As earnings season continues, analysts are closely monitoring the impact of macro challenges on companies to gauge their long-term prospects. Netflix (NFLX) is one stock that has caught the attention of top analysts. Despite disappointing investors with the decision to stop reporting quarterly subscriber numbers, the streaming giant reported better-than-expected results for the first quarter of 2024. BMO Capital analyst Brian Pitz remains bullish on NFLX stock, reaffirming a buy rating and setting a price target of $713. Pitz points out that Netflix’s addition of 9.3 million subscribers exceeded both BMO’s estimates and the Street’s expectations, reflecting the company’s ability to grow in the U.S. market. With $17 billion of content investments planned for 2024, Netflix is well-positioned to capitalize on the decline of linear TV viewership. Pitz anticipates not only continued subscriber growth but also an improvement in operating margin and benefits from the shifting landscape of TV advertising to connected TV (CTV)/online platforms.
General Motors (GM)
Another stock favored by analysts is automaker General Motors (GM), which reported impressive first-quarter results and raised its full-year guidance on the back of strong performance in North America. Goldman Sachs analyst Mark Delaney has reiterated a buy rating on GM stock and increased the price target to $52. Delaney believes that GM’s margins will remain resilient due to cost efficiencies and firm pricing, with significant progress in electric vehicle profitability. The company expects positive variable profits from its EV business in the second half of 2024 and aims to achieve a mid-single-digit EBIT margin in 2025. Delaney is optimistic about GM’s capital allocation strategy and foresees increased capital return to shareholders in the future. These factors contribute to his positive outlook on GM’s long-term growth prospects.
Wingstop (WING)
Lastly, the restaurant chain Wingstop (WING) has garnered attention from analysts for its growth potential in both domestic and international markets. Analyst David Tarantino from Baird sees upside to Wingstop’s long-term target for the U.S. market, projecting potential growth to over 4,000 restaurants in the country. Moreover, there is room for expansion in international markets, indicating a promising future for the company’s unit growth. Tarantino maintains a buy rating on WING stock with a price target of $390, emphasizing the company’s strong unit-level cash-on-cash returns and its capital-efficient growth model. With a solid near-term operating momentum and attractive long-term growth profile, Wingstop is poised for continued revenue growth and sustained unit expansion.
These three stocks – Netflix, General Motors, and Wingstop – stand out as top picks favored by the Street’s top analysts for their strong performance, growth potential, and long-term prospects in their respective industries. Investors looking for opportunities in the stock market may find value in considering these companies based on the favorable assessments of experienced analysts.