Wall Street Analysts Think These 3 Stocks Could Soar More than 40% Over the Next Year

Wall Street analysts can often be among the more conservative handicappers of where revenue and earnings growth can come in over time. This makes sense, considering the price targets and buy/sell calls such analysts put forward have a direct impact on their jobs. 

If such analysts don’t get the direction of movement right (or are way off with the magnitude of the move a given stock makes), that can be career-ending. That’s a lot of pressure to contend with, when you’re the one in the hot seat providing your take on a given company.

That said, despite this tendency toward conservatism in the analyst community, there are a number of stocks that currently carry significant price targets over and above where shares currently trade. Here are three with price targets set more than 40% above their current share price I think are worth considering. 

Caesar’s Entertainment (CZR)

One of the more intriguing stocks that doesn’t get enough attention right now in my view (but analysts seem to wholeheartedly like) is Ceasar’s Entertainment (NASDAQ:CZR). Shares of the casino operator have not performed particularly well over the past year, or past five years for that matter. Over these time frames, CZR stock has lost more than 25% of their value, meaning this is a stock many in the market still view as a turnaround story.

That makes the aggregate consensus price target of $41.82 on CZR stock even more intriguing to look at (reflecting roughly 41% upside from current levels). Some of this price target may be tied to the stock’s recent underperformance. But I do think a significant amount of upside analysts are pricing into this stock has to do with Ceasar’s premium positioning in the gaming and hospitality sector, one which many have reason to believe has been overly beaten down of late. 

The company has continued to see reasonable revenue growth of around 2% this past quarter, driven by adjusted EBITDA growth of 4% in the company’s digital gaming segment. As online gaming becomes a bigger piece of the pie for Ceasars and the company’s competitors, I expect the company’s leading position on this front to be a key earnings driver.

Now, the stock is valued at a rather steep multiple of 32-times forward earnings, which implies the market is already thinking growth should rebound in the quarters to come. But if we do see an explosion of online gaming revenue materialize, this is a stock that analysts could clearly be right on. In my view, investing in Ceasars is really a question of time horizon and patience. 

Albermarle (ALB)

One of the more divergent picks on this list (with some buy, sell and hold ratings) is lithium producer Albermarle (NYSE:ALB). This is a more divisive pick, simply because so many investors (including those on Wall Street) appear to be split on their view of where this stock will be headed over the near-term.

Indeed, the price target variance on ALB stock is considerable. The high target of $107 per share implies upside of around 51% from current levels. However, the most bearish Wall Street analyst has this stock pegged at just $29 per share, suggesting shares of ALB stock could plunge 60% from here.

Thus, this is a stock that perhaps plays into the “that’s what makes markets” theme better than many out there. So, who’s right? 

I do think demand for battery minerals will continue to climb, with or without federal government support. And while the Trump administration’s rollbacks of previously-juicy incentives for battery technologies and other renewables has waned, private markets around the world will likely pick up the rest of the slack. Adding to this thesis, if more production is truly on-shored to the U.S. (one of Trump’s goals), Albermarle and its U.S. operations could actually see a boost. 

This is certainly a more speculative pick, but one I think provides the kind of risk/reward upside many investors are after right now. 

Fair Isaac Corporation (FICO)

Perhaps the most easy stock on this list for most investors to get bullish on is Fair Isaac Corporation (NYSE:FICO). Shares of the credit rating agency provider have continued to surge over time, rising more than 260% over the past five years alone. Thus, a consensus price target which implies 53% upside from current levels doesn’t seem that far from reality, given the company’s historical returns.

Fair Isaac earns the majority of its income from the financial services industry, providing key analytics and decisions making software to firms looking to verify the creditworthiness of its clientele. With a host of improved cloud-based decision making platforms in conjunction with core software licensing and analytics cash flow streams, Fair Isaac is among the highest-margin and fastest-growing stocks that may not be on many growth investors’ radar screens.

And while the company’s core multiple does already imply significant growth ahead, I think there are reasons why these Wall Street analysts may be right in assuming FICO stock has even more runway to grow. The company’s industry-leading margins have provided a rock-solid balance sheet most companies dream of having. And this strong cash position driven by robust (and growing) cash flows lends itself well to the idea that future dividends and reinvestment into R&D will drive future capital returns for investors today.