These stocks are best for the long term, top Wall Street analysts say - Dailyforextrading

These stocks are best for the long term, top Wall Street analysts say - Dailyforextrading

Investors seem to be welcoming the latest earnings season with fresh optimism despite nagging concerns about inflation, recession, and rising interest rates.


Indeed, strong quarterly results from a number of key companies have helped power the major stock averages to weekly gains.

That being said, identifying the right investment opportunities requires more than just watching how a stock moves. Investors with a long-term perspective have to look past the immediate noise.

Here are five companies that top Wall Street pros have picked for long-term value creation, according to TipRanks, which ranks analysts based on their performance.

Knight-Swift Transportation

Trucking company Knight-Swift Transportation (KNX) is no stranger to the supply chain congestion that has plagued industries since the pandemic began.

This was reflected in its recently released second-quarter results as well. Weakness in network fluidity kept its intermodal business — which involves freight transport via the rail in containers and other trailing equipment — under pressure.

Nonetheless, Cowen analyst Jason Seidl expects intermodal volumes to recover in the second half of this year, going by what was stated by Knight peers J.B. Hunt (JBHT) and CSX (CSX). (See Knight Transportation Hedge Fund Trading Activity on TipRanks)

Moreover, its other operating segments, namely its truckload (TL) and less-than-truckload (LTL) businesses, showed immense resilience and strength. Seidl highlighted the solid outperformance of both segments, despite the truckload business’s spot rates. These are payments made by a shipper to move shipment at freight market price.

Knight’s less-than-truckload business, which gathered more strength with its acquisitions of AAA Cooper and Midwest Motor Express last year, particularly buoyed Seidl’s confidence in the company. “KNX expects LTL demand to remain strong with yields improving nicely as well

Which should help offset weakness in TL. Confidence in LTL is met with continued terminal expansion, with KNX’s door count now over 4,300,” Seidl said.

The analyst, who is ranked No. 4 among the almost 8,000 analysts followed on TipRanks, maintained a buy rating on Knight, with a price target of $55

“We see the diversity of KNX’s business easing pressure on anticipated TL weakness in ’23,” he said. Seidl has made successful stock ratings 73% of the time, with each rating bringing in an average return of 26.1%.

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Truist Financial

Truist Financial (TFC) is the sixth largest commercial bank in the U.S., formed after the merger of two major banks, BB&T and SunTrust, in 2019.

Truist is skillfully integrating the assets of the two banks while bringing value to shareholders. Moreover, the higher interest rate environment is proving to be beneficial for Truist in the form of higher interest income.

RBC Capital Markets analyst Gerard Cassidy thinks that Truist will be able to completely focus on taking the bank to greater heights once the entire integration process is over.

“Furthermore, when the merger is completed and TFC is firing on eight cylinders its 20+% ROTCE (Return on Tangible Common Equity) target should be attainable on a consistent basis,” the analyst said. (See Truist Financial Dividend Date & History on TipRanks)

The bank’s recently released second-quarter results reflected strong benefits from sequentially higher insurance income, along with robust revenues from higher card and payment-related fees. However, a decline in residential mortgage income was a dampener.

That said, Cassidy recognized that Truist’s strong underwriting standards and high credit quality will help its credit metrics to “outperform its peer group over the next 24 months.”

Cassidy reiterated a buy rating on Truist with a price target of $70. Ranked No. 26 among nearly 8,000 analysts followed on TipRanks, Cassidy’s ratings have a 68% success rate and a 22.5% average return per rating. Source: CNBC

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