Warren Buffett is one of the most successful investors of all time and runs a holding company Berkshire Hathaway (BRK.A) (BRK.B), which owns primarily the stocks of blue-chip companies with strong balance sheets and healthy cash flows. Berkshire Hathaway reveals its current holdings each quarter, which Wall Street and investors track closely. Based on Buffett’s 13F Form filed on May 16, Berkshire Hathaway’s stock portfolio value increased to $364 billion from $331 billion.
The stock market has experienced a rocky year so far, as investors remain concerned about the Federal Reserve’s tighter monetary policy to combat inflationary pressure, a slowdown in economic growth, and ongoing geopolitical instability. However, despite recent macroeconomic and geopolitical shocks, Buffett’s investments are expected to thrive in the long run. Furthermore, Buffett considers the recent sell-off as an opportunity to increase his stock investments.
Wall Street analysts expect popular Warren Buffett stocks Amazon.com, Inc. (AMZN), RH (RH), StoneCo Ltd. (STNE), Snowflake Inc. (SNOW), and NU Holdings Ltd. (NU) to rally more than 50% in price in the coming months. So, we think it could be worth adding these stocks to one’s watchlist.
Amazon.com, Inc. (AMZN)
AMZN in Seattle, Wash., offers a wide range of products and services to customers in North America and internationally. The company operates through three segments: North America; International; and Amazon Web Services (AWS). It sells merchandise and content through physical and online stores purchased for resale from third-party sellers. It also manufactures, markets, and sells electronic devices and develops and produces media content. AMZN has a 0.3% weighting in Buffett’s portfolio.
On May 18, AMZN introduced the new Fire 7 and Fire 7 Kids tablets. The products guarantee entertainment, video calling, and fun for every family member with 40% longer battery life, USB-C for easy charging, 30% faster processor, and double the RAM. This launch is expected to expand the company’s product portfolio and boost revenue streams.
On April 21, AMZN’s Amazon Web Services, Inc. (AWS) announced the general availability of AWS Amplify Studio, a new visual development environment for creating web application user interfaces (UIs), Amazon Aurora Serverless v2 that scales thousands of transactions in a fraction of a second, AWS IoT TwinMaker, a new service to create digital twins of real-world systems like buildings, factories, industrial equipment, and production lines efficiently.
AMZN's total net sales increased 7.3% year-over-year to $116.44 billion, while its net service sales grew 17.6% year-over-year to $59.98 billion in its fiscal 2022 first quarter, ended March 31, 2022. Its net other income was valued at $8.69 billion for the first quarter. The company’s net cash provided by investing activities and net cash provided by financing activities amounted to $906 million and $1.99 billion, respectively.
Analysts expect AMZN's revenue for its fiscal 2022 third quarter, ending Sept. 30, 2022, to come in at $129.18 billion, representing a 16.6% rise year-over-year. The Street expects the company's EPS for the next quarter to be $8.18, representing 33.6% growth year-over-year.
The stock has declined 25.5% in price over the past month and 34.5% over the past year. It closed yesterday's trading session at $2,135.50.
Among the 37 Wall Street analysts that rated AMZN, 35 rated it Buy, one rated it Hold, and one rated it Sell. The 12-month median price target of $3,647.08 indicates a 70.8% potential upside. The price targets range from a low of $2,800.00 to a high of $4,250.00.
Click here to checkout our Retail Industry Report for 2022
RH (RH)
RH in Corte Madera, Calif., operates as a home furnishings retailer. The company offers a wide range of products, including furniture, textiles, lighting, bath-ware, décor, and furnishings. RH provides its products through its retail galleries, sourcebooks, catalogs, and online through rh.com, rhbabyandchild.com, rhteen.com, rhmodern.com, and waterworks.com. RH represents 0.2% of Buffett’s portfolio.
This month, RH completed $500 million term debt financing utilizing a 2022 incremental amendment through RH’s subsidiary, Restoration Hardware, Inc., as the borrower and Bank of America Corp. (BAC) as administrative agent and lender. The proceeds from the financing are expected to be used for general corporate purposes and to create long-term value for the company’s shareholders.
RH's adjusted net revenues increased 10.9% year-over-year to $901.54 million in its fiscal 2022 fourth quarter, ended Jan.29, 2022. Its adjusted gross profit improved 17.8% year-over-year to $454.30 million. The company’s adjusted operating income rose 18.1% year-over-year to $227.01 million. RH’s adjusted net income and adjusted net income per share came in at $164.03 million and $5.66, respectively, registering a rise of 14.3% and 10.4% from the prior-year period.
Analysts expect RH's revenue for its fiscal 2023 first quarter, ending April 30, 2022, to come in at $924.76 million, representing a 7.4% rise year-over-year. The Street expects the company's EPS for the ongoing quarter to come in at $5.35, representing a 9.4% increase year-over-year. The company has an impressive earnings history; it has topped the consensus EPS estimates in each of the trailing four quarters.
The stock has plunged 20.7% in price over the past month and closed yesterday's trading session at $256.17.
Among the 16 Wall Street analysts that rated RH, 10 rated it Buy, five rated it Hold, and one rated it Sell. The 12-month median price target of $479.00 indicates an 87% potential upside. The price targets range from a low of $330.00 to a high of $650.00.
Click here to checkout our Retail Industry Report for 2022
StoneCo Ltd. (STNE)
Headquartered in George Town, the Cayman Islands, STNE offers financial technology solutions to merchants and integrated partners. It provides an end-to-end, cloud-based technology platform to conduct electronic commerce across Brazil's in-store, online, and mobile channels. The company distributes its solutions through proprietary Stone Hubs and sells them through a sales team to brick-and-mortar and digital merchants. It serves more than 1,766,100 clients. Buffett has a 3.3% stake in STNE.
