It’s funny, while all the bearish commentators remark on how bad things could be for the technology sector this year, most of the firms we cover on Wall Street are still reasonably positive. While nobody seems to have huge, outsized expectations, the sector continues to be rated Outperform at many firms. The question is what companies have the kind of cutting-edge advantages that can help drive solid upside?
We screened the Merrill Lynch research database looking for tech stocks that are not only rated Buy, but have big upside to the firm’s price target. We also screened for stocks that fit into today’s needs. We found four rated Buy that look outstanding.
Check Point Software Technologies
This remains one of the top tech stocks to buy on Wall Street for a security presence and is said to be in merger talks with CyberArk Software. Check Point Software Technologies Ltd. (NASDAQ: CHKP) is one of the best in helping customers protect against advanced persistent threats.
Check Point is considered a worldwide leader in securing the Internet, providing customers with uncompromising protection against all types of threats, reducing security complexity and lowering the total cost of ownership. Check Point first pioneered the industry with FireWall-1 and its patented stateful inspection technology. Also, cybersecurity is one of the top Merrill Lynch themes for 2016.
The company reported outstanding third-quarter results on strong demand for its advanced threat prevention and mobile security technologies. Its revenue growth rate has accelerated almost every quarter over the past year and a half. Many on Wall Street think that Check Point should see year-over-year accelerating growth in product licenses, particularly as the security firewall refresh appears to be in the beginning stages. Acquiring CyberArk Software could add a fresh product offering to the company’s already industry leading portfolio.
The Merrill Lynch price target for the stock is $94, and the Thomson/First Call consensus price target is at $91.96. The stock closed Tuesday at $75.92.
This solid technology stock has been a long roller-coaster ride for investors over the last two years. Juniper Networks Inc. (NASDAQ: JNPR) is a provider of high-performance network infrastructure to service providers and enterprises. Key products include IP-based routers for service provider core and edge networks, security solutions and high-end enterprise routing equipment. Juniper’s products supports converged data, voice, video and wireless applications across extended network.
The stock has taken a big hit since printing highs in November and is back to a very solid support level for investors looking to buy shares. For the fourth quarter, the consensus average analyst earnings per share estimates suggest year-over-year increases of 44%, while revenue forecasts indicate growth of around 18%. Full-year earnings are projected to jump almost 37%, while hitting the revenue forecast would mark a 4.5% year-over-year rise. This is tremendous growth into what was a difficult year for many companies.
Investors receive a 1.57% dividend. Merrill Lynch has a $36 price objective, and the consensus price target $32.21. The stock closed Tuesday at $25.74.
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