Although impressive third-quarter corporate earnings, job growth, and healthy consumer spending have buoyed market sentiment lately and helped drive the major benchmark indexes to record highs, some quality stocks have suffered price declines on concerns over market volatility, which has been triggered by lingering economic issues.
Expected Fed monetary policy tightening, supply chain constraints, and rising inflation is keeping investors up at night. But the ongoing digital transformation across industries, consistent product innovations, and rising demand for their products and services should help beaten-up stocks Meta Platforms, Inc. (FB), Visa Inc. (V), Mastercard Incorporated (MA), and Intel Corporation (INTC) to a significant rebound.
Wall Street analysts expect these stocks to deliver decent upside in the near term. Therefore, we think it could be wise to invest in these mega-cap players now on their recent dips.
Meta Platforms, Inc. (FB)
Recently rebranded, FB develops social media applications to connect through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. The Menlo Park, Calif., company operates through two segments--Family of Apps (FoA); and Facebook Reality Labs (FRL). Its products include Facebook, Instagram, Messenger, WhatsApp, and Oculus.
FB has begun its rebranding for all its platforms under its new name, Meta. The rebranding is part of its efforts to transform from the traditional social media format to encompass its virtual-reality vision for the future. This is what FB’s founder and CEO calls the “metaverse.” The company also plans to begin trading under the ticker ‘MVRS’ on December 1.
On November 2, 2021, FB named Publicis Groupe's Spark Foundry as its media agency or ‘global media planning and buying partner across Meta’s brand portfolio,’ following a seven-month review. FB expects Publicis, which has worked with brands that include TikTok, Hulu, L'Oreal, and Walmart, to help improve its marketing strategy, media innovation, planning and investment, cross-channel approaches, tools, tech and operations, and data safety.
For its fiscal third quarter, ended September 30, 2021, FB’s revenue increased 35.1% year-over-year to $29.01 billion. The company’s income from operations came in at $10.42 billion, indicating a 29.6% year-over-year improvement. Its net income was $9.19 billion, up 17.2% from the prior-year period. Its EPS increased 18.8% year-over-year to $3.22. The company had $14.50 billion in cash and cash equivalents as of September 30, 2021.
A $13.93 consensus EPS estimate for the current year indicates a 38.1% rise from its prior-year period. It surpassed the Street’s revenue estimates in each of the trailing four quarters. The $117.77 billion consensus revenue estimate for the current year represents a 37% year-over-year improvement. The stock’s EPS is expected to grow at a 21.4% rate per annum over the next five years.
The stock has gained 25.5% in price over the past year but has declined 4.4% over the past month. FB closed yesterday’s trading session at $328.08 and is currently trading below its 50-day moving average of $338.53 and 200-day moving average of $341.33.
Of 36 Wall Street analysts, 29 have rated the stock Buy, and six rated it Hold. The average price target for the stock is $405.59, which indicates an upside potential of 23.6%.
Visa Inc. (V)
Visa, in Foster City, Calif., operates as a financial services company that facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities worldwide. Its transaction processing network, VisaNet, enables authorization, clearing, and the settlement of payment transactions. Also, it offers card products, platforms, and value-added services.
On October 7, 2021, V expanded Visa Installments in Australia in partnership with Australia and New Zealand Banking Group Limited (ANZ), a multinational banking and financial services company that gives shoppers access to popular ‘Buy Now, Pay Later’ (BNPL) financing via their existing ANZ credit cards for use during in-store and online checkout. V also partnered with Quest Payment Systems, an independent full-service payment solution supplier that enables businesses to accept Visa Installments quickly and seamlessly. With 90% of participants using an installments option from their issuing bank, V expects to generate high sales in the coming months.
On September 29, 2021, V expanded its presence in Atlanta by laying plans to open a new office in 2022. The expansion should enable V to serve its clients more effectively, support talent development, and contribute to the long-term success of local communities.
V's net revenues for its fiscal fourth quarter, ended September 30, 2021, came in at $6.56 billion, representing a 28.6% rise from the prior-year period. The company’s non-GAAP operating income was $4.34 billion, indicating a 37.3% rise from the year-ago period. V’s non-GAAP net income improved 42.2% from the prior-year period to $3.52 billion. Its non-GAAP EPS increased 44.6% to $1.62. And, as of September 30, 2021, the company had $10.93 billion in cash and cash equivalents.
A $7.05 consensus EPS estimate for the current year, represents a 19.3% rise from the prior-year period. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Analysts expect V’s revenue to be $28.21 billion for the current year, representing a 17% rise from the prior-year period. V’s EPS is expected to grow at an 18% rate per annum over the next five years.
V has gained 13.2% in price over the past year but has lost 9.3% over the past month. The stock ended yesterday’s trading session at $209.14 and is currently trading below its $224.91 50-day moving average and its $231.31 200-day moving average.
