Wall Street research firm Piper Sandler on Monday reaffirmed a Buy rating on Marathon Oil (MRO) with a price target of $32.00. The oil and gas producer is on a bit of a hot streak, having notched a total of four consecutive Buy ratings in under a week 

WTI crude oil futures are trading firmly above the $80 per barrel level, a significant rise from under $70.00 per barrel in December. The Federal Reserve’s confirmation it expects to introduce three interest rate cuts this year is one of the catalysts supporing higher oil prices. Additionally, Ukrainian drone strikes on Russian oil refineries and production cuts by OPEC+ nations have tightened supply, further lifting oil prices. Although natural gas futures dipped this month, they’re still above the lows of February 19th 

Marathon Oil, whose performance is closely linked to crude oil prices, has seen an impressive 25% increase in stock price over the last two months, maintaining a six-week streak of gains. This uptrend is mirrored by other oil exploration and production (E&P) companies, including ConocoPhillips and EOG Resources 

Marathon Oil stands out for two reasons: it has not yet returned to pre-pandemic stock levels, and it demonstrated strong financial performance in the fourth quarter, even as oil prices declined. 

Diversified Production Levels Are Up 

In its recent fourth-quarter earnings report, Marathon Oil revealed a slight 2% decrease in revenue and a 22% drop in EPS year-over-year. Despite lower crude, gas, and NGL prices influencing these outcomes, the company’s performance exceeded analyst expectations, indicating effective cost management strategies. 

Moreover, Marathon Oil’s primary U.S. production saw a significant boost, with average daily output increasing by 27% year-on-year to 352,000 barrels. This uptick in production, coupled with rising oil prices, positions the company for potentially robust earnings in the current quarter.  

Marathon Oil distinguishes itself by not limiting operations to a single region. It boasts diversified assets across the Eagle Ford, Bakken, and Permian basins, alongside an integrated gas operation in Equatorial Guinea. This strategic diversification across various energy regions could mitigate risks amidst the fluctuating oil market. 

Shareholder Friendly 

Marathon Oil’s commitment to financial health and shareholder value is evident through its reducing debt and proactive shareholder return policies. The company’s quarterly dividend was lifted by 10% to $0.11 per share in October 2023, continuing a trend of annual increases since it was reinstated in October 2020 after a brief pause five months prior. 

Moreover, Marathon Oil resumed its stock repurchase program in 2021, with $352 million bought back in the fourth quarter alone, leaving approximately $0.5 billion from its $2.5 billion repurchase authorization. 

Finally, analysts project a 2024 EPS of $2.57, positioning the stock at a forward P/E ratio of 10.6 times. 

On March 13, the Puerto Rico Police Bureau extended its partnership with Axon Enterprise (AXON), a leader in public safety innovation, to supply its police officers with the Axon Body 4 body-worn cameras. The deal follows last year’s implementation of Axon’s Axon Body 3 cameras along with Axon Fleet 3 in-car cameras for first responders.   

The contract expansion can be seen as the latest example of growing global police force demand for modern technologies to keep first responders and citizens safe. 

Following numerous gun-related fatalities involving law enforcement and civilians, there’s increasing pressure on police departments to adopt technologies and training aimed at reducing these incidents. Many US-based federal, state, and local law enforcement entities have turned to Axon for its Taser stun guns, cameras, and other devices. In turn, the company has amassed more than 17,000 customers to become the market leader in public safety technologies.  

From 2020 to 2023, Axon experienced a 32% annualized growth in revenue, mostly driven by its subscription-based cloud software and services. These subscriptions represented 95% of the company’s total revenue in 2023. The recurring revenue profile significantly contributed to the stock’s appeal to investors. 

AXON Is On Pace To Finish Higher For The 9th Straight Year 

Axon stock is up around 25% in 2024 and should momentum sustain, the stock is poised to achieve higher finishes for the ninth consecutive year. Notably, 2022 was a challenging year for US equities, highlighted by a nearly 20% fall in the S&P 500 index. However, Axon stood out among the losers with a nearly 6% return. This gain was attributed to increased police investments amid rising community violence.  

