Wall Street’s top analysts are betting on buy-rated stocks like DraftKings and Etsy right now

Boosted by fresh stimulus hopes, the markets have rallied this week. But the overall picture remains one of volatility and uncertainty. As yet no stimulus deal has actually been agreed, and with so many different factors at play (with the coronavirus vaccines, and upcoming elections) it’s not easy to pinpoint stocks poised to outperform.



a police car parked in a parking lot: An employee pulls carts towards a Walmart store in Lakewood, California, July 16, 2020.


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An employee pulls carts towards a Walmart store in Lakewood, California, July 16, 2020.

One way to find the most compelling investing opportunities is to follow the latest stock recommendations from analysts with a proven track record of success. TipRanks analyst forecasting service attempts to pinpoint Wall Street’s best-performing analysts. These are the analysts with the highest success rate and average return measured on a one-year basis — factoring in the number of ratings made by each analyst. 

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What’s more all six stocks covered below don’t just have the support of one top analyst. These stocks all score a ‘Strong Buy’ Street consensus on TipRanks, based on all the top analyst ratings published over the last three months.

Here are the best-performing analysts’ six favorite stocks right now:

DraftKings

Five-star Needham analyst Brad Erickson has just initiated coverage of sports betting giant DraftKings. He kicked off his coverage with a buy rating and $70 price target.

“We view DKNG as one of the leading beneficiaries as online sports betting and gambling take off in the U.S. – an opportunity we size between $42 and $58 billion annually longer-term” the analyst stated on September 30.

Looking forward, he expects the regulatory tailwind to persist and believes online providers’ access to data creates a structurally better user experience vs. brick & mortar.

“Thanks to DKNG’s data-centric approach to customer acquisition and its leading brand & marketing approach, we believe the company could

Analysts worry about UK 5G support in ‘iPhone 12’

Members of the UK’s telecommunications industry are concerned that support for the country’s 5G networks may be limited in the upcoming “iPhone 12” release, with fears it may not include support for 700MHz networks.

It is believed 5G will be an important feature for the 2020 iPhone range, with the new communications technology promising high speed connectivity to consumers. However, Apple’s popular iPhone may cause issues for some carriers, depending on Apple’s implementation of the technology.

According to analysts speaking to The Telegraph, if Apple elects to not include support for 700MHz 5G bands, this could prevent it from working fully with carriers that build out their networks using it. Carriers are expected to take part in a 700MHz spectrum auction set to take place in early 2021, organized by national regulator Ofcom.

Carriers had the opportunity to reuse existing unused spectrum they own for 5G communications, as well as to repurpose bands already in use for the same purpose, but most elected to wait for the auction to acquire more. The problem is that carriers are already at capacity with their existing allocations.

The exception to the carriers is apparently Three, as the company already owns a considerable amount of 5G spectrum in bands that are expected to be usable by the iPhone. In the event 700MHz bands aren’t supported by Apple, this would hand Three a sizable advantage in the UK.

This would be a similar situation to one that took place during the launch of the iPhone 5, with carrier EE the only one in the market with sufficient 4G coverage to be reliable.

After the auction, the rollout of 700MHz 5G networks will be “quite quick” according to 5G analyst Simon Rockman, “because the networks really, really need it.”

Morgan Stanley Analysts Reiterate $245 Price Target, See Promising Future in Microsoft’s Gaming Business

On Thursday, Morgan Stanley analysts reiterated their Overweight rating on Microsoft (MSFT) with a $245 price target. The analysts see great upside for Microsoft ahead of new Xbox console launches and following the $7.5B acquisition of game developer and publisher Bethesda Softworks.

The long-awaited release of the Xbox Series X/S console is approaching quickly. As expected, Microsoft should experience an uptick in hardware sales driven by the increase of “work/stay/play at home” activities from consumers. “The increase in gaming hardware revenue in FY21 vs.FY20 of $779 million in our model is already pressuring our existing FY21 gross margin estimates by ~35bps”, stated by Morgan Stanley analysts.

The analysts further noted: “Microsoft’s revenue base has grown meaningfully since (MSe $156 billion revenue in FY21 vs $110 billion in FY18), thus making the margin dilutive effect less meaningful now, in our view. Despite this modest gross margin headwind, we look for FY21 gross margins to expand YoY to 69%, ahead of consensus at 68.3%.”

