I don’t know about you, but I pay attention to which companies are analyst stock picks, such as Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA).
I do it not because I need their affirmation to recommend a particular stock but because these highly covered names tend to see more price action due to their coverage, often leading to market-beating returns.
While investors get excited when a stock is upgraded to Buy, it’s equally nice when an analyst initiates coverage of a stock with a Buy or Outperform rating. That’s especially true when few analysts cover a stock.
On Dec. 19, Oppenheimer initiated coverage of TransUnion (NYSE:TRU) with an Outperform rating and an $81 price target. The shares initially rose before falling on the day. They’re up 15% in 2023. The Oppenheimer target suggests another 20% or more could be in store for shareholders in 2024.
What other stocks have recently gotten new coverage from Wall Street? Here are three worth buying.
Analyst Stock Picks: MSCI (MSCI)
Edward Jones initiated coverage of MSCI (NYSE:MSCI) on Dec. 22 with a Buy rating — no word on a target price. However, 20 analysts cover the financial indices and data provider’s stock. Of those, 11 rate it Overweight or an outright Buy with a target price of $571, about 5% higher than where it’s currently trading.
Year-to-date (YTD), MSCI stock is up more than 21% and 285% over the past five years.
At the end of November, MSCI’s CEO Henry Fernandez wrote an op-ed discussing how climate change will result in trillions of dollars being reallocated to debt securities tied to a company’s emissions levels. In 2022, according to Fernandez, $1.6 trillion of these debt securities were issued by companies.
MSCI has a role in this reallocation of capital through the data it provides. He rightly argues that investors need more information about future emissions and not just current data to assess the climate risk involved with each potential investment adequately.
That provides MSCI with a significant opportunity. It’s one of many that makes MSCI one of the finest S&P 500 companies you will own for the long haul.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) stock has gained 194% in 2023, making it the second-best performing S&P 500 stock behind only Nvidia.
Meta’s biggest good news in 2023 was the launch of Threads in July, a shot across the bow of X, Elon Musk’s text-based social media platform. Business Insider reported that Threads has become the most popular app in Apple’s U.S. app store. As long as Elon Musk continues to put his foot in his mouth or keyboard, Threads will continue to gain traction.
On Dec. 14, Threads was launched in the European Union, increasing the app’s popularity worldwide. Business Insider points out Meta now has two apps in Apple’s top 10, up from none a year ago. Threads monthly active users over the past three months has grown to 140 million, still considerably less than X at over 500 million, but the gap is shrinking.
The company’s October earnings report demonstrated how well its business is performing. Revenues grew 23% year-to-year to $33.64 billion, with $11.6 billion in earnings, 164% higher than a year earlier.
On Dec. 20, Raymond James initiated Meta with a Strong Buy rating and a $425.00 target price, 20% higher than its current share price and $40 higher than the $385 median.
Yum China (YUMC)
Yum China (NYSE:YUMC) was initiated by Deutsche Bank on Dec. 19 with a Buy rating and a $58 target price, 39% higher than its current share price. Of the 31 analysts who cover YUMC stock, 28 rate it Overweight or an outright Buy. The target price of $60.10 is slightly higher than Deutsche Bank’s initial target price.
Yum China owns 90% of its 14,000 locations unlike most large restaurant chains. Just 10% are franchised. That’s unlike its former parent — it was spun off from Yum Brands (NYSE:YUM) in 2016 — which focuses on franchised locations.
As a result, in Q3 2023, its company sales accounted for nearly 95% of its $2.91 billion in revenue, with operating profits of $342 million, 4% higher over Q3 2022. However, in the first nine months of 2023, its operating profit was $1.04 billion, 54% higher than a year ago.
It expects to reach 20,000 stores by 2026 with double-digit EPS growth in the next three years through 2026.
Fortune CEO Alan Murray interviewed Yum China CEO Joey Wat recently. She sounds like a very astute person. Shareholders are lucky to have her leading the company. Interestingly, she said it’s vital for management to stay in touch with customers and staff. However, she said staying in touch with staff was more critical of the two.
No wonder its business is going like gangbusters. She’s leadership personified.
Down 26% YTD, it’s not too late to invest in YUMC stock, the last but not least among these analyst stock picks.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
