3 New Strong Buy Ratings from Top-Rated Analysts: 01/14/2025
Tempur Sealy International (NYSE: TPX) takes competition “to the mattresses.” Netflix Inc. (NASDAQ: NFLX) shows strong potential despite multiple challenging catalysts.
Meanwhile, Penguin Solutions Inc. (NASDAQ: PENG) continues to benefit from the AI revolution. Here’s what Wall Street’s brightest and best are following right now.
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1- Tempur Sealy International (NYSE: TPX)
Make way for mattress royalty — this company has over 200 years of experience under its belt. Not only does the company sell its wares through 650 company-owned stores, but maintains a robust network of third-party retailers and an e-commerce site. News of a potential acquisition and a recent history of outperformance compared to peers have put it on analysts’ radars as a top pick for 2025.
Zen Rating: B (Buy) — see full analysis >
Recent Price: $55.14 — get current quote >
Max 1-year forecast: $63.00
Why we’re watching:
- Strong Buy consensus: While only 3 analysts we track are currently issuing ratings on TPX, the stock enjoys a Strong Buy consensus and a max 1-year forecast of $63.00, which, if achieved, would represent 14% upside. See the ratings
- A highlight? Keith Hughes of Truist Securities (a top 2% analyst), who maintains a Strong Buy rating on TPX, just raised their price target from 8.6% from $58 to $63.
- The trial concerning the company's attempted acquisition of Mattress Firm ended last month, so a decision on the matter might be announced at any moment, Hughes told investors.
- The analyst pointed out that Tempur Sealy International's stocks have outperformed its peers since last month, suggesting that investors finally believe the company will prevail in this nearly two-year legal battle.
- Hughes believes other synergies might result in double-digit EPS growth as a result of the purchase.
- If TPX’s 200-year track record didn’t appeal to you, perhaps its fundamentals will. TPX earns a Zen Rating of B (Buy), meaning that after a thorough analysis of 115 factors proven to drive growth in stock, this stands out as an above-average pick among the thousands of stocks we track.
- TPX’s areas of strength as reflected in our Component Grades include Safety and Financials, indicating that this is a strong pick for investors who prefer to avoid volatility. Also of note is the fact that it earns a B grade from our proprietary AI factors, detect subtle patterns in market data; it anticipates future trends that point to superior stock price results. (See all 7 Zen Component Grades here >)
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2- Netflix Inc. (NASDAQ: NFLX)
Netflix is facing a double whammy: Shares of technology companies have been trading lower amid the White House's decision to restrict AI chip exports, and entertainment stocks are down due to concerns about production following wildfires in LA. However, according to top-rated analysts and our Zen Ratings system, there are plenty of reasons why entertainment giant Netflix could not only survive but thrive in 2025.
Zen Rating: B (Buy) — see full analysis >
Recent Price: $837.69 — get current quote >
Max 1-year forecast: $1,100.00
Why we’re watching:
- Analyst support: Among the 27 analysts we track issuing ratings on NFLX, the stock enjoys a Buy consensus, with a max 1-year forecast of $1100, which, if achieved, would represent over 30% upside. See the ratings
- This is despite negative catalysts. For example, Doug Anmuth of JP Morgan (a top 1% analyst) just lowered their price target on NFLX slightly, from $1,010 to $1,000. However, they maintain a Strong Buy rating.
- Setting the table for the 1/21 release of Netflix's Q4 and FY 2024 earnings report, Anmuth said they expect the company to deliver results indicating "bullish fundamentals." The analyst said they cut their FY 2025 estimates, citing Forex.
- Anmuth noted that concerns about currency headwinds and 2025 revenue growth have contributed to a 7% decline in the price of Netflix stock since 2024/12 highs, in spite of a 27% climb post Q3's earnings report. "The currency noise should be understood, however," the analyst noted.
- NFLX earns a Zen Rating of B (Buy), a rating only achieved by the top 20% of stocks we track. It enjoys solid Component Grades across the board, with particularly strong scores for Momentum, Financials, and AI factors. (See all 7 Zen Component Grades here >)
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3- Penguin Solutions Inc. (NASDAQ: PENG)
With a strong position in the growing AI infrastructure market, strategic partnerships and noteworthy revenue growth, analysts are bullish on Penguin Solutions’ prospects for the coming year, even with a potentially “lumpy” market on the horizon.
Zen Rating: B (Buy) — see full analysis >
Recent Price: $20.65 — get current quote >
Max 1-year forecast:
Why we’re watching:
- Right now, 7 analysts we track are issuing ratings on PENG. With 5 Strong Buy and 2 Buy ratings, there’s no ambiguity about how the pros view this tech company’s potential. See the ratings
- Notably, Tom O'Malley of Barclays (a top 18% analyst) raised their price target on PENG 4.5% from $22 to $23 following the company’s earnings report on 1/8, while maintaining a Strong Buy rating.
- O'Malley contextualized their price target hike by saying that "the resurgence of Penguin Solutions' major hyperscale customer, which is like Meta Planforms, for a third generation system should assuage fears about the company's path to continued growth for advanced computing."
- However, the analyst cautioned that near-term strength notwithstanding, management's reiterated guidance suggests a "lumpier" 2H 2025.
- Even so, O'Malley assured readers that "Penguin Solutions' qualitative indicators are all tracking significantly more positive, providing a stronger setup for a stock."
- But don’t just trust analysts. Our Zen Ratings system supports the thesis that PENG is watchlist-worthy, as it earns an overall B (Buy) rating. Stocks with a B rating have historically generated 19.88% annual returns.
- Highlights among the Component Grades that shape the overall score include above-average grades for Value and Growth, suggesting this stock may offer a unique opportunity to buy at an excellent price and potentially enjoy the benefits of its strong growth prospects. (See all 7 Zen Component Grades here >)
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