Over the past five years, Axon’s shares have seen an annualized return of 43.0%, vastly outperforming the aerospace and defense industry’s 5.1% increase. This discrepancy highlights Axon’s exceptional growth, further evidenced by a 31% revenue increase to a record $1.56 billion in 2023, with expectations for continued growth.   

Early Mover In A $63 Billion Global Market 

Axon reported fourth quarter and full year fiscal 2023 results on February 13. The company disclosed a 29% year-over-year increase in its fourth-quarter revenue at $432 million. This growth was fuelled by a 47% rise in annual recurring revenues, thanks to enhanced sales of premium software bundles and connected devices. 

Additionally, Axon’s earnings per share surged by 32% to $1.12, surpassing consensus estimates for the twelfth consecutive quarter. With the forecast of sustained demand for its products, the company predicts a 20% to 24% revenue increase in 2024, aiming for up to $1.94 billion. By 2025, revenue is expected to hit $2 billion, a figure that could be conservative given Axon’s track record of exceeding expectations. 

Looking forward, Axon hopes to further capitalize recent moment within the $63 billion market that serves law enforcement, military, and civilian sectors. The company’s growth trajectory is poised for expansion with the introduction of new drones, virtual reality training devices, and the Axon Respond security platform, diversifying its product offerings.  

Despite its remarkable success, the consensus among Wall Street analysts remains positive, with nine out of ten endorsing a buy rating for the stock.

Throughout 2023, biotech stocks came under pressure in part due to high interest rates that are a major headwind for long-dated assets. However, as analysts continue to expect at least one interest rate cut in 2024 with more to follow next year, investors should take a fresh look at biotech valuations in search of growth opportunities. 

While investors can be seduced by the low price of many biotech stocks, a note of caution is required. The saying ‘it’s cheap for a reason’ is very relevant for biotech firms, many of which are in the pre-clinical phase defined by the absence of a commercially available product. 

One strategy to mitigate risk involves paying attention to stocks receiving analysts’ upgrades. Though far from a perfect science as even the Street’s top analysts get it wrong sometimes, there are several highly recommended biotech stocks worth looking at. 

An Innovative Approach to Drug Development 

Gingko Bioworks (NYSE:DNA), a biofoundry, collaborates with partners to expedite the drug development process using software, artificial intelligence (AI), and robotics. In theory, partners can provide Gingko with specifications for a specialized bioengineered microorganism, and Gingko would then produce the precise chemical or cellular products needed. 

The potential for drug discovery is large and represents a clear catalyst for Gingko Bioworks’ stock. Additionally, Gingko collaborates with firms in agriculture, food production, and industry. The company’s dedication to automation aims to achieve economies of scale, positioning Gingko as a preferred provider of its unique services that are difficult to duplicate. 

Before releasing its Q4 2023 earnings, analysts were largely bullish on DNA stock. Sentiment has declined following the earnings report as revenue fell short of expectations by approximately 15%. The guidance issued by Ginkgo, notably its upper range being 15% below analyst expectations, has raised particular concerns. 

Nevertheless, analysts maintain a $2.21 price target for DNA stock, implying an 82% upside. Among the group of analysts, two out of eight analysts rate the stock as a Strong Buy. 

Analysts Remain Optimistic Despite Regulation 

Clover Health (NASDAQ:CLOV), offering Medicare Advantage plans through its Clover Assistant software, was an early adopter of AI. The global pandemic showcased the real-world applicability of its software, making its public debut in June 2020 seemingly well-timed. 

Since its IPO, CLOV stock has sharply declined, largely due to rising interest rates. The company’s efforts to scale up occurred when borrowing costs were low, a situation that has since reversed, impacting its financial performance. 

Despite these challenges, Clover anticipates achieving positive EBITDA in 2024. Analysts, assuming a cautiously optimistic stance, have set a price target of $1.33 for the stock. This implies an upside potential of more than 60% from current levels. 

Earnings Could Send bluebird bio Soaring 

Bluebird bio (NASDAQ: BLUE), the final potential multibagger worth watching, specializes in the exciting field of gene therapy, focusing on treatments for severe genetic disorders 

As of March 8, 2024, BLUE stock has risen by 41% for the month and 7.6% for the year. The surge followed FDA approval of its treatments for sickle-cell disease and LYFGENIA, marking significant milestones likely to boost the company’s revenue. 

