Wall Street analysts do a lot of research before rating stocks. They comb through earnings reports, assess a firm’s competitors and review current opportunities. There’s more to it than that, but once they are done, these analysts offer price targets and explain how they arrived at their rating.
Monitoring Wall Street price targets and the overall sentiment of a stock can help investors find long-term winners. Some stocks will outperform others, and these are the top Dow stocks to buy.
Visa (V)
Visa (NYSE:V) can become a trillion-dollar company in a few years. The credit and debit card issuer has a market cap north of $500 billion and offers a 0.74% yield. Shares are up by 8% year-to-date and have soared by 70% over the past five years.
Wall Street analysts have plenty to like about the stock. The fintech firm regularly reports net profit margins above 50% and delivered solid financials in the most recent quarter. Revenue and net income both increased by 10% year-over-year in Q2 FY24.
Cross border volume remained strong along with broader spending. Analysts believe that the stock can march higher. Visa has a “Strong Buy” rating from 24 analysts and has a projected 13% upside. The highest price target of $340 per share suggests the stock can gain an additional 22% from current levels.
Investors enjoy steady dividend payments and an impressive growth rate as they wait for the price to rise. Visa has maintained a compounded annual dividend growth rate of 16.84% over the past three years.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is a tech juggernaut with a chorus of bullish analysts. The stock is rated as a “Strong Buy” with a projected 18% upside. While the average price target indicates the stock has plenty of room to run, some analysts are even more bullish. The highest price target of $600 per share suggests a 45% upside from current levels.
Many mutual funds and ETFs have Microsoft as their top holding due to the tech firm’s high market cap. It also reports great financials, including 17% year-over-year revenue growth and 20% year-over-year net income growth in Q3 FY24. Microsoft Cloud is the main revenue engine, comprising more than half of the corporation’s total revenue.
Artificial intelligence can fuel more gains, especially Copilot. Microsoft Copilot is the foundation for many AI offerings, such as the recently released Copilot for Security. Shares are up by 12% year-to-date and have rallied by 223% over the past five years.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) has won Wall Street’s attention for many years. The company’s online marketplace continues to grow, and Amazon Web Services is the leader of the cloud computing industry. Amazon is also tapping into other exciting opportunities, like advertising, streaming and groceries.
Analysts believe the stock has a projected 18% upside from current levels. The stock has a consensus “Strong Buy” rating among 41 analysts. The highest price target of $245 per share suggests a 31% gain on top of the stock’s 24% year-to-date gain. Shares are also up by 100% over the past five years.
Amazon once again reported solid financial results in the first quarter of 2024. Revenue increased by 13% year-over-year as domestic and international sales achieved double-digit growth rates. Amazon Web Services accelerated to 17% year-over-year revenue growth due to artificial intelligence and other factors. AWS currently has a $100 billion annual revenue run rate.
On this date of publication, Marc Guberti held long positions in MSFT and AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.