Promising Stocks for the Long Haul, According to Top Wall Street Analysts

Despite pressures on consumer spending, many companies delivered solid results during the earnings reporting season.

Top Wall Street analysts' recommendations should be tracked by investors seeking stocks that can withstand short-term pressures and deliver over the long term.

According to TipRanks, which ranks analysts based on their past performance, the Street's top pros favor these three stocks.

Take-Two Interactive Software

This week's first choice is game developer (TTWO). In August, the company reported better-than-expected adjusted earnings for the first quarter of fiscal 2025.

Colin Sebastian, a Baird analyst, has maintained a buy rating on Take-Two Interactive stock with a price target of $172. The analyst is optimistic about the company's upcoming releases and anticipates its bookings to increase by at least 40% in the next fiscal year, following mid-single-digit growth this year.

Sebastian's growth estimate for bookings is supported by the release of highly anticipated titles such as Civilization VII, Borderlands 4, and GTA VI. Additionally, he predicts that the company's new console/PC releases will bring in $2.25 billion in incremental bookings. The mobile business is expected to contribute $3.1 billion, while catalog/live services will generate $2.5 billion in the full year.

Although management believes it will release GTA VI next year, the analyst predicts that any delay between two fiscal years will have minimal impact on TTWO's two-year earnings trajectory. He anticipates that this crucial release will generate approximately $3 billion in bookings in the first year, while also increasing the company's financial flexibility with over $2 billion in free cash flow.

Sebastian stated that in the future beyond the next 12-24 months, Take Two would benefit from the long-tail of live services/catalog sales and further depth in the pipeline with sequels to Red Dead, BioShock and Max Payne, and perhaps new 2K sports franchises.

Sebastian is ranked No. 286 among over 9,000 analysts on TipRanks, with a profitable rating 56% of the time and an average return of 12.8%. (Check out TTWO Ownership Structure on TipRanks)

Costco Wholesale

Peter Benedict, a Baird analyst, is optimistic about the future of membership-only warehouse chain Costco. In August, the company reported a 7.1% increase in its net sales for the retail month, which ended on September 1.

In August, Costco's comparable sales grew by 7.1%, with Benedict observing that this was a sequential increase compared to the 7.2% growth in July. Despite some moderation in average traffic growth, stronger traffic helped to offset this increase.

Benedict raised his Q4 fiscal 2024 EPS forecast to $5.10 from the Street's consensus estimate of $5.07 per share due to better-than-expected sales in the quarter. The analyst noted that COST's consumer traction remains strong amid an increasingly challenging spending environment.

Despite continued softness in discretionary categories across most of the retail sector, the company exhibited solid core comparable sales growth and maintained persistent strength in the non-foods area, as highlighted by Benedict.

The analyst maintains that Costco's "growth staple" appeal remains strong due to its consistent performance, store network expansion, and encouraging membership key performance indicators, as well as the recently announced fee hike. He has reaffirmed a buy rating on COST stock with a price target of $975.

Among more than 9,000 analysts tracked by TipRanks, Benedict ranks No. 30. His ratings have been successful 71% of the time, delivering an average return of 16.1%. (See COST Options Trading on TipRanks)

Netflix

This week, streaming giant NFLX is the third pick. Despite facing macro pressures and intense competition in the streaming industry, the company has managed to impress investors with its efforts to combat password sharing and the introduction of an ad-supported tier.

JPMorgan analyst Doug Anmuth believes that although advertising is not in Netflix's core business, the company has the potential to become a significant player in the ad industry as its scale and monetization grow in the coming years. He predicts that ad revenue, excluding subscriptions, will make up more than 10% of Netflix's revenue by 2027.

Netflix's ad tier is currently smaller than its competitors, such as Amazon Prime Video, which automatically includes its members in its ad-supported tier. However, the analyst believes that Netflix can increase its scale by adjusting its plans and pricing, offering bundled deals, and providing live content that has broad appeal.

Netflix's ad tier may decrease its average revenue per member, but the company's 150% increase in upfront ad sales commitments, larger scale, and better attention to ad formats and ad technology should result in higher monetization.

Anmuth is confident that Netflix will increase its revenue in the mid-teens this year and in 2025, enhance its profit margins, and generate multi-year free cash flow growth. He maintained a buy rating on NFLX stock with a price target of $750.

Among more than 9,000 analysts tracked by TipRanks, Anmuth ranks No. 99. His ratings have been successful 61% of the time, delivering an average return of 17.7%. (See NFLX Financials on TipRanks)