J.P. Morgan analysts have published their monthly list of top idea stocks, and it includes some names you may know.
Stocks in three main categories are listed: near-term, growth, and value. All stocks have a high ratings at the investment company.
Progyny (PGNY), the New York fertility-benefits-management business, has announced the addition of one new stock on the list for May. The stock is part of the growth strategy.
The most important stocks on the growth list, ranked in order of market capitalization, are Amazon (AMZN) - Get Microsoft Corporation Report, Eli Lilly (LLY) - Get Eli Lilly and Company Report, and Danaher (DHR) - Get Danaher Corporation Report, which provides medical and industrial goods.
AbbVie (ABBV) - Get AbbVie, Inc. Report, McDonalds (MCD) - Get McDonald''s Corporation Report, and Alternative-investment manager Brookfield Asset Management (BAM) - Get Brookfield Asset Management Inc. Class A Report.
Get Bank of America Corp Report on a near-term stock on the list.
Morningstar on Amazon
Amazon''s stock has dropped 14% since it issued a mixed earnings report last week. Morningstar analyst Dan Romanoff cut his fair-value estimate for the Seattle e-commerce and tech giant to $3,850 from $4,100, but the new figure is still more than half the recent stock price of $2,488, and it assigns Amazon a wide moat.
On the negative side, the operating margin was a concern as inflation, excessive labor, and excessive capacity ate into profitability, which was quite short of our expectations, according to a commentary on April 29.
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We anticipate that profitability problems will be a problem for a couple of quarters and perhaps the next year, though we anticipate that the second half of the year will be successful.
According to Romanoff, on the downside, Amazon dominates its service offerings, particularly for e-commerce and cloud services.
Because of its size and scale, it enjoys many competitive advantages and has emerged as the clear e-commerce leader.
Morningstar on McDonalds
In an April 29 interview, Morningstar analyst Sean Dunlop gives a mixed view on McDonalds. We see large chain operators like McDonald''s as the best positioned to handle difficult economic situations.
That operators are negotiating leverage over suppliers, competitive pricing, and robust digital platforms, according to Dunlop. Dense, the market is now outrunning [McDonalds] fundamentals.
McDonalds has a difficult comparaison, with early signs of customer pressure, which is lowering sentiment and a mediocre trading down the restaurant," he said.
Dunlop gives McDonalds a wide moat and puts fair value at $227. The stock has recently traded at $245.71.
The author of this book owns shares of Amazon, Microsoft, Elie Lilly, AbbVie, and McDonalds.