Analysts like these Nasdaq stocks.
The S&P 500 is up about 150% in the last 10 years, but the Nasdaq composite is up about 300% in that same stretch. The Nasdaq composite is calculated using the share prices of more than 2,500 stocks that trade on the Nasdaq exchange. So far this year, the Nasdaq is outperforming the S&P 500 once again, gaining more than 5% year to date. The Nasdaq is known for its tech stocks, but plenty of high-quality Nasdaq stocks exist outside the tech sector as well. Here are nine of the best Nasdaq stocks to buy, according to CFRA.
Google parent company Alphabet has been one of the stalwarts of the Nasdaq for decades. This year has certainly gotten off to a challenging start for investors, but Alphabet just keeps chugging away, gaining about 6% year to date. Analyst John Freeman says long-term investors can expect more of the same from Alphabet in the years ahead, thanks to Google's high-growth cloud and YouTube businesses. Freeman projects 17% compound annual revenue growth over the next three years and says Alphabet has incredible operating leverage and profitability potential. CFRA has a "strong buy" rating and $1,718 price target for GOOGL stock.
Comcast has about 22 million basic cable customers and more than 27 million broadband customers. It is also the parent company of NBCUniversal, which includes Universal Pictures and Universal Studios theme parks. Analyst Tuna Amobi says the health crisis has been a double-edged sword for Comcast. The company's theme parks and movie and TV businesses have been hammered, but Comcast reported its best broadband activation numbers in 12 years during the first quarter. Despite the near-term disruption, Comcast will continue its pivot to a broadband-centric connectivity strategy, Amobi says. CFRA has a "strong buy" rating and $44 price target for CMCSA stock.
The Nasdaq is known for high-growth tech stocks, but it also has plenty of blue-chip value stocks. Analyst Garrett Nelson says PepsiCo is a defensive play during this period of economic turbulence, and its Frito-Lay snack business has been a significant growth driver as more people have been staying at home and snacking. Nelson says PepsiCo has a strong balance sheet and stable earnings. PepsiCo's long-term focus will be on healthier snacks and drinks, and patient investors will benefit from buybacks and 3% dividends. CFRA has a "strong buy" rating and $150 price target for PEP stock.
Charter Communications (CHTR)
Charter Communications is the second-largest U.S. cable provider and has 16 million video subscribers and 27 million internet customers. Like Comcast, Charter reported strong first-quarter internet subscriber additions. Amobi projects 3.8% revenue growth and expanding margins for Charter in what will certainly be a difficult year overall. Charter has $8.7 billion in total liquidity, which should be more than enough to carry it through the downturn. In addition, Amobi says residential internet subscriber growth will help offset voice and video subscriber losses. CFRA has a "strong buy" rating and $600 price target for CHTR stock.
T-Mobile completed its merger with Sprint in early April and is now a legitimate challenger to U.S. telecom giants Verizon Communications (VZ) and AT&T (T). Analyst Keith Snyder says that despite its post-deal size, T-Mobile will continue to outgrow its competitors. Snyder anticipates an aggressive marketing campaign in the coming months to introduce the integrated company. CFRA projects that the Sprint addition will help drive 54.6% revenue growth in 2020, and revenue will continue to grow 7.5% in 2021. CFRA has a "strong buy" rating and $110 price target for TMUS stock.
Broadcom is a large-cap semiconductor stock. The chipmaker provides products for the wired infrastructure, wireless communications, and industrial and enterprise storage markets. Analyst Angelo Zino says Broadcom is a major winner from the imminent 5G mobile device upgrade cycle, given the company's content levels in 5G devices. In addition, Zino says Broadcom's focus on recurring, higher-margin infrastructure software revenue is the right move. CFRA is projecting 5.3% revenue growth in fiscal 2020 and 6.3% growth in fiscal 2021. Broadcom also pays a sizable 4.6% dividend. CFRA has a "strong buy" rating and $325 price target for AVGO stock.
Exelon is an integrated electric and gas utility that also operates the largest U.S. nuclear power plant fleet. Analyst Paige Meyer says Exelon should return to earnings growth by 2022, and the company's aggressive capital spending initiatives will pay off down the line via rate increases. Meyer says the company's generation unit will produce ample cash flow to support both additional investment and debt reduction. CFRA projects that revenues will fall 4% in 2020 before flattening out in 2021. Exelon shares pay a 4% dividend. CFRA has a "strong buy" rating and $46 price target for EXC stock.
Electronic Arts (EA)
Electronic Arts is one of the largest independent video game publishers and owner of popular franchises such as Madden, FIFA and Battlefield. Many Americans stuck at home and bored have turned to video games for entertainment, and Freeman says EA's revenue growth should accelerate to 10% in fiscal 2020 and 13% in fiscal 2021. In addition, he says next-generation gaming consoles set for release in the second half of 2020 are bullish near-term revenue catalysts for EA. Freeman also likes EA's $4.7 billion net cash position. CFRA has a "strong buy" rating and $150 price target for EA stock.
O'Reilly Automotive (ORLY)
O'Reilly Automotive is one of the largest U.S. auto parts retailers. Nelson says O'Reilly shares trade at an attractive valuation, and the company will likely outperform its peers in both sales and earnings growth over the next several years. He is bullish on the company's dual approach to both commercial and retail customers, as well as its consistent market share gains. To top it off, Nelson says the entire auto parts industry should benefit from a rise in the average age of vehicles on the road. CFRA has a "strong buy" rating and $470 price target for ORLY stock.
Nasdaq stocks worth buying:
-- Comcast (CMCSA)
-- PepsiCo (PEP)
-- Charter Communications (CHTR)
-- T-Mobile (TMUS)
-- Broadcom (AVGO)
-- Exelon (EXC)
-- Electronic Arts (EA)
-- O'Reilly Automotive (ORLY)
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