Buy These 3 Stocks for 78% Returns, Suggested by Wells Fargo.
In only one week, the Federal Reserve will convene its next meeting. The central bank is expected by the market to lower interest rates for the first time in more than a year. Although the rate cuts are anticipated, the news might provide equities a fresh boost to growth. This may not be a case of "sell the news, buy the speculation." The S&P 500 index is currently 5% behind its peak, despite the fact that the market has been bouncing along at its peak.
This is due to the economy's inconsistent signals regarding the likelihood of a recession. It clarifies why a rate drop by the Fed could send equities soaring once more. It might bring the economy the much-needed boost.
However, a number of variables influence whether a stock will rise or fall. In the end, the company will decide which direction its stock takes. Thus, Wells Fargo (NYSE:WFC) has determined that the three growth stocks listed below will see higher prices over the course of the next year, regardless of whether the central bank takes action.
Important Details About This Article:
- At its scheduled meeting the following week, the Federal Reserve is expected to make an announcement on interest rate decreases, which might cause the market to rise if and when the central bank does so.
- The business fundamentals of a firm will ultimately determine how much it grows, and Wells Fargo has selected three growth stocks that have a median upside potential of 78% over the course of the coming year.
- Get a free copy of our just released "The Next NVIDIA" report if you're searching for stocks with a lot of promise. It has a software stock that, in our opinion, has ten times the potential.
ANCTF (Alienation Couche-Tard)
Although it's likely that numerous investors have traveled to one of Alimentation Couche-Tard's (OTC:ANCTF) numerous locations, many may not be acquainted with the Canadian grocery store operator.
Although Couche-Tard is the primary brand of the c-store chain in Quebec, it is the biggest standalone convenience store operator in the United States with 6,700 company-operated Circle K outlets. In ten states, there are also about 500 Holiday stores. It runs more than 16,000 stores worldwide.
Despite rising 8% in the previous year, the c-store operator's stock are down more than 3% in 2024. Wells Fargo has increased its target price to $88 Canadian from $86 Canadian for its stock that is traded on the Toronto Stock Exchange. Under the ticker symbol ANCTF, Couche-Tard is also traded over-the-counter in the United States. The stock's 77% upside is implied by the target price. Couche-Tard is trying to pay $38.5 billion to Seven & i Holdings (OTC:SVNDY), the firm that owns the 7-Eleven chain in Japan, despite the company's inconsistent recent financial results.
The Canadian company's goal is to raise EBITDA by 11.7% year until 2028; nevertheless, in the most recent quarter, EBITDA decreased. Couche-Tard's buyout approach was also turned down, but the company isn't letting up.
Though 7-Eleven is the largest C-store chain in the United States in terms of number of shops, any merger may still have trouble getting approved by regulators under the Biden administration. Large mergers are frowned upon by the Federal Trade Commission, given the industry's extreme fragmentation.
Chipmaker Nvidia (NASDAQ:NVDA), which is by no means unknown, also received a price target raise from Wells Fargo. After hitting an all-time high and ranking as the most valuable corporation in the world in June, the stock has lost 26% of its value. Since then, it has reverted to third position, trailing only Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT).
After Nvidia exceeded analyst estimates in the second quarter and increased its guidance for the third quarter ahead of projections, Wells Fargo increased its price per share to $165 from $155. The revised price objective, at slightly under $103 per share, indicates that the stock still has 60% upside potential.
For the foreseeable future, data centers utilizing Nvidia's artificial intelligence chips will generate billions of dollars in revenue for the chipmaker. However, there was a recent hiccup when the Justice Department subpoenaed Nvidia to look into potential antitrust violations.
Opponents claim Nvidia is unfairly gaining business by manipulating its market placement. Although the subpoena casts doubt on Nvidia's ability to develop steadily, Nvidia's long-term adoption of AI and data centers' capacity to maintain their current level of investment add to the uncertainties surrounding the company's future prospects.
The Crescent Group (CRGY)
Small but rapidly expanding, Crescent Energy (NASDAQ:CRGY) is an integrated oil and gas business that mainly serves the Texas Eagle Ford Shale region. Its growth-by-acquisition approach, which includes its statement last week that it will buy a private operator in the area for $168 million, demonstrates that it is not content to remain tiny.
The transaction gives Crescent's portfolio a total of 5,300 net royalty acres of surface, midstream, and mineral properties in addition to 30 new locations. The $2.1 billion acquisition of SilverBow Resources, another Eagle Ford player, by the oil and gas stock also ended lately. The region's capacity to generate more oil and natural gas than other shale plays makes it politically important.
In light of the recent acquisition agreement, Wells Fargo raised its target price for Crescent Energy by $1 to $21 per share. The fact that the oil and gas stock will pay for the private operator with cash suggests that it has the resources to support its expansion plans.
However, Crescent is trading for less than $11 per share, meaning that over the course of the next year, the stock might rise by more than 96%. Given that the market for fossil fuels still has a long tail, Crescent Energy stock is attractively priced at just 6 times projected earnings for the following year, a small percentage of sales, and a pitiful 3.5 times free cash flow.
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