As the year draws to a close, Wall Street analysts are announcing their top predictions for the following year. It’s a time-honored habit in most walks of life to take a lighthearted glance ahead and begin giving guidance based on the advice of a metaphorical crystal ball.
Analysts have carefully examined each stock, looking at its historical and current performance, patterns across a number of time intervals, and management’s objectives — they consider everything. Their ideas can help you develop a more resilient portfolio in the coming year.
As a result, we used the TipRanks platform to gather information on three stocks that Wall Street experts have designated as Top Picks for 2022. Are these the best stocks for your New Year’s portfolio? Let’s look at it more closely.
Estates of Vintage Wines (VWE)
We’ll start with Vintage Wine Estates, which is in the wine business. This corporation owns a variety of products, primarily wines but also spirits, as well as vineyards and wineries on the West Coast of the United States. Wineries in Washington State and Oregon, as well as Napa and Sonoma, California’s top wine regions, are among the company’s assets.
Vintage has been in business for almost 20 years and is involved in every area of the wine industry, from grape farming and harvesting to bottling and marketing. Vintage has risen to become one of the top 15 wineries in the United States, with annual sales exceeding 2 million nine-liter equivalent cases.
Vintage went public this year through a SPAC deal, capitalising on its excellent market position. On May 28, the SPAC-Bespoke Capital Acquisition Corporation merger was approved, and on June 8, the new VWE ticker began trading on the NASDAQ. Vintage has a market worth of $665 million and got a total of $306 million in new capital from the SPAC transaction.
On September 30, Vintage completed the first quarter of its fiscal year 2022, and the results showed advances in a number of key indicators. Net earnings per share were 5 cents, up from the prior two quarters’ negative results. Year over year, gross margins increased by 24 basis points to 42 percent. ACE Cider, a fast-growing cider brand that produces 90,000 barrels per year, was also bought by the corporation.
The storey goes on.
The company highlighted a robust expansion of direct-to-consumer sales as one of the quarter’s highlights. This segment’s revenue increased by $4 million, or 36%, to $14.9 million for the quarter. This is the result of the company’s ongoing efforts to boost e-commerce across its brand portfolio.
Analyst Luke Hannan describes this stock as a Top Pick in his coverage for Canaccord. “Vintage’s first two quarters as a publicly traded business displayed significant growth for its Direct-to-Consumer (DTC) sector, as well as the company’s ability to deliver on the M&A front with two acquisitions,” he writes. We believe VWE is a strong opportunity for investors because of its large exposure to the higher-growth premium wine market, secular tailwinds for private label brand building, and a favourable acquisition environment.”
In accordance with these upbeat remarks, Hannan rates VWE shares as a Buy, with a $16.50 price objective implying a 50% year-over-year gain. (Click here to see Hannan’s track record.)
Hannan’s is one of three positive ratings on this stock, which add up to a Strong Buy consensus rating. The stock is currently trading at $11.01, with a $14.50 average target price implying a 32 percent gain in the next 12 months. (For more information, see TipRanks’ VWE stock analysis.)
Kornit Digital (KRNT)
This is Kornit, a company that makes both tech and things that are made. We’ll look at this stock next. Kornit makes printers for the textile industry. These are high-end inkjet printers that can print complex designs on finished textiles. The company also makes inks, pigments, and other chemical products that are used in the printing process.
People make a lot of money from textiles and clothes, and Kornit has a big part of that business. The company has five offices around the world and 800 employees. It also prints more than 150 million garments a year on Kornit systems.
Kornit made more money and had more revenue in the third quarter of this year than in the third quarter of last year. On revenue, the top line hit $86.7 million, which is up 51% from last year. The EPS was up from 18 cents to 24 cents.
This is a big deal for Needham’s 5-star analyst, James Ricchiuti. He thinks that the company is growing quickly, which is important. This is what he says: “We have chosen Kornit Digital as our favourite for 2022.” KRNT is going into 2022 with a lot of momentum on most, if not all, of its fronts. Last 6 years, KRNT has grown more than 20% each year, and it’s on track to grow more than 66% in 2021. If you look at KRNT’s stock performance, it’s been better for five of the last six years and by a lot over the last four years. We think that trend can continue in 2022.”
Ricciuti’s comments support his Buy rating on the stock, and his $202 price target shows that the stock could rise about 31% in the next year. If you want to see Ricchiuti’s record, click this link.
Again, we’re looking at a stock that everyone thinks is a “Strong Buy.” Kornit has 5 reviews from stock experts on the Street, and all of them are good. The average price target is $194.60, which means there could be a 26% rise in the share price over the next year from the current price of $154.38. You can see a TipRanks analysis of KRNT stock here.
Farfetch, Ltd. (FTCH)
Farfetch is the last company on the Top Picks list. It is an e-commerce company that sells high-end goods. Customers and sellers from more than 190 countries can use Farfetch to buy and sell things online. From fashion and shoes to accessories and jewellery, there are more than 1,400 high-end brands on Farfectch, which you can buy from. There are offices in London and around the world for the company. It is based in Portugal and has its headquarters there.
Farfetch has a lot of visitors to its website, which is a good thing for an online store. Company: More than 13 million unique visitors come to the site each month, and more than 3 million of them are customers who use the service.
This company’s stock rose last year, when people were sick and people were unable to go out and buy things. As the economy got back to normal this year, shares fell. Farfetch also came under fire in November, when its mixed Q3 results fell short on some key metrics.
EPS was strong. As expected, there was a 14-cent loss. This was better than the 24-cent loss expected, and it was also better than the 17-cent losses that happened in Q2 and 3Q20. It made $582 million. This was up 33% year-over-year, but a little below the forecast. Finally, the company has a bad cash flow. If you look at the first nine months of 2021, Farfetch lost $409 million in cash from operations, which is a lot more than the $84 million it lost last year. After the quarterly report, shares fell 22%.
Everything isn’t bad. Ike Boruchow, a Wells Fargo analyst, thinks this is a good place to be. After a meeting with company executives, he called FTCH a “Top Pick.” When Boruchow talks about his company, he talks about how its market share in the online luxury goods market is growing. He also talks about how big that market has become over the last few years.
Boruchow says this: “One of the most interesting parts of the FTCH storey, in our opinion, is the rapid adoption of online growth through the COVID pandemic, which will push online luxury spending to 23% of sales in 2020 from just 12% in 2019.” As barriers to online luxury spending seem to have been removed through COVID, we think that online luxury penetration can keep growing at a rate in the mid- to high-teens over the next few years. With the luxury ecommerce market at $57 billion now, we think it will reach $140 billion in the next few years as more people use it. If more people buy luxury goods online and the total addressable market (TAM) grows quickly, we think FTCH will be a good fit for them.
Boruchow says that FTCH is a Buy, and his $55 price target implies a 67 percent rise in the stock over the next 12 months. Here is a link to watch Boruchow’s track record.
All in all, this stock has a “Strong Buy” consensus rating, which is based on 10 positive reviews that outweigh the three “Hold” reviews. The current trading price is $32.92, and the average price target is $50.88. This means that the stock could rise about 55% in the next year. See the FTCH stock analysis on TipRanks to learn more about the company