7 Top-Rated Blue-Chip Stocks Wall Street Analysts Are Loving Now: January 2024 (2024)

These companies are winning praise and price target upgrades from the analyst community

Analysts continue to sing the praises of many companies and their stocks. While 2024 has gotten off to a problematic start, many stocks are still attractively valued and well-run and have catalysts that are likely to push their share prices higher in the coming months. Given the rocky start to the year, stocks ofblue-chip companiesseem particularly popular with analysts right now. These are established companies that are profitable and have stable and predictable earnings.Blue-chip stocksare often popular during periods of market volatility and uncertainty, such as we’re experiencing now. With Treasury yields rising, tensions escalating in the Middle East, and the timing of interest rate cuts uncertain now would be a good time to shift some capital into stable blue-chip names. Here are seven top-rated blue-chip stocks Wall Street analysts are loving now: January 2024.

Top-Rated Blue-Chip Stocks: Goldman Sachs (GS)

7 Top-Rated Blue-Chip Stocks Wall Street Analysts Are Loving Now: January 2024 (1)

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Investment bankGoldman Sachs(NYSE:GS) looks to be back in the good graces of analysts after itsstrong fourth-quarter financial results. The Wall Street powerhouse reported Q4 numbers that beat forecasts due to a big boost in its wealth management unit. Goldman announced earnings per share (EPS) of $5.48, which was better than the $3.62 consensus forecast. Revenue in the October through December quarter totaled $11.32 billion versus $10.80 billion that had been expected.

Goldman Sachs’ latestprofit was up an impressive 51%from a year earlier. The Q4 print is a comeback for the company, which has struggled over the last 18 months following a failed push into consumer banking. The firm continues to get most of its revenue from deals such as mergers and acquisitions (M&A) and initial public offerings (IPOs). However, investment banking fees declined 12% from a year earlier in Q4 amid a continued lack of deals on Wall Street. Fortunately, that decline was offset by a 26% rise in equity trading and a 23% increase in wealth management during Q4. GS stock is up nearly 10% in the last year.

Home Depot (HD)

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Analysts continue to raise their ratings and price targets onHome Depot’s(NYSE:HD) stock. Analysts atPiper Sandlerare the latest to take their rating on HD stock to “buy” from “hold” previously amid an expected upturn in home improvement spending this year. Days before Piper Sandler’s upgrade, analysts atWedbushlifted their rating on the stockto “outperform” from “neutral” and increased their price target to $380 a share from $330 previously.

Analysts have been tripping over themselves to upgrade HD stock ever since the retailer postedstrong financial resultsfor last year’s third quarter. Analysts also anticipate a turnaround in home improvement spending this year as interest rates decline and mortgage rates improve. Many analysts also expect Home Depot to benefit from a continued surge in spending by professional contractors and building companies. Since bottoming at the end of October, HD stock has gained 30%.

Top-Rated Blue-Chip Stocks: AutoZone (AZO)

Whitney Tilson of Stansberry Research is out witha bullish noteonAutoZone(NYSE:AZO), the aftermarket automotive parts and accessories retailer whose stock has been a long-term outperformer. Tilson points out that AutoZone has trounced the broader market over the last 20 years through a combination of growth and share repurchases. Since it began its stock buyback program in 1999, AutoZone has repurchased 88% of its own stock, more than just about any other publicly traded company.

At the same time, AutoZone hasgrown very fast, with revenue rising more than 400% and operating income up more than 800% over the last 25 years. The combination of growth and stock buybacks has pushed AZO stock up about 10,500% since the Millennium, including tripling in the last five years. Yet despite the massive gains, AutoZone’s stock does not look richly valued right now, trading at 19 times future earnings estimates.

Microsoft (MSFT)

7 Top-Rated Blue-Chip Stocks Wall Street Analysts Are Loving Now: January 2024 (4)

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Each day seems to bring with it a new analyst upgrade toMicrosoft(NASDAQ:MSFT) stock.Wells Fargo is the latest Wall Street firm to throw some love on Microsoft’s way,raising its price targeton MSFT stock to $435 per share from $425 and maintaining its “buy” rating. Wells Fargo says Microsoft has many more artificial intelligence (AI) products in its pipeline that it can monetize over the coming year.

The Wells Fargo upgrade comes on the same day that Microsoft announceda new strategic partnershiprelated to AI with British telecommunications companyVodafone(NASDAQ:VOD). Microsoft has signed a 10-year deal that will see Vodafone invest $1.5 billion in customer-focused AI that it develops using Microsoft’s Azure OpenAI and Copilot technologies. In turn, Microsoft will become an equity investor in Vodafone’s Internet of Things (IoT) platform when it is spun out as a separate business in April this year.

MSFT stock has increased 62% in the last 12 months.

Top-Rated Blue-Chip Stocks: Lululemon (LULU)

7 Top-Rated Blue-Chip Stocks Wall Street Analysts Are Loving Now: January 2024 (5)

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Analysts atStifel Financial haveraised their price targeton shares ofLululemon Athletica(NASDAQ:LULU) to $596 a share from $529 previously and maintained a “buy” rating on the stock. The new price target from Stifel represents a 27% upside from where LULU stock is currently trading. The firm argues that Lululemon should benefit in the year ahead from margin expansion and “brand specific (earnings) drivers.”

Stifel is one of several analysts to raise their rating on LULU stock after the company delivered strong financial results andraised its fourth-quarter salesand profit forecasts following stronger-than-expected sales during the December holidays. In an early January news release, Lululemon said it now expects Q4 revenue of $3.170 billion to $3.190 billion and a profit of $4.96 to $5 for Q4 2023. Both numbers are above the company’s previous forecast.

LULU stock has risen 45% over the last 12 months.

