” Ryan wrote. Coinbase is the right stock at the right time, the firm said. Wheels Up Goldman Sachs is doubling down on shares of the private aviation company. The firm began coverage of the stock earlier this week with a buy rating and a price target of $5 per share. Demand remains robust for Wheels Up services and analyst Noah Poponak called the total addressable market “significant.” “The pandemic has proven a catalyst to accelerating adoption of private travel, & as Wheels Up scales its business model and benefits from technological efficiency, it can unlock even more demand through smart supply & dynamic pricing,” he wrote. However, Investors will need to stay patient and look past any near-term headwinds, the analyst said. Shares are down almost 44% this year and Poponak sees an “attractive entry point.” “The business has significant expansion potential to normalized margins and cash flow, which are not that far away,” he said. The market is unnecessarily skeptical over the long-term adoption of private jets, the firm added. “Large long-term opportunity,” Poponak exclaimed. Victoria’s Secret- Jefferies, Buy rating “VSCO is on a path to recovery, with sales momentum gaining and brand sentiment improving. While the company’s initiatives are working, near-term top-line trends are partly pressured by supply chain headwinds, which may obscure underlying brand recovery efforts. While we do not expect a linear recovery, we believe VSCO’s long-term opportunity remains unchanged, and we think VSCO is capable of restoring lost sales while recapturing margin.” Pinterest- Loop, Buy rating “Long-Term Opportunity Remains Bright. … .While signals are mixed & advertisers are more tentative, we see little evidence of a meaningful & broad-based pullback so far in our checks. … .While signals are mixed & advertisers are more tentative, we see little evidence of a meaningful and broad-based pullback so far in our checks. … .While macro concerns remain elevated, we think near-term expectations are appropriate. … .Shopping activity and GMV has expanded meaningfully in the three-years since the IPO.” ServiceNow- Deutsche Bank, Buy rating “We attended ServiceNow’s Knowledge 2022 user conference and financial analyst day in Las Vegas last week and come away feeling good about the company’s longterm opportunity and relative strength in a tough backdrop. As multiple Software companies begin showing signs of macro deterioration, ServiceNow is thus far holding strong, which appears the result of multiple forces.” Wheels Up- Goldman Sachs, Buy rating “Significant TAM opportunity. … .The pandemic has proven a catalyst to accelerating adoption of private travel, and as Wheels Up scales its business model and benefits from technological efficiency, it can unlock even more demand through smart supply and dynamic pricing. … .The business has significant expansion potential to normalized margins and cash flow, which are not that far away. … .Large long-term opportunity.” Coinbase- JMP, Market outperform rating We believe crypto adoption is being tested, but not broken. … .these moments represent a long-term opportunity for strong businesses to gain share & further separate themselves from the pack. Confidence in the platform is still required to support an investment in COIN shares, but we note that the company is incredibly liquid one of the best houses on the block in an uncertain time & we currently believe COIN remains well positioned to weather a very challenging moment in market & potentially even pick up market share from weaker competitors that are underprepared for a market downturn. … .Ultimately, the current environment underscores the value of businesses that can provide safety & soundness in difficult market conditions.”

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