The Norwegian Cruise Line Norwegian Bliss cruise ship passes through John Hopkins Inlet in Glacier Bay, Alaska, July 11, 2019.
Tim Rue | Bloomberg | Getty Images
Wall Street analysts say there are still plenty of opportunities to invest in quality stocks despite a trade war that feels never ending to many investors.
CNBC looked through recent Wall Street research to find stocks that analysts like amidst the U.S.-China trade war.
They include Canada Goose, Akamai Technologies, Norwegian Cruise Lines, SolarEdge Technolgies and Maximus.
Since trade tensions ratcheted up Aug. 1, the S&P 500 is down more than 3%. Despite that, analysts say there’s no shortage of ways to play the pullback.
Solar panel manufacturer SolarEdge Technologies is one company that’s not seeing a tariff disruption, according to analysts at JMP Securities.
“They shifted production to Eastern Europe a while ago,” analyst Joseph Osha told CNBC.
“SEDG’s efforts to shift away from China supply for the U.S. market appear to be working out,” Osha also said in a recent note.
The firm has an outperform rating on the stock while shares of the company are up 25% this month.
Maximus is a company that provides business outsourcing services to governments around the globe.
According to analysts at Raymond James, the company has a lack of China exposure and actually benefits during a global growth slowdown.
“Couple this with the fact that MMS is idiosyncratic to the macro, with immaterial tariff exposure, no China exposure, and a model focused on social programs that typically thrive as global growth recedes makes for a very intriguing story,” they said.
The stock is up 3% over the last month.
Content delivery network provider Akamai Technologies was recently named a “top recession” pick by analysts at Piper Jaffray.
The firm likes the company’s lack of China exposure. “The underlying market dynamics, especially due to over-the-top delivery, online gaming, and cloud security, will help Akamai’s business hold up better than most in a downturn,” the analyst said.
Here’s what else analysts are saying about buying opportunities during the U.S.-China trade conflict:
DA Davidson- Canada Goose, Buy rating
“We believe the pullback in GOOS created by the China tariff-war, is overdone and creates a buying opportunity. While China’s move to let its currency drift lower in response to the U.S. administration move to impose additional tariffs could begin to dampen overall Chinese consumption through currency impact, we estimate that GOOS derives less than 10% of revenues directly from the Chinese consumer, compared to 30%-40% for most luxury goods brands. GOOS just opened its first store in China just about a year ago and should have about five stores in the country this year. Note that, as a Canadian based company, GOOS has minimal exposure to U.S. tariffs on its sourcing from China.
According to TipRanks, Canada Goose is a Moderate Buy consensus with an average analyst price target of $57 (35% upside potential).
Piper Jaffray- Akamai Technologies, Overweight rating.
“With rising macro-environment and recessionary concerns caused by global trade tensions, we wanted to highlight the CDN space, and specifically top-pick AKAM as our top networking “recession” pick. AKAM is our top idea for a macro down-turn due to: 1) a strong balance sheet / high-quality name; 2) secular drivers that can override a weakening macro and provide indirect consumer exposure; 3) lack of China exposure; & 4) incumbency. The secular drivers are the key aspect here, as we believe the underlying market dynamics, especially due to OTT, online gaming, and cloud security, will help Akamai’s business hold up better than most in a downturn.”
According to TipRanks, Akamai is a Moderate Buy consensus with an average analyst price target of $91 (2% upside potential).
Deutsche Bank- Norwegian Cruise Lines, Buy rating
“We also believe NCLH (and potentially one or more of its cruise peers, as well) could see incremental demand/inflows from investors seeking to minimize exposure to tariff/China risk. NCLH appears to check a lot of boxes (and we project that the company will be an active buyer of its stock near these levels in 3Q), though we fully appreciate that negative sentiment can be a difficult thing to overcome. Given the compelling risk/reward, however, we see the stock’s current level as an attractive entry point.”
According to TipRanks, Norwegian Cruise Line is a Strong Buy consensus with an average analyst price target of $64 (31% upside potential).
JMP Securities- SolarEdge Technolgies, Outperform rating
“Tariffs do not appear to be disrupting SEDG. News flow can be disconcerting, but SEDG’s efforts to shift away from China supply for the U.S. market appear to be working out. To be fair, SEDG’s gross margins are not expected to stay at Q2’s high levels, but it appears that the company has been able to manage its manufacturing ramp and the associated costs and complexity with few problems.”
According to TipRanks, SolarEdge Technologies is a Strong Buy consensus with an average analyst price target of $87 (1% upside potential).
Raymond James- Maximus, Market perform rating
“Maximus put together one of the better quarters/outlooks that we have seen in quite some time and the underlying trends/dynamics that make MMS attractive remain sound. Couple this with the fact that MMS is idiosyncratic to the macro, with immaterial tariff exposure, no China exposure, and a model focused on social programs that typically thrive as global growth recedes makes for a very intriguing story.”
According to TipRanks, Maximus is a Hold consensus with an average analyst price target of $83 (10% upside potential).
