The financial giant maintains an optimistic outlook for the third quarter earnings season, pointing to investment opportunities in stocks undervalued by the market.
HSBC bank forecasts an encouraging outlook for the third-quarter earnings season, identifying stocks that could beat market expectations. In their analysis, they highlight opportunities in companies whose values seem underestimated. Here are some of their key recommendations:
Target (TGT): improvement in sales and margins
With an increase of 11% so far this year, Target continues to show positive signs. Daniela Bretthauer, HSBC analyst, projects a price target of US$197, which would indicate growth of 24% in the next 12 months. Bretthauer highlights that margins and revenues continue to improve, with a 2.3% increase in net sales during the fiscal third quarter. This trend is expected to continue as Target’s turnaround strategy begins to generate concrete results.
Oracle (ORCL): Accelerated Growth in the Cloud
Oracle shows an exceptional performance this year, with its shares up 67%. HSBC analyst Stephen Bersey expects the stock to reach $210, which would represent additional growth of 19%. The development of your cloud infrastructure, along with the growing demand for artificial intelligenceboosts your income. Bersey believes that Oracle is well positioned to maintain its growth trajectory, although in the short term the value could stabilize.
3M (MMM): Resilient Margin Amid Challenges
Despite the challenges, HSBC projects a 14% rise in 3M shares, with a price target of $153. This year, 3M has achieved remarkable growth of 47%. According to HSBC analyst Wesley Brooks, the company continues to show a solid margin, although third-quarter comparisons could be more complicated. Better operating performance and a decline in restructuring costs could deliver a positive margin surprise.
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Other Recommendations: Biogen (BIIB) and Morgan Stanley (MS)
HSBC also sees potential in Biogen and Morgan Stanley. In the case of Biogen, the healthcare sector continues to offer opportunities, while Morgan Stanley benefits from the strength of the financial sector.
As things stand, HSBC anticipates favorable results for these companies in the third quarter, underscoring their ability to surprise investors despite initially moderate expectations. This could open up interesting opportunities in the market in a context where projections do not always reflect the true potential of some stocks.
Source: Ambito
