Wall Street Analyst Recommended Stocks To Buy Amid The Latest Macroeconomic Uncertainty

Analysts on Wall Street are focused on companies that are well-positioned to weather the current economic storm and emerge stronger.

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According to TipRanks, a program that rates analysts based on their prior success, here are five stocks recommended by Wall Street's top professionals.

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CrowdStrike

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Rapid digitalization has aided businesses in increasing their productivity. That has, however, made them more vulnerable to attackers. This scenario is increasing demand for cybersecurity companies such as CrowdStrike (CRWD).

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After a recent virtual investor briefing with CrowdStrike management, Mizuho analyst Gregg Moskowitz confirmed a buy recommendation on the company with a $175 price target, saying that CRWD remained a top choice.

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The analyst noted that management expects solid growth opportunities for endpoint security and emerging use cases, fueled by Falcon, CrowdStrike's "truly extensible cloud platform." The company continues to see a potential total addressable market of $158 billion by 2026, up from $25 billion at the time of its IPO in 2019.

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The analyst emphasized management's assertion that business clients prefer CrowdStrike over Microsoft 80% of the time for a variety of reasons, including its next-generation platform that employs artificial intelligence over the competitor's signature-based approach.

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"Despite a more challenging macro backdrop," Moskowitz said, "we continue to believe CRWD's cloud platform remains highly differentiated, its GTM [go-to-market] is unrivaled, the company is demonstrating clear success extending beyond traditional endpoint security markets, and FCF [free cash flow] margins remain 30%."

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Moskowitz is ranked 237th out of over 8,300 analysts according to TipRanks. His ratings have been lucrative 57% of the time, with an average return of 12.6% on each rating. 

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Costco

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Costco (COST) is considered one of the most steady players in the retail market, due to its durable business strategy and remarkable membership renewal rates that are consistently around 90%.

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Costco just reported a 0.5% increase in March sales to $21.71 billion, with comparable sales falling 1.1% year on year. 

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According to Baird analyst Peter Benedict, core comparable sales growth (excluding the impact of changes in fuel prices and foreign exchange) dropped to 2.6% in March from 5% in February due to lower performance in the United States and a slowing in non-food categories. 

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Nevertheless, e-commerce remained sluggish.

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Benedict admitted that Costco is "obviously not immune" to a broad goods sales slump. With the March sales report, the analyst believes that lower adjustments to fiscal third-quarter projections are inevitable. He wants to "opportunistically accumulate shares on pullbacks" because COST's future valuation is somewhat lower than its five-year average.

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Benedict reaffirmed a buy recommendation on Costco with a $535 price target, believing that the business is well-positioned to deal with fluctuating consumer spending.

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Benedict is ranked 84th out of over 8,300 analysts tracked by TipRanks. His ratings have been lucrative 69% of the time, with an average return of 14.2% on each rating.

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Caesars Entertainment

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Another analyst on this week's list expressed confidence in his stock choice after visiting with the company's management. Carlo Santarelli of Deutsche Bank recently conducted investor meetings with Caesars Entertainment (CZR) management.

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Santarelli stated that the company's strategic initiatives are centered on debt reduction, "operational prudence," and the expansion of its digital business. In 2022, the corporation lowered its debt by $1.2 billion. (See TipRanks for Caesars Hedge Fund Trading Activity.)

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Given the company's solid operations and favorable growth in its digital sector, the analyst said he remained "favorably disposed of" toward it.

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Santarelli reiterated a buy recommendation on Caesars with a $70 price target. He is ranked 25th out of over 8,300 analysts tracked by TipRanks. Nevertheless, 66% of his ratings were successful, with each yielding an average return of 21.1%.

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Domino’s Pizza

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Domino's Pizza (DPZ), a fast-food restaurant chain, announced lower-than-expected fourth-quarter revenues in 2022. Last year, it encountered severe challenges in its US delivery operation. Meanwhile, the carryout industry grew rapidly in the United States.

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According to BTIG analyst Peter Saleh, based on a poll of over 1,000 Domino's customers, carryout-only consumers are particularly loyal to the brand, with only a handful saying that they purchase from other big pizza chains, independents, or aggregators.

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While carry out sales have been high recently, the analyst noted that the channel's average check is significantly lower when compared to delivery. He claims that if Domino's raises the price of the carryout deal by $1, "reclaiming the historical pricing differential with Mix and Match," same-store sales will climb by 300 to 350 basis points.

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Saleh also believes that by transitioning its rewards program to a spend-based approach, Domino's might push customers to the carryout category. The analyst also noted other possible catalysts for the firm, such as a third-party delivery arrangement.

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Saleh restated his buy recommendation on Domino's, with a $400 price target. Even though other analysts have criticized the firm, he sees promise.

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The analyst is ranked 376th out of over 8,300 analysts tracked by TipRanks. His ratings have been lucrative 63% of the time, with an average return of 11.4% on each rating. 

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Texas Roadhouse

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Saleh is also optimistic about Texas Roadhouse, a casual-dining restaurant chain.

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(TXRH) and confirmed its buy recommendation on the stock. Following many investor meetings with the company's senior leaders, he raised his price objective to $120 from $110.

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The analyst emphasized management's comments regarding Texas Roadhouse gaining market share as a result of some consumers scaling up from quick casual restaurants and others scaling down from fine dining. He said that the value gap between fast casual operators and Texas Roadhouse has "narrowed dramatically" over the last two years, as restaurant chains like Chipotle have boosted menu pricing by more than 20% while Texas Roadhouse has raised prices by just around 10%.

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"We continue to believe that Texas Roadhouse is using its value leadership, particularly on the kid's menu, to gain market share," said Saleh.  

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Despite rising material costs, the analyst anticipates Texas Roadhouse to maintain its pricing approach of setting lower prices than other restaurants in its sector, with pricing focused only on offsetting higher salaries. Overall, Saleh considers TXRH to be one of the "most enticing casual dining concepts," owing to its constant industry-leading top line, improved unit economics, and significant long-term unit potential.

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