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15.06.2020, 06:40

Apple, Microsoft, Home Depot (HD) Are to Buy and Watch in 2020

The Dow Jones Industrial Average rallied sharply in May and continued to rise in early June as the stock market snaps back from huge losses. Top Dow Jones stocks to watch in June are Apple (AAPL), Intel (INTC), Microsoft (MSFT), Visa (V) and Walmart (WMT). There are clear winners through the first five months of 2020. The top three performing stocks year-to-date are Microsoft, Home Depot (HD) and Apple with gains of 16.2%, 13.8% and 8.3%, respectively.

Microsoft has a gain up 20% in 2020 to crush the tech sector’s 4% climb and it currently rests about 5% off its recent highs. The tech giant’s run, which has it approaching a $1.5 trillion market cap, has been driven by cloud computing expansion. MSFT is now a leader within the booming industry growth, with its quarterly Intelligent Cloud revenue up 27% for the second period in a row.

Microsoft’s cloud division pulled in the most of its three units in the Earnings Release FY20 Q3, but its Office-heavy Productivity and Business Processes divisions continue to grow as well. The firm’s Office 365 suite remains vital to businesses, governments, schools, and consumers, and its Teams business is tailor-made for the current stay-at-home environment as it fends off smaller rivals Slack work and Zoom ZM. Let’s not forget also its consumer electronics and video gaming businesses.

Microsoft is positioned to weather nearly any economic storm as it held over $137 billion in cash and equivalents at the end of last quarter. It has also bought back a ton of stock and it continues to raise its dividend payout with its current 1% yield well above the 10-year US Treasury note. Dow Jones stock leader Microsoft is back in buy range past a cup-with-handle's $180.10 buy point. Shares gained 0.8% Friday and are back above a cup-with-handle's $187.61 entry. Shares also broke out on April 16 above a $175.10 correct buy point in a double bottom. The closed price of MSFT stock is $187.740 with gain of +$1.47 (0.79%). The 30 analysts offering 12-month price forecasts for Microsoft Corp have a median target of $200.00, with a high estimate of $250.00 and a low estimate of $145.00. The median estimate represents a +6.48% increase from the last price of $187.83. MSFT estimates revenue to jump 12.5% this 2020 and another 10% 2021. The long-term increase is expected as the MSFT stock price prognosis for 2025 is $365.185. With a 5-year investment, the revenue is expected to be around +94.82%.

Home Depot has shined during the coronavirus lockdown period as shoppers continue to spend at the home improvement powerhouse deemed an essential business. HD’s first quarter revenue reported on May 19 jumped 7.1%, with comps up 6.4%. This growth came on top of the year-ago period’s nearly 6% top-line expansion. HD also showcased its growing e-commerce business, with digital platforms sales up by roughly 80%, driven by buy online and pick up in store. HD noted on its earnings call that “sales of both our DIY and Pro customers grew during the quarter with DIY sales growing faster than Pro sales.”

Home Depot’s costs did rise during the quarter as it boosted pay and benefits for workers, which could help it retain the best employees now and in the future. HD’s second quarter revenue is projected to climb by 5.8% with its FY20 sales projected to jump by 3.7% to $114.32 billion. The firm’s adjusted quarterly earnings are projected to pop 1.3% in the second quarter. Meanwhile, its full-year is expected to sink just 3.80% with FY21 projected to surge over 11% higher.

HD shares are up 11% in 2020 and nearly 60% in the last three years to crush the S&P 500’s 24% climb. Plus, its 2.48% dividend yield tops rival Lowe’s (NYSE:LOW) 1.73% and the S&P 500’s 1.90%. Home Depot appears to be a solid retail stock to own during the coronavirus uncertainty and beyond. The Home Depot (NYSE:HD) HD gain profit of +$2.98 (+1.24%) and close at $242.45. 34 Wall Street analysts have issued ratings and price targets for Home Depot in the last 12 months. Their average twelve-month price target is $252.59, suggesting that the stock has a possible upside of 4.18%. The high price target for HD is $280.00 and the low-price target for HD is $215.00. There are currently 1 sell rating, 10 hold ratings, 22 buy ratings and 1 strong buy rating for the stock, resulting in a consensus rating of "Buy."

Apple (NASDAQ:AAPL) is a financial powerhouse. With more than $90 billion in net cash on its fortress-like balance sheet and over $65 billion in annual operating profits the technology titan can withstand a stock market crash better than perhaps any other business. In fact, a lower stock price could work in investors' favor as Apple would be able to repurchase its shares at even more attractive prices and remaining shareholders would be entitled to an even greater share of its enormous profits. Those profits are set to increase fueled by projected growth in Apple's booming services and wearables businesses as well as a likely 5G-driven iPhone refresh cycle in the coming years.

Apple’s Q2 revenue topped our estimates and popped 0.50%, once again driven by its non-iPhone businesses. This includes its services and wearables division, which surged 17% and 23%, respectively. Meanwhile, AAPL’s adjusted earnings jumped 3.7%. Perhaps more importantly during these uncertain times, Apple closed the quarter with $83 billion in net cash. The tech titan also raised its dividend by 6%, with its yield resting at 0.98%, and it authorized a $50 billion increase to its stock buyback program. Apple’s fiscal 2020 revenue it projected to climb nearly 1%, with its adjusted earnings set to jump 3.5%. Peeking further ahead, Apple’s FY21 earnings consensus has climbed recently with its adjusted FY21 EPS figure projected to jump 24% above our FY20 estimate on 14.5% higher sales. AAPL shares are up 15% in 2020 and it recently hit new all-time highs. 

Apple is extended above a new buy point at $319.79. The new breakout gives investors the opportunity to add to an existing position. Shares gained 0.9% on Friday after falling from all-time highs on Thursday. Apple stock broke out on April 30 past a cup with handle's $288.35 buy point, and is according to monthly chart analysis out of the 5% buy range. Apple closed trading at $338.850 on Friday with gains of $2.9 (0.86%). The 37 analysts offering 12-month price forecasts for Apple Inc have a median target of 325.00, with a high estimate of $390.00 and a low estimate of $195.43. The median estimate represents a -4.00% decrease from the last price of $338.53. A long-term increase is expected, the "AAPL" stock price prognosis for is $557.850. With a 5-year investment, the revenue is expected to be around +64.63%. 


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