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The Zacks Analyst Blog Highlights Meta Platforms, NVIDIA, Amazon.com, Booking Holdings and Chipotle Mexican Grill

For Immediate Release

Chicago, IL – May 12, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Meta Platforms Inc. META, NVIDIA Corp. NVDA, Amazon.com Inc. AMZN, Booking Holdings Inc. BKNG and Chipotle Mexican Grill Inc. CMG.

Here are highlights from Thursday’s Analyst Blog:

5 High-Flying Majors to Buy for Long-Term Gains

Wall Street has remained range-bound since April barring 2-3 days of rally or decline. Market participants are clueless about the health of the U.S. economy. Although several economic indicators have fallen substantially in 2023, the labor market stays resilient. Moreover, inflation is well above the Fed's 2% target rate despite a massive 5% hike in interest rate from March 2022 to May 2023.

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A large section of economists and financial experts have warned about a recession later this year. However, first-quarter 2023 earnings of corporate America are better-than-expected so far. In its May FOMC meeting, the Fed refrained from giving any clearcut signal regarding the end of the current rate hike regime.

Investment Strategy

Investors remain directionless about the future trajectory of the U.S. stock movement. In such a situation, a good investment strategy can provide strong returns in the long term.

First, select U.S. corporate behemoth (market capital > $50 billion) with a favorable Zacks Rank. These companies have an excellent business model, globally acclaimed brand value and a sound financial position. Second, select those corporate bigwigs that have flourished year to date with robust potential for the rest of 2023 and the long term (next 3 to 5 years).

Our Top Picks

Based on the above-mentioned methodology, we have narrowed our search to five U.S. corporate giants. These stocks have long-term earnings growth potential higher than the expected earnings growth of 10.7% for the broad-market S&P 500 Index. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy).  You can see the complete list of today's Zacks #1 Rank stocks here.

Meta Platforms Inc. is benefiting from steady user growth across all regions, particularly Asia Pacific. Increased engagement for its products like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. META is considered to have pioneered the concept of social networking.

However, as developed regions mature, Meta Platforms has taken measures to drive penetration in the emerging markets of South East Asia, Latin America and Africa. Of all places, India deserves a-special mention in terms of user growth. The world's second-largest populated country offers tremendous potential for META. With China off the radar, India can prove to be a terrific growth engine for Meta.

Zacks Rank #1 Meta Platform has an expected revenue and earnings growth rate of 8.6% and 19.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.6% over the last 30 days. Meta Platform has a long-term earnings growth potential of 19.5%. The stock price of META has jumped 93.7% year to date.

NVIDIA Corp. is gaining from the strong growth of artificial intelligence, high-performance computing and accelerated computing, which is boosting its Compute & Networking revenues. A surge in Hyperscale demand and a solid uptake of artificial intelligence-based smart cockpit infotainment solutions are acting as tailwinds for NVDA.

A collaboration with Mercedes-Benz and Audi is likely to enhance NVDA's presence in autonomous vehicles and other automotive electronics space. We expect its Automotive segment's revenues to witness a CAGR of 29% through fiscal 2023-2025.

Zacks Rank #2 NVIDIA has an expected revenue and earnings growth rate of 10% and 34.7%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 30 days. NVIDIA has a long-term earnings growth potential of 17.5%. The stock price of NVDA has soared 97.6% year to date.

Amazon.com Inc. is gaining on solid Prime momentum owing to ultrafast delivery services and a strong content portfolio. The strengthening relationship with third-party sellers is a positive. Additionally, the strong adoption rate of AWS is aiding AMZN's cloud dominance. An expanding AWS services portfolio is continuously helping Amazon in gaining momentum among customers.

Robust Alexa skills and an expanding smart home products portfolio are positives. AMZN's strong global presence and solid momentum across small and medium businesses remain tailwinds. Considering the abovementioned facts, we expect 2023 revenues to be up 5% from 2022.

Zacks Rank #2 Amazon has an expected revenue and earnings growth rate of 8.9% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the last 30 days. Amazon has a long-term earnings growth potential of 18.4%. The stock price of AMZN has advanced 31.2% year to date.

Booking Holdings Inc. is benefiting from a substantial improvement in its booking trends. Solid growth in domestic bookings is contributing well. Further, BKNG is experiencing solid momentum in international regions, which is a positive. Strong growth in rental car, airline ticket units and booked room nights is another positive.

Also, solid momentum across the agency, merchant, and advertising and other businesses is a tailwind for BKNG. Our estimates suggest that agency, merchant, and advertising and other revenues would see a year-over-year rise of 2.3%, 18.7% and 8.2%, respectively, in 2023. Further, strengthening alternative accommodation business and flight capabilities are major positives. We expect 2023 total revenues to be up 9.5% from 2022.

Zacks Rank #1 Booking Holdings has an expected revenue and earnings growth rate of 19.9% and 36.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% over the last seven days. Booking Holdings has a long-term earnings growth potential of 16.5%. The stock price of BKNG has surged 31.3% year to date.

Chipotle Mexican Grill Inc. has been benefiting from its strong comparable restaurant sales growth, digital efforts, Chipotlane add-ons and menu innovation. Moreover, strength in digital sales, rise in menu prices, new restaurant openings and higher restaurant-level operating margin have been driving CMG's performance.

CMG reported solid benefits from Project Square One with improvements, including throughput on the frontline, on-time and accuracy on the digital make line. CMG also emphasizes smarter pickup times to boost growth.

Zacks Rank #1 Chipotle Mexican Grill has an expected revenue and earnings growth rate of 13.3% and 32.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5% over the last 30 days. Chipotle Mexican Grill has a long-term earnings growth potential of 31.8%. The stock price of CMG has climbed 48.1% year to date.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report

Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Booking Holdings Inc. (BKNG) : Free Stock Analysis Report

Meta Platforms, Inc. (META) : Free Stock Analysis Report

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