Of 13 Wall Street analysts rating the stock, 12 have rated it Buy, and one rate it Hold. Analysts’ $274.85 average price target represents a 31.4% potential upside.
Mastercard Incorporated (MA)
MA is a technology company that provides transaction processing and other payment-related products and services to consumers, merchants, financial institutions, businesses, governments, and other organizations worldwide. It also provides cyber and intelligence products, information and analytics services, identity verification services, consulting, loyalty and reward programs, processing, and open banking. MA is headquartered in Purchase, N.Y.
On October 25, 2021, MA introduced Touch Card, a new access card standard for blind and partially sighted people. A variety of notches on the side of the card has been introduced to help visually impaired consumers identify the card. The standard has been designed to work with point-of-sale terminals and ATMs, ensuring it can be deployed at scale. This launch underscores its commitment to inclusivity, and it expects to achieve wider recognition across the industry.
Also, MA has announced a multifaceted partnership with Bakkt Holdings, Inc. (BKKT), a software company that develops trading, warehousing, and commerce digital platforms. In collaboration with BKKT, MA will offer a broad set of cryptocurrency solutions and services using BKKT’s digital wallet in the Mastercard network, enabling U.S. merchants, banks, and fintech to gain expanded access to the digital asset ecosystem. The offering would allow both companies to acquire expanded market reach amid increasing demand for crypto among millennials.
For its fiscal third quarter, ended September 30, 2021, MA’s net revenue increased 29.9% year-over-year to $4.99 billion. The company’s operating income came in at $2.72 billion, up 29.1% from the prior-year period. While its non-GAAP net income increased 45.9% year-over-year to $2.34 billion, its non-GAAP EPS increased 48.1% year-over-year to $2.37. The company had $6.41 billion in cash and cash equivalents as of September 30, 2021.
Analysts expect the stock’s EPS to improve 28.5% year-over-year in the current year to $8.26. It surpassed the Street’s EPS estimates in each of the trailing four quarters. A $18.84 billion consensus revenue estimate for the current quarter represents a 23.1% year-over-year improvement. MA’s EPS is expected to grow at a 26.2% rate per annum over the next five years.
MA has gained 13.3% in price over the past year but has lost 8.8% over the past month. The stock ended yesterday’s trading session at $328.48 and is currently trading below its 50-day moving average of $348.31 and its 200-day moving average of $363.85.
Of the nine Wall Street analysts rating the stock, eight have rated it Buy, and one rated it Hold. The stock is expected to hit $430.33 in the near term, representing a potential 31% upside.
Intel Corporation (INTC)
INTC in Santa Clara, Calif., designs, manufactures, and sells computer products and technologies that deliver networking, data storage, and communication platforms. The company also provides IoT products, computer vision, machine learning-based sensing, data analysis, localization, mapping, and driving policy technology.
On October 27, INTC unveiled its 12th Gen Intel Core processor family, launching six new unlocked desktop processors, including the 12th Gen Intel Core i9-12900K, the world’s best gaming processor. With a max turbo boost of up to 5.2 GHz, and as many as 16 cores and 24 threads, the new desktop processors deliver scalable multithreaded workload performance. With this launch, INTC expects to witness great demand from enthusiast gamers and professional creators in the coming months.
On October 13, 2021, Swiss Reinsurance Company Ltd. (Swiss Re) (SSREY), a leading global reinsurance provider, announced its collaboration with software company Decentriq’s Intel SGX-powered confidential computing-based platform to help secure data privacy and optimize performance while performing analytics on sensitive datasets. As the insurance industry evolves into a more data-driven business, gaining access to confidential datasets without jeopardizing consumer privacy will drive new business segments, greater transparency in supply chains, and more succinct insurance pricing models. INTC’s non-GAAP net revenues for its fiscal third quarter, ended September 25, 2021, increased 4.8% year-over-year to $18.09 billion. The company’s non-GAAP gross profit came in at $10.45 billion, up 7.2% from the prior-year period. While its non-GAAP net income increased 53.9% year-over-year to $7 billion, its non-GAAP EPS increased 58.3% year-over-year to $1.71. The company had $7.87 billion in cash and cash equivalents as of September 25, 2021.
INTC surpassed the consensus EPS estimates in each of the trailing four quarters. SKX’s EPS is expected to grow at a 3.2% rate per annum over the next five years.
INTC has gained 12.2% in price over the past year but has declined 7.4% over the past month. The stock ended yesterday’s trading session at $49.86 and is currently trading below its 50-day moving average of $52.88 and its 200-day moving average of $55.01.
Of the 24 Wall Street analysts rating the stock, four have rated it a Buy, and 12 rated it Hold. Wall Street analysts expect INTC to hit $53.81 in the near term, representing a 7.9% potential upside.
FB shares were trading at $328.80 per share on Wednesday afternoon, up $0.72 (+0.22%). Year-to-date, FB has gained 20.37%, versus a 24.88% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.4 Beaten Up Stocks to Consider Buying on the Dip appeared first on StockNews.com