Investing

Sell-Off or Not, 7 Blue Chips and Industry Leaders Analysts Want You to Buy Now

UBS’s Navin Jacob believes Wall Street is not fully appreciating (nor fully valuing) the strength and growth of the company’s Human Health unit, with diabetes treatments Jardiance and Trulicity bringing growth and a positive view on Tanezumab as a non-opioid pain treatment. More importantly, UBS sees Eli Lilly having perhaps the least amount of patent cliff woes compared with other large drug companies.

Shares of Eli Lilly shares closed up 1.2% at $128.16 on the heels of the analyst call, but the stock still closed marginally higher at the end of Friday at $128.30, despite a one-cent drop.

International Flavors & Fragrances Inc. (NYSE: IFF) may not be as widely known as true blue chip stocks to the public, with its $13 billion market cap, but if you taste corporate food or smell things you have without a doubt run across the company’s work. Goldman Sachs raised IFF stock to Buy from Neutral with a $151 price target (versus a $122.54 prior close).

IFF has a 52-week trading range of $121.85 to $150.57, and the Goldman Sachs target is higher than the consensus target price of $145.27. IFF shares were still up at $124.69 at Friday’s close, despite falling 0.8% during the day’s sell-off.

McDonald’s Corp. (NYSE: MCD) is a true blue chip and a defensive stock. It even closed up 0.24% at $186.81 during a big sell-off, a true test that it is one of the top defensive stocks to own. Cowen reiterated McDonald’s as Outperform with a $205 price target (versus a consensus estimate of $197.68) as the firm’s team is cautiously optimistic about the future prospects after store remodels, using automated assistance and technology, online ordering and even using third-party delivery services.

McDonald’s has a 52-week range of $153.13 to $190.88. No one even cares that one share of McDonald’s stock costs close to a month’s worth of a single ordering for one meal a day for a whole month.

Nike Inc. (NYSE: NKE) traded down by 6.6% to $82.19 after its earnings did not keep shareholders enthralled, but if you just consider the prior $88.01 close then it is important to realize Nike shares were outperforming both the Dow and S&P 500 with a 19% total return year to date. These are some of the Nike calls seen on Friday after the earnings report had been digested:

  • Credit Suisse maintained Nike as Outperform but lowered its estimates and its target price, down to $97 from $100.
  • Wedbush maintained its Outperform rating with a $96 price target, noting that the drop seemed overly dramatic.
  • Nomura/Instinet reiterated its Buy rating and raised its target price to $91 from $85.

Visa Inc. (NYSE: V) was already rated as Buy at Deutsche Bank, but the firm feels the fairly new Dow component has little no interest rate risk, along with the bank stocks, as it just collects fees every time a credit card or debit card with the Visa label on it is used. Deutsche Bank raised its $160 price target to $177, which compares with a $161.00 prior consensus analyst target.

Visa hit a new high of $156.82 recently, and it sold off 1.75% to $153.07 on Friday’s close with the sell-off.

Remember that analyst calls are not always right, and in many instances the analysts making the underlying calls have little to no more valuable information than the investing public.

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