One thing you don’t always get with Wall Street research and research analysts, is a large consensus of agreement. Whether it is clashing metrics, or just disagreements on the overall balance sheet strength and forward earnings potential, sometimes it is just hard to get different minds to think alike.
In a new research report from the Internet/e-commerce team at Merrill Lynch led by Justin Post, the analysts pulled just about every tidbit on Internet stocks than can be gleaned from current data, and much of the focus was on current sentiment. One part of the report we thought was interesting is the overall sell-side rankings on the top Internet stocks. The Merrill Lynch sell-side ranking metric is based on current sell-side rankings, where a 1 is a strong sell and a 5 is a strong buy. The ratings were a compilation of Bloomberg analyst ratings for each stock, including Merrill Lynch’s ratings.
Here are the five highest analyst ranked Internet stocks on Wall Street.
Wix.com Ltd. (NASDAQ: WIX) is the surprise overall winner on Wall Street, catching a score of 5. It should be noted that Wix is covered by far fewer analysts than some of the other, more high-profile names. The company is a leading global Web development platform, which recently announced the launch of its first vertically tailored solution, WixHotels, a complete booking engine that is fully integrated into a Wix website. Merrill Lynch likes the stock and has a $27 price target. The Thomson/First Call consensus estimate is even higher at $31.50. The stock closed Monday at $17.49 a share.
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Priceline Group Inc. (NASDAQ: PCLN) comes in with a strong 4.7 rating on the Merrill Lynch scale. The company stumbled just briefly when earnings were released last week showing slowing growth. The stock quickly rebounded as many of the Wall Street analysts covering the online travel giant noted it beat earnings estimates and gave forward guidance above expectations. Most on Wall Street agree that the growth potential remains and they see several long-term potential catalysts. Merrill Lynch rates the stock at Buy and has a $1,400 price target. The consensus target is higher at $1,488.65. Priceline closed Monday at $1,276.18.
Facebook Inc. (NASDAQ: FB) also ranks very high with the Wall Street analysts crowd, coming in on the Merrill Lynch rankings at 4.6. The company absolutely mauled second-quarter earnings estimates and almost all of Wall Street ratcheted up price targets. With mobile revenue and advertising numbers skyrocketing, the company has been a stellar performer over the past year. With well over a billion registered users around the world, Facebook is expected to continue to grow massive earnings and is now becoming competitive in search. The Merrill Lynch price target for the Buy-rated stock is $92. The consensus target is $86.15. The stock closed Monday at $74.59.
Amazon.com Inc. (NASDAQ: AMZN) also ranks very high across Wall Street, with a rating of 4.5. The Amazon Web Services division is considered the top player in the public cloud business. It delivers a set of services that together form a reliable, scalable and inexpensive computing platform. The company recently announced its CloudTrail security system, which is designed to work with all third-party reporting dashboards and alert systems. This helps to keep all stored data safe and secure. Combine this with the huge retail backbone, and everybody is in agreement. Merrill Lynch is along with the rest of Wall Street with a rating of Buy, as well as a $400 price objective. The consensus target is $389.42. Amazon closed at $334.53.
Yelp Inc. (NYSE: YELP) rounds out the top five and has a Merrill Lynch score of 4.4. The company is expected to grow revenue at a 54% compounded annual rate for the next two years. There also has been continued chatter on Wall Street about a potential buyer for Yelp. Many point to the synergies of a purchase by Yahoo!, while others suggest it would be a good fit for Expedia. Either way, Yelp has a massive salesforce and relationships with more restaurants than any other site. Merrill Lynch has a rating of Neutral on Yelp and an $82 price target, while the consensus target is $83.84. Shares closed Monday at $77.85.
Five stocks that are ranked very high at firms across Wall Street could bode well for aggressive tech investors. With September and October just around the corner, another sell-off could be as well. It may make sense to scale in a partial buy now, and wait and see if there isn’t a better entry point in the next six to eight weeks.
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