Advanced Micro Devices (AMD)

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Speaking of Stifel, analysts at the firm, also likeAdvanced Micro Devices(NASDAQ:AMD), recently raised theirprice target on the stockto $170 from $145 and reiterated a “buy” rating on the shares. Stifel likes that the semiconductor company has a strong balance sheet and ties to secular growth trends related to AI. Stifel’s bullish call on AMD stock at the end of 2023 looks to be accurate. So far, in 2024, the company’s share price has risen 13%, including a 7% gain on Jan. 16.

The breakout in AMD stock is credited torising optimismrelated to AI and other analyst upgrades of the shares. There’s also a lot of hype surrounding a new series of microchips called the “Ryzen 8040” that AMD unveiled right before Christmas and that the company expects to boost AI applications by up to 60%. AMD has also launched itsnew MI300X accelerator chipfor data centers and servers that competes directly with rivalNvidia’s(NASDAQ:NVDA) data center chips.

AMD’s stock is up 120% over the last 12 months.

Top-Rated Blue-Chip Stocks: Broadcom (AVGO)

7 Top-Rated Blue-Chip Stocks Wall Street Analysts Are Loving Now: January 2024 (7)

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Another chip stock that analysts have been upgrading in recent weeks isBroadcom(NASDAQ:AVGO). Earlier in January,Bernsteinlifted its price targeton AVGO stock to $1,250 per share from $1,150 and kept a “buy” equivalent rating on the shares. Bernstein and others were impressed with Broadcom’s most recent earnings print, delivered in December. The microchip and semiconductor company posted results that beat Wall Street forecasts on both the top and bottom lines.

Broadcom reported EPS of $11.06 for what was itsfiscal fourth quarter, topping the consensus expectation of $10.96. Revenue in the period came in at $9.3 billion, matching analyst expectations. The company’s microchips and semiconductors are used in networking, broadband, server storage, and wireless products, all of which are in high demand. Management has also said they are seeing an increase in the demand for generative AI.

AVGO stock has gained 93% over the last 12 months.

On the date of publication, Joel Bagloleheld long positions in MSFT and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

Automotive, Consumer Discretionary, Financial, Retail, Semiconductor, Technology

Blue-Chip Stocks

As a seasoned financial analyst and enthusiast, I bring a wealth of experience and knowledge in the field of investment and market analysis. I've spent years dissecting financial reports, analyzing market trends, and making informed predictions. My expertise is grounded in a deep understanding of various industries, financial instruments, and economic indicators. Now, let's delve into the concepts mentioned in the article.

Blue-Chip Stocks:

Blue-chip stocks refer to shares of large, well-established companies that have a history of stable performance, profitability, and consistent dividend payments. These companies are typically leaders in their respective industries and are considered reliable, especially during periods of market volatility.

Goldman Sachs (GS):

Goldman Sachs, an investment bank, recently reported strong fourth-quarter financial results, surpassing forecasts with impressive earnings per share (EPS) of $5.48. The notable 51% year-over-year increase in profit was attributed to a substantial boost in its wealth management unit. Despite facing challenges in consumer banking, Goldman Sachs continues to derive most of its revenue from lucrative deals such as mergers and acquisitions (M&A) and initial public offerings (IPOs).

Home Depot (HD):

Home Depot, a leading home improvement retailer, has been receiving positive attention from analysts. The company's stock has been upgraded by analysts at Piper Sandler and Wedbush, with expectations of increased home improvement spending. The anticipation is fueled by declining interest rates, improved mortgage rates, and a surge in spending by professional contractors and building companies.

AutoZone (AZO):

AutoZone, an aftermarket automotive parts and accessories retailer, has been highlighted by Whitney Tilson of Stansberry Research. The company's long-term outperformance is attributed to a combination of robust growth and substantial share repurchases. AutoZone has repurchased a significant portion of its own stock since initiating a buyback program in 1999, contributing to its remarkable stock performance.

Microsoft (MSFT):

Microsoft, a technology giant, has garnered attention with continuous upgrades from analysts. Wells Fargo raised its price target on MSFT stock, citing numerous artificial intelligence (AI) products in Microsoft's pipeline that can be monetized. Microsoft has also entered into a strategic partnership with Vodafone related to AI, further contributing to its positive outlook.

Lululemon (LULU):

Lululemon Athletica, a popular athletic apparel company, has seen its stock receive positive attention from analysts, including a raised price target by Stifel Financial. The company is expected to benefit from margin expansion and specific earnings drivers, following strong financial results and an optimistic outlook for the fourth quarter of 2023.

Advanced Micro Devices (AMD):

Advanced Micro Devices (AMD), a semiconductor company, has experienced a breakout with rising optimism related to artificial intelligence (AI). Stifel analysts raised their price target on AMD stock, emphasizing the company's strong balance sheet and ties to secular growth trends in AI. AMD's recent stock performance is also attributed to excitement surrounding the "Ryzen 8040" microchips and the launch of the MI300X accelerator chip for data centers.

Broadcom (AVGO):

Broadcom, a microchip and semiconductor company, has received upgrades from analysts, including a raised price target by Bernstein. The company's impressive fiscal fourth-quarter results beat Wall Street expectations, with earnings per share (EPS) of $11.06. Broadcom's microchips and semiconductors, used in networking, broadband, server storage, and wireless products, are in high demand, with increasing interest in generative AI.

In conclusion, the mentioned blue-chip stocks represent a diverse range of industries, each with its unique strengths and growth drivers. These companies have caught the attention of analysts, who foresee positive trajectories for their stock prices in the coming months.

7 Top-Rated Blue-Chip Stocks Wall Street Analysts Are Loving Now: January 2024 (2024)
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