Gross margin fears shouldn’t be as bad as feared with the analysts commenting that “broader gross margin expansion in FY21 remains underappreciated”. FY21 Gross Margins will benefit from accounting changes and continued Azure improvements.

The accounting changes include a ~$2.7 billion benefit to COGS from lower depreciation expenses in FY21. This will tackle Commercial Cloud gross margin, a big concern that investors had come into the fiscal year. This will benefit Azure margins in the coming years, estimated to go from 56.2% in 2020 to 65.0% in 2021. Beyond FY21, analysts expect to see a more measurable pace of expansion supported by growth in Dynamics and Gaming Softwares/Services.

In addition, the argument can be made that the $7.5B Bethesda Softworks acquisition is a justifiable price tag. With the growing Xbox Live community and Game Pass ecosystem, Microsoft’s strategy

Wall Street’s top analysts are unanimously bullish on stocks like Amazon and CarMax

How can you find compelling investing opportunities in the current environment? With market volatility set to rise in the coming weeks, it’s best to be prepared. October is a notoriously volatile month, and this week’s heated presidential election debate did little to calm the markets — especially with the looming prospect of a contested election result down the line.



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However, there are still stocks out there ready to outperform — you just have to find them. One possible way forward is to follow stock recommendations from analysts with a proven track record of success. TipRanks analyst forecasting service reveals the analysts with the highest success rate and average return measured on a one-year basis — factoring in the number of ratings made by each analyst. 

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Most importantly, the stocks highlighted below have scored only buy ratings from these top analysts in the last three months. No holds, no sells. That means these stocks boast a unanimously bullish Street outlook right now.

Here are the best-performing analysts’ six favorite stocks right now:

Amazon

With no less than 36 recent buy ratings from top analysts, it’s clear that Amazon is riding a wave of bullish Street sentiment right now. After an upgrade from Bernstein’s Mark Shmulik on September 22, the stock scores a clean slate of buy ratings across the board.  

Shmulik boosted his rating after admitting that he “undervalued the power of being the sole e-commerce demand aggregator.” Covid has pulled forward secular trends, says Shmulik, from e-commerce to digital advertising and cloud, with Amazon a primary beneficiary across all three revenue pools. 

At the same time, Amazon’s logistics strength is a key upside driver worth highlighting. “We believe investors under-appreciate the magnitude of the strategy behind, & the implications of, the dramatic buildout in

Analysts Reiterate Overweight Rating on Abbott Laboratories following European Approval of Freestyle Libre 3

On Monday, J.P. Morgan and Morgan Stanley reiterated their Overweight ratings on Abbott Laboratories (ABT). The company’s newest continuous glucose monitor (CGM), the Freestyle Libre 3, recently received a CE mark of approval. The system has shown to be a major evolutionary improvement over the current Libre 2 which leads analysts to believe that there are multiple long-term growth opportunities for Abbott.

The next-gen Libre CGM, Libre 3 will leverage Bluetooth technology to have continuous, real-time glucose readings automatically delivered to your smartphone every-minute (vs user scanning required in the past) allowing for unsurpassed 14-day accuracy and a ~70% size reduction from the Libre 1 & 2, becoming the world’s smallest and thinnest sensor.

The FreeStyle Libre 3 system was designed to fit perfectly into people’s everyday lives, allowing users to check their glucose as often as they like by just looking on their phones. This innovation allows the users to live a more comfortable life and gain a deeper understanding of their glucose levels with the real-time data given by the smartphone. The cost of the FreeStyle Libre 3 will also be the same as previous generations of the device.

The Senior Vice President of Diabetes Care for Abbott Laboratories mentioned, “Abbott won’t stop innovating when there’s room to raise the bar. We’ve done that again with FreeStyle Libre 3, the smallest sensor that delivers life-changing benefits and best-in-class accuracy,”.

The transition from Abbott’s current system to its next-gen Libre CGM, Libre 3, shouldn’t require any extra hassle. The Libre 3 system will have identical algorithms and chemistry compared to the Libre 2.

As highlighted by the analysts at JPMorgan, the ”Libre 3 essentially adds three things: (1) it shrinks Libre’s already small footprint to the size of two stacked pennies. The approval is for wear on the arm,