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A sign outside The Children’s Place store in Irvine, California.
Scott Mlyn | CNBC
(This story is part of the Weekend Brief edition of the Evening Brief newsletter. To sign up for CNBC’s Evening Brief, .)
The year may be quickly coming to an end, but according to Wall Street analysts there are some names that still offer plenty of upside heading into the final weeks of 2019 and beyond. Analysts say these stocks represent some of the best there is to offer in their respective industries.
CNBC looked at some of the most recent Wall Street research in search of stocks that analysts say present “best-in-class” opportunities for investors. Stocks include O’Reilly Automotive, The Children’s Place, Rush Enterprises, Guardant Health and Costco.
At a time when many of retail’s biggest names are struggling, there’s one company that continues to impress analysts and investors.
“COST’s strong fundamentals including best-in-class traffic/comps and durable competitive advantages continue to stand out within retail,” Baird said.
The retail giant has a “loyal membership base, and growing omni-channel capabilities,” the firm said.
“COST remains a rare growth staple with still-meaningful growth opportunities.”
Rush Enterprises is another “best-in-class” stock, according to William Blair. The company is a retailer of commercial vehicles, primarily new and used trucks, but the industry may see a downturn next year, the analyst warned.
“The expected 2020 downturn in Class 8 trucks is driven by weaker freight market conditions, overcapacity of the fleet, and declining used truck conditions,” analyst Neil Frohnapple said.
However, the firm actually believes Rush is poised to thrive primarily due to what it calls “best-in-class” management and said investors will be “surprised by the earnings resiliency of the business.”
Guardant Health recently reported third-quarter earnings, which Canacccord Genuity analyst Mark Massaro called “outstanding.”
The company develops blood tests for early detection of cancers and diseases.
The firm said it liked the “longterm strategic thinking and global vision” of Guardant and called the stock a “best-in-its-class growth play.”
Here’s what else analysts say about stocks that are “best in class:”
William Blair- O’Reilly Automotive, Outperform rating
“There is no change to our Outperform rating in light of what we consider to be a justified valuation and our view that industry fundamentals remain solid and that O’Reilly remains a best-in-class retailer that continues to execute very well and gain share versus the industry.”
According to TipRanks’ stock analysis, O’Reilly Automotive scores a ‘Moderate Buy’ consensus rating from the Street. That comes with an average price target of $454.20 (4% upside potential).
Wedbush- The Children’s Place, Outperform rating
“We view lower promotional positioning in 3Q as favorable with momentum tracking well into Holiday. In November, promotions continue to run lower Y/Y. We continue to view PLCE as best-in-class at determining and executing on promotional drivers, likely boosting merchandise margins, and see improved Holiday execution owing to expanded partnership with 3PL provider Radial, which should allow PLCE to fully capitalize on outsized demand trends as seen last year.”
According to TipRanks’ stock analysis, The Children’s Place scores a ‘Strong Buy’ consensus rating from the Street. That comes with an average price target of $117 (65% upside potential).
Buckingham- Rush Enterprises, Buy rating
“We also believe the company’s best-in-class management team will successfully navigate the new Class 8 truck sales downturn in 2020, and we think investors will be surprised by the earnings resiliency of the business next year due primarily to Rush’s internal initiatives. … The expected 2020 downturn in Class 8 trucks is driven by weaker freight market conditions, overcapacity of the fleet, and declining used truck conditions (declining prices/weaker demand).”
According to TipRanks’ stock analysis, Rush Enterprises scores a ‘Moderate Buy’ consensus rating from the Street. That comes with an average price target of $46.67 (3% upside potential).
Canaccord Genuity- Guardant Health, Buy rating
“Guardant knocks it out of the park, again, is the best-in-its-class growth play. Guardant Health delivered another outstanding quarter which beat our model across the board, and was highlighted by superb 181% top line growth and record 70% gross margins. We appreciate Guardant’s strong near-term execution, combined with its longterm strategic thinking and global vision, across cancers in late stage therapy selection, cancer monitoring, and early-stage cancer screening.”
According to TipRanks’ stock analysis, Guardant Health scores a ‘Moderate Buy’ consensus rating from the Street. That comes with an average price target of $127.50 (59% upside potential).
Baird- Costco, Outperform rating
“COST’s strong fundamentals (including best-in-class traffic/comps) and durable competitive advantages continue to stand out within retail. With expanding structural cost advantages (which can help widen the company’s superior value proposition), a loyal membership base, and growing omni-channel capabilities, COST remains a rare growth staple with still-meaningful growth opportunities.”
According to TipRanks’ stock analysis, Costco scores a ‘Moderate Buy’ consensus rating from the Street. That comes with an average analyst price target of $309.06 (3% upside potential).
