The Analysts Bring Momentum To These Markets
We like the analysts not so much for what any single one of them has to say but for the sentiment, and trend of sentiment, within the analyst’s community. The more analysts on board a market the more depth and when the analyst’s sentiment is trending higher or lower it can really move price action. That’s why we are interested in Palo Alto Networks (NYSE: PANW), Nvidia (NASDAQ: NVDA), and Google (NASDAQ: GOOGL). They are the three most upgraded stocks in 2021 and we are not surprised. Between them, they represent the better part of today’s Internet-driven world and their businesses are being fueled by strong tailwinds. If you are looking for a high-momentum stock with a positive growth outlook you could do far worse than these.
Palo Alto Networks Is The Most Upgraded Stock Of 2021
Palo Alto Networks is the most upgraded stock of 2021 with 96 upgrades (mostly in the form of price target increases) from 31 analysts. Surprisingly, the consensus sentiment is still only a weak Buy but there are two trends to consider. The first is that sentiment has been improving over the past year and the second is the Marketbeat.com consensus price target. The consensus price target of $576 is up 80% in the last 12 months and 13% in the last 90 days and trending higher. The consensus price target is only expecting about 3.5% of upside for the stock but the high price target of $675 is projecting a more robust 21%.
Palo Alto Networks next reports earnings on February 22, 2022, and we expect to see the consensus estimates move higher between now and then. The current Marketbeat.com consensus is expecting sequential growth but at a rate that made us go “meh”. On a YOY basis, the consensus is expecting a slow down to about 22% which we don’t see coming. In our view, the analysts are underestimating revenue and earnings growth.
Nvidia Is The Most Upgraded Chip Stock
Nvidia is the second most upgraded stock in 2021 and the most upgraded chip stock which is saying quite a lot. The chip sector is on fire and Nvidia is at the heart of some key trends including graphics, data center, gaming, and to a less degree cryptocurrency. Nvidia received 95 upgrades and/or price target increases last year from 32 analysts putting the Marketbeat.com consensus sentiment at a firm Buy. The consensus price target of $332 is about 13% above the current price action and is up 52% in the last 90 days alone. The high price target of $400 is also up sharply in the last 90 days and implies about 36% of upside for the stock.
Nvidia reports earnings on 2/14/2022 and is expected to post some robust numbers. The consensus for revenue is $7.42 billion for a sequential gain of 4.5% sequentially and 48% YOY and this may be an underestimation. Demand has been high in all segments and we’ve seen no sign of slacking.
Google Is A Most-Upgraded Stock
Google, excuse us Alphabet, is the third most upgraded stock for 2021 and one we see moving higher again in 2022. The company has 93 upgrades or price target increases from a total of 40 analysts for a Marketbeat.com consensus of firm Buy. The consensus price target of $3270 is about 13% above the current price action and has risen more than 80% in the last 12 months. The high price target of $3915 was set by UBS Group in early December 2021. Google reports earnings on 2/3/2021 and is expected to see robust sequential and YOY growth. The analyst’s consensus is projecting a 25% sequential increase and comes with a high probability of being too low.
Before you consider Palo Alto Networks, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Palo Alto Networks wasn't on the list.
While Palo Alto Networks currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
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