Elon Musk, founder of SpaceX and chief executive officer of Tesla Inc., arrives at the Axel Springer Award ceremony in Berlin, Germany, on Tuesday, Dec. 1, 2020.
Johannessen-Koppitz | Bloomberg | Getty Images
The second quarter of 2021 is underway, and Wall Street analysts are reviewing the stocks they cover. At the same time, concerns over new variants of COVID-19 continue to paint a picture of uncertainty.
So, what does this mean for investors looking for fresh investment opportunities? There are still stocks poised to outperform, and one way to find them is by following the recommendations of analysts with a proven track record of success. TipRanks analyst forecasting service attempts to identify the best-performing analysts on Wall Street, or the analysts with the highest success rate and average return per rating. These metrics take the number of ratings published by each analyst into account.
Here are the best-performing analysts’ top stock picks right now:
The Chefs’ Warehouse, a distributor of specialty food products, focuses on independent and chef-inspired restaurants.
Stating in a research note that this name has “great ingredients for a great reopening,” Lake Street Capital analyst Ben Klieve initiated coverage of The Chefs’ Warehouse with a Buy rating on April 5. Additionally, he set a $38 price target, which puts the upside potential at 21%.
Klieve acknowledges the fact that the company was up against “unprecedented headwinds throughout 2020.” However, he argues that these headwinds are subsiding.
“Amid nationwide restrictions on indoor dining, we believe the company made it through 2020 in as good of a position as could be expected. We look for significant sequential improvement throughout 2021 as governments lift restrictions and a return to near-normal conditions by the end of 2022. We expect the stock can return to pre-pandemic levels as investors better-appreciate Chefs’ competitive position, economic moat, and earnings power,” Klieve commented.
Given that CHEF‘s niche is the independent and chef-inspired restaurant space, Klieve believes the company’s position within the distribution industry is solid, with “significant pent-up demand exists for a return to these same restaurants for indoor dining,” in the analyst’s opinion. He added, “Company management describes an investment in CHEF as investing in one’s favorite neighborhood restaurant, an apt description in our view, and one which we believe represents a significant catalyst for 2021.”
When it comes to the valuation, Klieve tells investors “the CHEF value proposition is not predicated on where the stock can be in a manner of days or weeks, but where a broadly reopened economy can take the stock in a year.”
Currently, Klieve is tracking a 62% success rate and 29.9% average return per rating.
On April 4, electric vehicle maker Tesla released its 1Q21 production and delivery results, with the figures coming in ahead of the Street’s estimates. In response to this development, Oppenheimer analyst Colin Rusch reiterated a Buy rating and a price target of $1,036 (54% upside potential).
Digging into the details of the announcement, total 1Q deliveries came in at 184,800, beating the 172,230 consensus estimate. Model 3/Y deliveries landed at 182,780, exceeding the consensus estimate by over 20,000. Although Model S/X deliveries of 2,020 were well below analysts’ expectations, the company was “in the early stages of ramping the new version of those vehicles,” according to Rusch.
“We believe deliveries were weighted to China, and to a lesser extent the U.S., as supply chain friction is lower in China. We believe mix toward China will benefit GM and help offset inflationary pressures on input costs. We expect bears to point to low Model S/X sales as indicative of demand for its premium vehicles, but we believe the transition to the new design will spur renewed demand for the vehicles,” Rusch explained.
Given that Tesla was able to deliver this solid performance amid supply constraints and the progress it has made on the commercialization of higher level ADAS functionality, Rusch is optimistic about the growth prospects.
“We remain constructive on shares looking toward the 1Q21 call and automotive margin details along with ADAS commentary as key drivers of the stock,” Rusch opined.
Earning the 7th spot on TipRanks’ list of best-performing analysts, Rusch has achieved a 63% success rate as well as an impressive 69.1% average return per rating.