In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, STNE's total revenue and income increased 87% year-over-year to R$1.87 billion ($387.31 million). Its net revenue from transaction activities and other services grew 53% year-over-year to R$512.70 million ($106.19 million), while net revenue from subscription services and equipment rental rose 234.5% year-over-year to R$408.10 million ($84.53 million). Its adjusted EBITDA improved 30.1% from the year-ago value to R$684.70 million ($141.82 million). The company’s cash and cash equivalents rose 83.7% year-over-year to R$4.50 billion ($932.04 million).
Analysts expect STNE’s revenue for the fiscal year 2022 ending Dec. 31, 2022, to come in at $1.80 billion, indicating an 87.6% increase year-over-year. Also, the $0.34 consensus EPS estimate for the current year represents a 134.5% rise from the previous year.
Shares of STNE have gained marginally over the past month and closed yesterday’s trading session at $9.43.
Among the 12 Wall Street analysts that rated STNE, three rated it Buy, while nine rated it Hold. The 12-month median price target of $15.42 indicates a 63.5% potential upside. The price targets range from a low of $12.00 to a high of $28.00.
Snowflake Inc. (SNOW)
SNOW in San Mateo, Calif., is a provider of cloud-based data platforms in the U.S. and internationally. The company’s platform provides Data Cloud that enables customers to consolidate data into a single source to drive business insights, share data and build a data-driven application. Its platform supports a multi-cloud strategy and supports a variety of workloads, including data science, data engineering, data warehousing, data sharing, and data application development. SNOW has a 0.2% weighting in Buffett’s portfolio.
On May 18, SNOW announced that Stripe, a financial infrastructure platform for businesses, had joined the Snowflake Data Cloud and Retail Data Cloud. “By enabling Stripe data natively in the Retail Data Cloud, retailers and CPGs can more seamlessly unlock vital data for business value. As companies bring together data from across their business ecosystem into Snowflake, the addition of Stripe data will enable companies to deliver better experiences to their customers and power future growth,” said Rosemary Hua, global head of Retail & CPG at SNOW.
On May 2, SNOW and Dell Technologies (DELL) collaborated to connect DELL’s enterprise storage portfolio data with SNOW’s Data Cloud. This collaboration will offer greater flexibility while operating in multi-cloud environments, meet data sovereignty requirements, and accelerate insights. This partnership is expected to boost the company’s growth and profitability.
SNOW's revenue has increased 84.5% year-over-year to $422.37 million, while its gross profit has grown 108.6% year-over-year to $274.44 million in its fiscal 2023 first quarter, ended April 30, 2022. Its cash and cash equivalents and total current assets amounted to $1.06 billion and $4.34 billion, respectively, as of April 30. In addition, the company’s net cash provided by operating activities came in at $184.61 million, registering a 744.8% increase year-over-year.
The $2.03 billion consensus revenue estimate for its fiscal year 2023, ending Jan. 31, 2023, represents a 66.2% improvement from the last year. The company has surpassed the consensus revenue estimates in each of the trailing four quarters. Analysts expect SNOW’s EPS to grow 1,133% year-over-year for the current year.
The stock has declined 25.8% in price over the past month and closed yesterday’s trading session at $132.77. However, the 12-month median price target of $252.46 indicates a 90.2% potential upside. The price targets range from a low of $150.00 to a high of $415.00. Among the 25 Wall Street analysts that rated SNOW, 17 rated it Buy, seven rated it Hold, while one rated it Sell.
Click here to check out our Cloud Computing Industry Report for 2022
NU Holdings Ltd. (NU)
Headquartered in Sao Paulo, Brazil, NU operates as a digital services platform and technology company primarily in Brazil, Mexico, and Colombia. The company provides Nu credit and debit cards, ultraviolet credit and debit cards, and mobile payment solutions. In addition, it offers savings solutions, such as Personal Accounts and Nu Business Accounts. It also offers investment products and ETF products. NU represents 0.1% of Buffett’s portfolio.
On Dec. 8, 2021, NU priced its initial public offering, consisting of an international offering of 289,150,555 Class A ordinary shares. NU might use the net proceeds from the offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. It may also use the proceeds to acquire or invest in businesses, products, services, and technologies.
In its fiscal 2022 first quarter, ended March 31, 2022, NU's total revenue increased 258% year-over-year to $877.27 million, while its gross profit improved 154.2% from its year-ago value to $294.01 million. The company’s cash flows generated from operating activities came in at $78.30 million for the period. Also, its adjusted net income increased 184.9% from the prior-year period to $10.10 million.
Analysts expect NU's revenue for its fiscal year 2022 fourth-quarter, ending Dec. 31, 2022, to be $1.35 billion, representing an 112.5% rise year-over-year. The Street expects the company's EPS for the same quarter to increase 46.7% from the same period in 2021. The stock has decreased 46.6% over the past month and 65.3% over the past six months. It closed yesterday’s trading session at $3.59.
Of the four Wall Street analysts that rated NU, three rated it Buy, while one rated it Hold. The 12-month median price target of $8.00 indicates a 122.8% potential upside. The price targets range from a low of $5.00 to a high of $11.00.
AMZN shares were trading at $2,211.71 per share on Thursday morning, up $76.21 (+3.57%). Year-to-date, AMZN has declined -33.67%, versus a -14.73% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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