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Top Wall Street analysts favor these 3 stocks for the long term
COSTCostco(COST) CNBC·2025-03-16 11:14

Core Viewpoint - Investors navigated a volatile trading week influenced by tariff rhetoric from the Trump administration, leading to weekly stock losses despite a rally on Friday [1] Group 1: Zscaler - Zscaler, a cloud-based cybersecurity company, is recognized for its Zero Trust Exchange platform, which protects users and applications from cyber threats [3] - The company reported strong second-quarter results for fiscal 2025, driven by the adoption of Zero Trust and artificial intelligence [3][4] - Analyst Shaul Eyal from TD Cowen reiterated a buy rating with a price target of 270,citingarevampedgo−to−marketstrategyandimprovedsalesproductivity[4]−Zscaler′sannualcontractvaluefromitsAIAnalyticsportfolionearlydoubledyearoveryear,withexpectationstoreach270, citing a revamped go-to-market strategy and improved sales productivity [4] - Zscaler's annual contract value from its AI Analytics portfolio nearly doubled year over year, with expectations to reach 3 billion in annual recurring revenue by the end of fiscal 2025 [5] - The company serves 14 of the 15 U.S. cabinet agencies and is expected to benefit from government efficiency initiatives [6] - The number of customers generating over 1millioninannualrecurringrevenueincreasedby251 million in annual recurring revenue increased by 25% year over year to 620 [6] Group 2: Costco Wholesale - Costco Wholesale reported mixed results for the second quarter of fiscal 2025, with revenue exceeding expectations but earnings missing estimates [8] - Analyst Corey Tarlowe from Jefferies noted that the earnings miss was due to lower-than-expected gross margin expansion and forex headwinds, but highlighted strong comparable sales growth of 8.3% [9][10] - Costco's U.S. sales benefited from increased traffic and ticket growth, and the company has opportunities for further warehouse expansion [11] - The company confirmed that about one-third of its U.S. sales are imported, with less than half sourced from China, Mexico, and Canada, which may insulate it from tariff impacts [11][12] - Tarlowe raised the price target for Costco stock to 1,180 from 1,145whilemaintainingabuyrating[12]Group3:KarmanHoldings−KarmanHoldings,adefenseandspacesystemsmanufacturer,recentlywentpublicandoffersadiverserangeofproducts[14]−AnalystAmitDaryananifromEvercoreinitiatedcoveragewithabuyratingandapricetargetof1,145 while maintaining a buy rating [12] Group 3: Karman Holdings - Karman Holdings, a defense and space systems manufacturer, recently went public and offers a diverse range of products [14] - Analyst Amit Daryanani from Evercore initiated coverage with a buy rating and a price target of 38, citing strong growth potential driven by various secular tailwinds [15] - Daryanani highlighted growth in U.S. orbital launch volume and increased focus on missile defense as key drivers for Karman's growth [16] - Fiscal 2025 sales are expected to grow 18% year over year to $409 million, with EPS projected at 36 cents and an EBITDA margin expansion to 31% [16]