However, the costliness of gene therapy poses a risk. Affordability may hinge on government subsidies, especially as drug pricing faces heightened scrutiny from politicians and regulators during an election year. 

Despite these challenges, BLUE stock is followed by 13 analysts who collectively set a consensus price target of $5.46, suggesting a substantial 263% potential for share price growth, with five analysts recommending a Strong Buy or Buy. 

The S&P 500 is up approximately 8% so far this year and on pace to finish higher for a fifth consecutive month in March. Hopes for interest rate cuts are largely fueling the U.S. stock market’s drive to record highs. Despite Tuesday’s core CPI inflation data exceeding expectations, investors didn’t seem to care. Expectations for the Federal Reserve to soon cut benchmark rates to boost consumer and business activity remains high.  

A solid fourth quarter earnings season also significantly contributes to the S&P’s robust start in 2024. FactSet’s latest Earnings Insight update showed that 73% of S&P 500 companies have exceeded earnings expectations. The information technology sector has been the biggest source of outperformance while all 11 sectors have delivered more positive than negative EPS surprises. Such broad-based strength suggests that the current bull run has staying power. 

The current earnings period is coming to an end but there remains some noteworthy S&P 500 companies that have upcoming earnings releases.  

Here are a few of the stragglers that could announce consensus-topping profits of their own: 

Jabil (JBL)  

Jabil is scheduled to announce fiscal second quarter results before the market opens on March 15th. The global provider of electronics and diversified manufacturing services is off to a good start in fiscal 2024 after beating first quarter revenue and EPS estimates.  

However, management warned that Q2 would continue to see inventory corrections and anticipated a 10% decline in year-over-year revenue. With inventory headwinds expected to improve moving forward, the company’s second half outlook could be more important than beating EPS forecasts for a 16th straight quarter. 

Jabil’s involvement in the very hot AI cloud data center market positions it for growth over the longer-term. The shift of enterprises towards AI-powered data centers is expected to increase the demand for infrastructure manufacturing services. This transition is a catalyst for Jabil and offers a diversification of growth opportunities in areas such as vehicle electrification and connected healthcare, alongside its established businesses.  

Finally, Jabil’s stock still looks attractive despite a 17% increase in share price as it trades at just 14 times projected fiscal 2025 earnings. 

Carnival Corp. (CCL) 

Carnival will announce its fiscal first-quarter financials on March 25th. As the world’s largest cruise line by passenger volume, the company is on a hot streak, having beaten bottom-line expectations in each of the past four quarterly earnings reports.  

Although the stock has rebounded more than 160% from its October 2022 nadir, it has decreased by 13% in 2024. 

Aside from a healthy cruise demand environment, Carnival is benefitting from improved fleet efficiency. Over the last few years, it has added a dozen more fuel-efficient ships in place of older, less efficient ships. And with fuel prices well off their Fall 2023 peak, the combination of rising demand and moderating costs could make Wall Street’s $0.17 per share loss forecast look foolish.  

Last week, Stifel Nicholas raised its price target on Carnival stock to a Street-high $26.00 implying more than 60% upside from current levels. 

Lululemon Athletica (LULU) 

Lululemon Athletica (LULU) will put its 14-quarter streak of beating earnings expectations on the line when it reports fiscal fourth-quarter results on March 21st.  

Despite facing inventory challenges that are common across the apparel industry, Lululemon’s status as a premium brand serving affluent consumers has largely protected it from the need for significant price reductions. Consequently, the company’s earnings per share (EPS) saw a 32% increase in the first nine months of the current fiscal year.  

The fourth quarter typically benefits from the holiday shopping season so investors are hoping for Lululemon’s strong financial performance to blow past estimates. The company is expected to benefit from a record $222 billion in U.S. online sales in 2023, especially as Lululemon’s e-commerce sales surged by 18% in the third quarter, surpassing its general growth rate and potentially becoming a pivotal factor again.