Third-quarter earnings season is drawing to a close as we come to the end of November. That means that analysts up and down Wall Street are revising their ratings and price targets on various stocks after the companies behind them either exceeded expectations or struck out with their Q3 financial results. Analyst ratings matter, if for nothing else than to provide an indication of sentiment surrounding a company and stock. Are the ratings bullish or bearish? Is the stock price due to rise or fall over the next 12 months? And what are the trends driving a share price higher or lower? All of these questions can be answered by looking at the ratings and forecasts that analysts place on stocks. So which equities are analysts enthusiastic about coming out of Q3 earnings season? Here are seven top-rated blue-chip stocks that analysts are loving now.
Applied Materials (AMAT)
Legacy tech company Applied Materials (NASDAQ:AMAT) caught numerous analyst upgrades after its third-quarter print, including at JPMorgan Chase (NYSE:JPM) which raised its price target on AMAT stock to $170 a share from $165 and maintained an “overweight” (buy) rating on the shares. The upgrade came despite news reports that the semiconductor components firms is under investigation in the U.S. over sales it made to China.
News of a Justice Department investigation couldn’t overshadow Applied Materials stellar Q3 results. The company reported EPS of $2.12, which beat the consensus estimate of $1.99 among analysts. Revenue came in at $6.70 billion, which was also above analysts’ expectations of $6.50 billion. Applied Materials forecast revenue in the current fourth quarter at a midpoint of $6.50 billion. That topped consensus views of $6.40 billion. AMAT stock is up 52% year-to-date (YTD).
The Gap (GPS)
Clothing retailer The Gap (NYSE:GPS) seemed to be rediscovered by Wall Street analysts after its strong Q3 print. Multiple analysts lifted their price targets on the company, with Wells Fargo (NYSE:WFC) going to $20 a share from $16, while placing an “overweight” (buy) rating on GPS stock. The upgrades arrived quickly after The Gap knocked it out of the park with its Q3 earnings, sending its stock up more than 30% in a single trading session.
The Gap announced EPS of 59 cents compared to just 19 cents analysts forecast. Revenue in the quarter totaled $3.77 billion versus an estimated $3.60 billion. The Gap, which also owns and operates the Old Navy franchise, reaffirmed its full-year guidance. The strong results come after Gap named former Mattel (NASDAQ:MAT) executive Richard Dickson as its new CEO. Dickson is responsible for reviving the Barbie franchise during his time at Mattel and is now trying to turn around The Gap.
GPS stock is up 73% on the year.
Dell Technologies (DELL)
Dell Technologies (NYSE:DELL) is due to report its Q3 results on Nov. 30. However, the personal computer maker saw its shares upgraded by numerous analysts in October after it held an analyst day in New York City and announced plans to raise its dividend payment to stockholders by 10% a year between now and 2028. Melius Research, for one, initiated coverage on DELL stock with a “buy rating” and $95 price target, which implies 28% upside from current levels.
Melius Research said Dell is likely to benefit from an “AI halo effect” across most of its product lines. The firm also said that Dell is a structural share gainer, with “superior scale and an accomplished management team.” During the analyst day, executives at the Texas-based company said that they expect to return at least 80% of free cash flow to shareholders in the form of stock buybacks and dividends going forward. Investment bank Morgan Stanley (NYSE:MS) also maintain a “buy” rating on DELL stock and has named the company a “Top Pick” with a price target of $89 per share. Dell’s stock has risen 80% in 2023.
Advanced Micro Devices (AMD)
Analysts across Wall Street have taken a shine to Advanced Micro Devices (NASDAQ:AMD) in recent months. One such firm is Roth MKM, whose analyst team initiated coverage of the semiconductor company with a “buy” rating and a $125 price target, saying the chipmaker is poised to gain further market share in the cloud server sector and is growing in the enterprise market. The positive analyst views have helped send AMD stock up more than 20% since its Q3 print.
Not only did AMD beat Wall Street expectations with its Q3 financial results, the company also forecast $2 billion of AI microchip sales in 2024, which raised numerous eyebrows. For Q3, AMD announced EPS of 70 cents versus 68 cents that was expected. Revenue rose 4% year-over-year to $5.8 billion compared to analysts’ forecasts of $5.7 billion. AMD executives say they hope to take market share from archrival Nvidia (NASDAQ:NVDA) with their powerful new MI300A and MI300X microchips.
AMD stock is up 90% this year.
Netflix (NFLX)
Analysts were tripping over themselves to upgrade Netflix (NASDAQ:NFLX) stock after the streaming giant announced an increase of 8.76 million subscribers as part of its Q3 print. News that the company’s crackdown on password sharing and ad-supported tier are driving revenue higher led to analysts at Truist (NYSE:TFC) upgrading NFLX stock to “buy” from “hold.” JPMorgan raised its price target on the company’s shares to $480 from $455, and Goldman Sachs (NYSE:GS) increased its price target to $400 from $390 previously.
Netflix stock jumped 14% higher in a single day after the company reported Q3 results that blew past Wall Street forecasts. For Q3, Netflix reported EPS of $3.73, which was ahead of the consensus estimate among analysts of $3.49. Revenue amounted to $8.54 billion, matching forecasts. However, what really impressed was that Netflix announced a much better-than-expected increase in paid subscriptions, saying it added 8.76 million new subscribers compared to an estimate of 6.10 million.
NFLX stock has gained 62% on the year.
Microsoft (MSFT)
Talk about a ringing endorsement. Analysts at Piper Sandler (NYSE:PIPR) named Microsoft (NASDAQ:MSFT) their “highest conviction large-cap stock to own into year-end.” And that was before MSFT stock hit an all-time high in recent weeks. Piper Sandler cited Microsoft’s lead in AI as the reason for it placing an “overweight” (buy) rating on the stock and a $400 price target, which is 5% higher than current levels.
MSFT stock has been testing new all-time highs in recent weeks as excitement builds around the company’s role in A.I. The first new record close was reached on Nov. 7 when the shares finished trading at $360.53, beating the previous record close of $359.49 set on July 18 of this year. Microsoft’s stock is currently on its longest win streak since January 2021. Giving the current rally in MSFT stock a boost has been news that the tech giant is now planning to develop its own A.I. microchips inhouse.
YTD, MSFT stock has risen 60%.
Amazon (AMZN)
Analysts at UBS (NYSE:UBS) recently increased their price target on e-commerce giant Amazon (NASDAQ:AMZN) to $180 a share, which is 22% higher than where the stock now trades. UBS said that the introduction of advertisements on Amazon’s Prime Video streaming service could add $3 billion of revenue in 2024 and boost North American retail margins to 5.4% from 5% currently. The upgrade came before Amazon aired an NFL football game on Prime over the Thanksgiving holiday weekend.
Amazon is also expected to get a tailwind heading into year end from record consumer spending during Black Friday and Cyber Monday this year. Sales at the company’s core e-commerce business continue to accelerate, and Amazon’s earnings are improving after the company spent the last 18 months right-sizing its operations coming out of the Covid-19 pandemic when it overbuilt and over staffed. Most recently, Amazon has been pushing into AI, unveiling a new chatbot for businesses called “Q.”
On the date of publication, Joel Baglole held long positions in MSFT, NVDA and AMAT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
