In other words, stock investors are ending 2023 in good spirits. We saw significant gains in the markets, and even last summer’s fade was fully offset by November’s bullish turn, which still applies six weeks later.
At the start of this year, Bank of America set a year-end target for the S&P 500 at 4,600. The index has surpassed that, and BofA’s equity strategy team is predicting it will hit 5,000 by the end of next year.
Commenting on the markets, Savita Subramanian, the bank’s head of U. S. equity strategy, wrote: “The market has already absorbed significant geopolitical shocks and the good news is that we are talking about bad news. . . We are positive, not because the Fed can be expected to cut rates, but because of what it has accomplished. Companies have (and are) adapting to emerging rates and inflation.
The stock analysts at BofA are also gearing up for a solid 2024, and are busy picking out the stocks that they see as winners in the coming year. We’ve looked up some of their picks in the TipRanks databanks, to find out just why BofA is pounding the table on them. According to the data, the analyst consensus sees these 3 picks as Buy-rated, too. Here’s the scoop.
The first name on our list, Wix, is well-known among internet developers, especially DIYers. The company’s core product, which built its reputation and initial audience, is a WYSIWYG (What You See Is What You Get). Internet design editor, in particular designed to make quality site creation available to non-professionals, and even those with minimal or limited coding skills.
Wix debuted in 2006, gained attention and built its visitor base by using the “freemium” model, providing a pivotal point for everyone, for free, and making upgrades more complex for paid subscribers. with design tutorials and site templates; The more complex ones come with business and e-commerce tools.
The cloud-based design platform has become popular and the company has expanded its presence globally. Wix is available in 22 languages and the company has offices and operations in 12 countries, in addition to the United States, Singapore, India, Germany, Canada, and Brazil.
In the third quarter of 2022, Wix reached a significant milestone: it announced its first quarter of consistently successful operations. The company has continued to be successful ever since and in 3Q23, the maximum consistent period reported recently, it posted non-GAAP earnings of $65. 1 million. or $1. 10 percent. EPS 39 cents, higher than expected. The company’s earnings were based on a total profit of $393. 8 million, an increase of about 14% year-over-year and about $4. 15 million ahead of estimates. The quarter also marked the third consecutive quarter of accelerated year-over-year earnings growth.
Wix caught the attention of Bank of America’s Mike McGovern, who appreciates the company’s shift toward profitability and its new cash flow. McGovern writes, “We love Wix’s discrete margin inflection story (management expects FCF margin to grow from just 4% in 2021 to 25% in 2025), as well as the prospect of new products to drive growth. . . We also like Wix’s AI strategy, which makes it less risky than some think after the inventory included in the AI Risk categories in early 2023. (along with other online page developers such as SQSP). Wix has a suite of new offerings that leverage AI, making it more available to SMBs and individuals.
This position confirms McGovern’s buy rating, and its price target of $126 indicates a 12% upside outlook over the next 12 months. (To view McGovern’s track record, click here. )
Bank of America’s view is the only positive here; Wix has collected 17 recent analyst reviews, with the exception of one skeptic, all of which are positive, leading to a strong buy consensus score. The stock sells at $112. 35 and its average price target of $123. 07 implies a 9. 5% upside potential for the year. -during the year. (See WIX Inventory Forecast)
Crocs (CROX)
In 2022, Crocs acquired the Italian shoemaker HEYDUDE in a transaction worth $2.3 billion. HEYDUDE is known for its lines of lightweight, stylish footwear, offered at affordable prices – making it a good fit for Crocs. The acquisition was completed in February of last year.
By the numbers, Crocs has an impressive business. The company’s shoes, under the Crocs and HEYDUDE brands, are sold in 85 countries. The company sells around one hundred million pairs of shoes each year and can count on billions of dollars in annual sales. Crocs has discovered its position among the world’s leading sports and recreational footwear brands.
The company has grown in recent years. Crocs posted profits of $2. 31 billion in 2021, a 67% year-over-year increase. This profit amounted to $3. 55 billion in 2022, a year-over-year gain of 54%. year, albeit at a more moderate pace. In 3Q23, profit was $1. 05 billion, up 6. 6% from 3Q22 and $20 million ahead of forecast. Crocs adjusted diluted EPS increased 9. 4% year-over-year to $3. 25 and was 11 cents consistent with percent above estimates.
For BofA’s Christopher Nardone, the company’s strong track record of expansion is the key takeaway. “The Crocs business is experiencing strong momentum with sales expanding at a CAGR of 25% from 2019 (14% year-to-date sales),” Nardone said. “Some of this good fortune has been overshadowed by the poor functionality and demanding market situations we face through the HEYDUDE (HD) brand, which we have in price. We expect sales to continue strong at Crocs, along with incremental progress from HD. , will lead to a multiple expansion of a situation of depression. “
CROX’s 11 recent analyst tests come with nine buys for 2 strikes, giving inventory its strong buy consensus score. CROX sells for $107. 11 and its average target value of $123. 64 implies that it will appreciate by more than 15. 5% over the next year. (See CROX stock market forecast)
Maravai Life Sciences (MRVI)
From the internet and footwear, we will now concentrate on the healthcare sector. Maravai Lifesciences is a complement to the biopharmaceutical industry, with product lines designed to enable the study and progression of new diagnostics, drug treatments and vaccines. The company manufactures nucleic acid products, catalysts and reagents, and holds more than 1,500 patents for its brand generation portfolio.
The company boasts that its products have “set the standard” in spaces such as enzyme progression and biological protection verification. Maravai has long been a vital calling in nucleotide studies, and in the post-COVID study environment, it has begun to expand into the mRNA field. The company’s products enable drug researchers to screen and test vaccines against infectious diseases, cancer vaccines and treatments, mobile treatments, and genetic treatments, to detect impurities and offer natural therapies.
Maravai attributed its recent gigantic losses to a faster-than-expected decline in visitor demand as the pandemic takes a back seat. However, investor confidence remained low and the stock lost 54. 5% of its price for the year.
BofA analyst Michael Ryskin acknowledges these problems facing Maravai, but adds his belief that the company is well-positioned to weather the storm and regain traction in the long term. He writes, “MRVI shares sold off in ’23 as pandemic related sales fell and biopharma spending slowed. MRVI is currently trading at ~20x BofAe FY24 non-COVID Adj EBITDA, which we see as an attractive valuation for investors and potential strategic acquirers. While near-term headwinds are likely to persist into 2024, we believe fundamentals will start to improve, cost actions will stabilize EBITDA, and valuation is compelling given the quality of the asset.”
When quantifying its position, Ryskin values MRVI as a buy; It gives the stock a one-year price target of $8, suggesting a 28% gain. (To view Ryskin’s history, click here. )
Now let’s move on to the rest of the street, where inventory gets a consensus score of moderate buy, based on 7 recent reviews that are split five to two in favor of buying rather than taking. Inventories are worth $6. 23 and the average price target of $8. 71 suggests a 40% gain over a one-year horizon (see MRVI’s stock market forecast).
Disclaimer: The reviews expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only. It is very important that you do your own research before making any investments.