Investing

Wall Street Thinks These 3 Buffett Stock Picks Have Up to 21% Upside

Trey Thoelcke

Published: May 15, 2024 9:45 am

Last Updated: May 16, 2024 12:16 pm

24/7 Insights:

• Warren Buffett’s Berkshire Hathaway stock holdings have a market value of $370.8 billion dollars.
• Amazon (NASDAQ: AMZN): BRK holds 10,000,000 shares of the stock.
• Occidental Petroleum (NYSE: OXY):  Berkshire owns 28% of the oil and gas producer.
• T-Mobile (NASDAQ: TMUS): Wall Street thinks the mobile phone carrier has 44% upside this next year.

Is anyone surprised that when Warren Buffett and Berkshire Hathaway Inc. (NYSE: BRK-A) part with shares of Apple Inc. (NASDAQ: AAPL), the largest stake in the Berkshire portfolio, it makes headlines? The so-called Oracle of Omaha is probably the best-known investor in the world, certainly one of the most successful. Millions of investors and aspiring investors still hang on his every word. So, is it time to dump Apple then? Not so fast. At the recent annual shareholder meeting, Buffett affirmed that he remains a big proponent of Apple, and he does not expect the stock will stop being the top holding in the Berkshire portfolio. The trim was apparently in anticipation of coming tax changes, according to Inc.

However, Wall Street analysts have not been especially optimistic about Apple, at least in the short term. Sentiment is changing though. The consensus price target had indicated less than 3% upside potential, but that has increased to almost 9%. Yet, there are other Buffett stock picks for which the analysts have even higher hopes. Those include Amazon.com Inc. (NASDAQ: AMZN), Occidental Petroleum Corp. (NYSE: OXY), and T-Mobile US Inc. (NASDAQ: TMUS).

Amazon

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• Berkshire Hathaway holding: 10 million shares
• Anticipated upside: over 21%

This Seattle-based e-commerce and cloud-computing colossus was founded in 1994 and went public in 1997. Competitors include Alibaba Group Holding Ltd. (NYSE: BABA), Alphabet Inc. (NASDAQ: GOOL), Oracle Corp. (NYSE: ORCL), and Walmart Inc. (NYSE: WMT). Amazon posted strong first-quarter results due in part to its artificial intelligence prospects. More recently, the company announced plans to spend $1.3 billion in France on cloud infrastructure.

Amazon’s share price is almost 69% higher than a year ago, including up more than 22% year to date. It recently hit an all-time high of $191.70 per share, and analysts on average anticipate that the stock will climb more than 21% to $226.66 a share in the next 52 weeks. The high price target is up at $500. Reaching that target would be a gain of about 169%.

Occidental Petroleum

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• Berkshire Hathaway holding: 248 million shares
• Anticipated upside: around 14%

This oil and natural gas exploration and production is headquartered in Houston. The company was founded in 1920, and in 1981 it went public. Among its competitors are ConocoPhillips (NYSE: COP), Devon Energy Corp. (NYSE: DVN), Diamondback Energy Inc. (NASDAQ: FANG), EOG Resources Inc. (NYSE: EOG), and Hess Corp. (NYSE: HES). The first-quarter bottom line exceeded expectations but the top line fell short. Occidental made a notable acquisition late last year to bolster its position in the Permian Basin.

Its share price is almost 9% lower than a month ago, but it is still up more than 5% year to date, which is a little better than the performance of the Dow Jones industrial average. In the past year, the stock has changed hands for as much as $71.19 per share. The mean price target is higher than that, at $72.33. Reaching that target would be a 14.1% gain in the next 12 months. One analyst sees the stock going as high as $90 in that time. Yet, the consensus rating from analysts is Hold.

T-Mobile

Source: Tak Yeung / iStock Editorial via Getty Images

• Berkshire Hathaway holding: 5 million shares
• Anticipated upside: more than 14%

T-Mobile provides mobile communications services in the United States, Puerto Rico, and the U.S. Virgin Islands and is headquartered in the Seattle area. It was founded in 1994, and it had an IPO in 2007. Competitors include AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), and Vodafone Group PLC (NASDAQ: VOD). T-Mobile recently acquired Mint Mobile. It also posted mixed quarterly results but raised its 2024 guidance. Last month, the FCC fined T-Mobile and its peers for sharing customer data.

The share price is more than 13% higher than a year ago, which is less than the S&P 500’s gain. The stock is up only about 2% since the beginning of the year. The 52-week high is $168.64, but the consensus price target is up at $187.41. One analyst predicts that shares will go to $235.00 in the coming year. Hitting that target would be a gain of almost 44%.

Warren Buffett Can’t Get Enough of Seven Dividend Monsters

Is Warren Buffett Still Relevant?

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Forbes asked in 2019 whether Buffett was still relevant. The answer was yes, for his vision, his resilience, and his principles. Despite the current market and economic uncertainty, little about Buffett and his style of investing has changed since then, as he approaches 94 years of age. He built his wealth by value investing. That is, by buying into businesses with a solid foundation but with stocks that trade for less than their intrinsic value. It is a strategy that made Berkshire Hathaway into a conglomerate with a current market cap near $888 billion and made Buffett one of the wealthiest persons in the world. No wonder his words and actions still make headlines.

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