Seasoned investors typically pay close attention to “stocks with analyst approval,” a sign of potential success and resilience in the ever-volatile equity market landscape. Currently, we are in a period of rapid technological advancements in artificial intelligence (AI) and shifting economic paradigms amid expected interest rate cuts. Thus, the importance of relying on expert equity analysis has become even more pronounced on Wall Street.
Stocks have been on a tear so far in 2024, with both the S&P 500 and Nasdaq 100 indices currently sitting on year-to-date (YTD) returns of around 9%. Over the past year, the spotlight has been on well-known equity giants, especially the Magnificent 7 stocks. Yet, Wall Street offers a large pool of gems across diverse industries that can transform equity portfolios. Therefore, today’s article introduces three stocks with analyst approval that deserve our attention in April.
Abbott Laboratories (ABT)
The first on our list of stocks with analyst approval is the healthcare giant Abbott Laboratories (NYSE:ABT). It offers exposure to secular growth drivers such as an aging population and chronic diseases. The company boasts a robust product portfolio spanning pharmaceuticals, diabetes, medical devices, diagnostics and nutrition.
In the fourth quarter, Abbott delivered solid financial results. While revenue increased just 1.5% year-over-year (YOY) to $10.2 billion, its underlying base business excluding COVID-19 testing sales grew 11% organically. Adjusted net income grew 15.5% YOY to $2.09 billion, or $1.19 per share.
Abbott’s diversified portfolio and global footprint provide resilience against economic cycles, offering a relatively safe harbor for investors, especially in the face of a potential economic downturn. The healthcare company boasts healthy margins, a productive pipeline and decades of consecutive dividend increases. You may be interested to know that the current dividend yield stands at 2%.
Meanwhile, the management continues investing in innovative products like the FreeStyle Libre glucose monitoring system, which saw fourth-quarter sales jump 25.5% YOY to $1.4 billion. Wall Street analysts anticipate top-line growth of more than 11% and earnings per share (EPS) growth of 15% in 2024.
So far in 2024, Abbott shares have stayed roughly flat. Yet in March, ABT stock got an analyst “Buy” rating from Wells Fargo (NYSE:WFC). Analysts now have a 12-month median price target of $126 for the stock, implying a 14% upside potential from current levels. Potential investors may consider buying the dip in ABT shares.
Builders FirstSource (BLDR)
Our second pick among stocks with analyst approval is Builders FirstSource (NYSE:BLDR), a leading supplier of structural building products and services. In late February, management reported robust earnings results for the fourth quarter and full year 2023. Adjusted earnings per diluted share increased to $3.55, up from $3.21 in the year-ago quarter, demonstrating the company’s ability to grow its profitability. Additionally, Builders FirstSource generated a strong free cash flow of $1.9 billion for 2023, underscoring its operational efficiency.
Meanwhile, the US commercial construction market, where Builders FirstSource leads, is on a growth trajectory. Recent metrics suggest that the market size is estimated to exceed $171 billion in 2024 and reach $203 billion by 2029, growing at a compound average growth rate (CAGR) of 3.51%. This growth presents a significant opportunity for Builders FirstSource to expand its market share and revenue.
BLDR stock has appreciated over 25% year-to-date (YTD), trading near all-time highs. This performance reflects the market’s confidence in the company’s growth prospects and financial health. In recent weeks, Barclays (NYSE:BCS) further increased its price target for BLDR stock to $235, while the 12-month median price forecast stands at $220, presenting a 5% upside potential from current prices. These analyst endorsements underscore the belief in Builders FirstSource’s strategic positioning and potential for continued success in the expanding US commercial construction market.
MercadoLibre (MELI)
Our last choice among stocks with analyst approval is MercadoLibre (NASDAQ:MELI), the e-commerce giant that operates the largest online marketplace in Latin America. With well over 200 million active users, MercadoLibre has established a dominant presence in the region. Additionally, its fintech arm, Mercado Pago, offers digital payment solutions that are gaining traction amidst increasing mobile phone penetration.
In late February, MercadoLibre management announced impressive fourth quarter and full year results for 2023. Net quarterly revenues surged to $4.3 billion, up 41.9% year-over-year (YOY). Notably, diluted EPS for 2023 soared to $19.46, compared to $9.23 for the previous year, reflecting significant profitability growth. Meanwhile, the company’s commitment to expanding its footprint and enhancing its offerings is evident in its plan to invest $2.45 billion in Mexico in 2024. This investment, a substantial increase from the previous year, is primarily focused on improving technology and logistics solutions.
Despite these positive developments, MELI stock has remained relatively flat over the first quarter of 2024, currently trading around $1,570. However, JPMorgan Chase (NYSE:JPM) recently raised its price target for MELI to $2,150, while the 12-month median price forecast stands at $2,000, an upside potential of 30%. This bullish outlook from analysts reflects confidence in MercadoLibre’s strategic investments, market dominance and the growth potential of its fintech services, making it a compelling choice for investors looking at stocks with analyst approval.
On the date of publication, Tezcan Gecgil 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
