Investors
seeking
stocks
with
growth
potential
have
plenty
of
options,
according
to
analysts.
Several
Wall
Street
firms
said
this
week
there’s
a
number
of
companies
that
are
starting
to
gather
momentum
and
investors
should
buy
the
shares
now.
CNBC
Pro
combed
through
top
research
to
find
stocks
best
positioned
for
multiyear
growth.
They
include
Sprout
Social,
Westrock
Coffee
,
Bloom
Energy,
Macy’s
and
Entegris.
Entegris
BMO
Capital
Markets
initiated
coverage
of
Entegris,
a
materials
and
solutions
provider
for
the
semiconductor
industry,
earlier
this
week.
Analyst
Bhavesh
Lodaya
slapped
an
outperform
rating
on
the
stock,
saying
the
firm
sees
a
“multi-year
runway
of
outperformance
for
this
unique
player.”
“The
semis
industry
[is]
on
the
cusp
of
its
next
cyclical
upturn
which
combined
with
ENTG’s
own
organic
growth
drivers
provides
its
investors
with
an
attractive
avenue
to
get
exposure
to
the
theme,”
the
analyst
said.
In
addition,
shares
are
up
57%
this
year.
However,
Lodaya
said
there
is
plenty
more
room
to
run
for
Entegris
shares.
The
company’s
business
model
is
robust,
he
noted.
While
2023
has
been
a
challenge,
Lodaya
said
investors
will
be
rewarded
in
the
second
half.
“A
multi-year
growth
story
&
we’re
just
getting
started,”
the
analyst
said.
Sprout
Social
“We’d
stay
the
course,”
Canaccord
Genuity
analyst
David
Hynes
Jr.
said
in
a
recent
note
to
investors
of
the
social
media
management
software
company.
The
analyst
recently
came
away
from
meetings
with
Sprout
management
feeling
more
certain
on
the
stock
and
the
team
leading
the
charge.
“In
times
of
turmoil,
or
in
this
case
business
evolution,
you
need
steady
hands
at
the
helm,
and
if
things
go
as
planned,
this
is
a
characteristic
for
which
we
think
Sprout
will
eventually
be
rewarded,”
he
said.
The
firm
acknowledged
questions
remain
including
competition,
pricing
and
perhaps
most
importantly
the
impact
of
artificial
intelligence.
Still,
Hynes
said
something
special
is
brewing
and
that
margin
expansion
is
“more
likely
than
not.”
“If
that’s
the
case,
we
see
the
firm’s
current
valuation
as
at
least
sustainable,
if
not
with
bias
to
the
upside
as
conviction
builds
in
the
multiyear
growth
story,”
he
wrote.
Shares
are
down
21%
in
2023.
Westrock
Coffee
Shares
of
the
Little
Rock,
Arkansas-based
coffee
company
are
severely
“undervalued,”
according
to
Stifel
analyst
Matthew
Smith.
The
stock
is
down
16%
this
year,
but
Smith
said
he
sees
a
major
buying
opportunity
despite
the
recent
volatility.
Like
many
other
companies,
Westrock
has
been
dealing
with
supply
chain
challenges
and
the
long-awaited
arrival
of
a
new
production
facility
to
come
online.
“This
facility
should
unlock
a
significant
amount
of
growth
in
the
fast
growing
subcategories
of
extracts
and
single-cup
coffee,”
Smith
said.
The
analyst
said
that
the
manufacturing
facility
may
create
an
inflection
point
for
the
stock.
At
that
point,
international
growth
can
begin
with
Westrock
gaining
share.
Still,
investors
will
need
to
be
patient
until
that
happens
as
growth
is
likely
to
be
limited
for
the
foreseeable
future,
he
wrote.
“We
see
a
multi-year
growth
opportunity
for
Westrock
driven
by
market
share
gains
across
the
category
and
particularly
in
higher
margin
areas
of
the
category,”
Smith
said.
Macy’s
—
JPMorgan,
overweight
rating
“We
see
Macy’s
at
a
model
inflection
point
to
accelerated
multi-year
growth
supported
by
a
number
of
growth
vectors
&
a
sustained
low-double-digit
EBITDA
margin,
after
executing
against
the
pillars
of
the
2020
Polaris
Strategy
including
operational
discipline,
merchandising
changes
leveraging
technology
investments
and
field
leadership,
brick/mortar
store
base
right-sized,
and
balance
sheet
clean
at
~2x
adjusted
debt
to
EBITDAR
leverage.”
Entegris
—
BMO
Capital
Markets,
outperform
rating
“A
Multi-Year
Growth
Story
&
We’re
Just
Getting
Started.
…
While
the
stock
has
had
a
strong
run
off
its
bottom,
we
see
a
multi-year
runway
of
outperformance
for
this
unique
player.
…
The
semis
industry
[is]
on
the
cusp
of
its
next
cyclical
upturn
which
combined
with
ENTG’s
own
organic
growth
drivers
provides
its
investors
with
an
attractive
avenue
to
get
exposure
to
the
theme.”
Bloom
Energy
—
Morgan
Stanley,
overweight
rating
“Bloom
hosted
an
investor
conference
where
it
reiterated
its
near
term
and
long-term
financial
plan
and
highlighted
the
unique
characteristics
of
its
product
offering.
We
are
reiterating
our
OW-rating
and
$30
price
target,
offering
102%
upside.
In
our
view,
the
strong
multi-year
growth
tailwinds
within
BE’s
fuel
cell
and
electrolyzer
business,
achievable
near-term
margin
improvement,
&
strong
balance
sheet
position
is
not
properly
reflected
in
its
current
valuation,
with
the
stock
trading
at
a
~40%
discount
to
hydrogen
peers
on
2025
revenue
and
~30%
discount
to
a
broader
set
of
clean
tech
peers
on
2025
EBITDA.”
Westrock
Coffee
—
Stifel,
buy
rating
“The
shares
screen
as
undervalued.
…
We
see
a
multi-year
growth
opportunity
for
Westrock
driven
by
market
share
gains
across
the
category
and
particularly
in
higher
margin
areas
of
the
category.
…
In
the
short-term,
the
company’s
growth
will
be
limited
by
its
capacity
until
the
new
Conway,
AR
facility
is
up
and
ready
in
2024.
This
facility
should
unlock
a
significant
amount
of
growth
in
the
fast
growing
subcategories
of
extracts
and
single-cup
coffee.”
Sprout
Social
—
Canaccord,
buy
rating
“We’d
stay
the
course.
…
In
times
of
turmoil,
or
in
this
case
business
evolution,
you
need
steady
hands
at
the
helm,
and
if
things
go
as
planned,
this
is
a
characteristic
for
which
we
think
Sprout
will
eventually
be
rewarded.
…
Our
view
is
that
the
odds
that
Sprout
delivers
on
its
multi-year
path
of
30%+
growth
and
100-300
bps
of
margin
expansion
are
more
likely
than
not.
If
that’s
the
case,
we
see
the
firm’s
current
valuation
as
at
least
sustainable,
if
not
with
bias
to
the
upside
as
conviction
builds
in
the
multiyear
growth
story.”
