Three Stocks to Watch for the Week of October 4th

The Treasury market was a major source of concern last week, as the 10-yr yield hit 1.56% early in the week, knocking the wind out of growth stocks with elevated valuations.  The major indexes all took a hit, but none felt the pain as severely as the Nasdaq, which shed 3.2% for the week.  

Negative factors from last week will likely carry through, at least for the beginning of this week.  Uncertainty on the debt ceiling and infrastructure bill plus ongoing supply chain disruptions continue to threaten market sentiment.  Volatility is likely to persist in the days to come.  Nevertheless, we have a few recommendations for you this week. 

This week we’re recommending three stocks to add to your watchlist, and one of them is expected to double over the next 12-months.  Continue reading to find out which stocks our team has their eyes on this week.    

---

---

Luxembourg-based Globant S.A. (GLOB) is a technology services company that provides content management systems and e-commerce applications to clients in North America, Europe, Latin America, and internationally.  The stock is the recipient of a string of upgrades and positive estimate revisions over the past few weeks that piqued our curiosity.  

Over the past month, JPMorgan Chase, Piper Sandler, Citigroup, and Jefferies have all raised their price targets and/or ratings for GLOB stock.  Last week, Goldman Sachs analyst Diego Aragao upgraded Globant from Neutral to Buy.  The analyst believes Globant can sustain current relative valuation levels given the “superior-quality of its offerings.”

The company is already taking advantage of the growing global demand for digital solutions.  Aragao is positive on the Latin American Technology sector, expecting the urgency of digitalization to continue driving improved sales growth and margin expansion for at least the next three years.  Goldman Sachs raised the price target for GLOB from $235 to $395, implying a 26% upside.

When we took a deeper look at insider activity at Globant, we were intrigued and impressed to find that insiders have $267 million invested in the $13 billion company.  This suggests that leadership will have shareholder’s interests in mind while making decisions.

The consensus forecasts that Globant will report EPS of $0.93 during its next quarterly earnings report, suggesting a positive year-over-year growth of 55% rate from the $0.60 reported in the same quarter last year.  The company is slated to report Q3 numbers on Thursday, November 11.  

Looking back at performance for the year, GLOB has consistently beat the market.  Shares of Globant have increased 54% since the beginning of the year.  In comparison, the S&P 500 has only moved about 20%. It’s no wonder that GLOB currently holds a Zacks Momentum Style Score of A.  We think that the stock has more room to run if conditions remain favorable.  

The consensus among the pros on Wall Street is to Buy GLOB stock.  Of 13 analysts offering recommendations for the stock, 12 rate the stock a Buy, and 1 rates it a Hold.  There are no Sell ratings for Globant stock.  

---

---

Programmatic advertising, which uses targeting tactics to segment audiences, is rapidly taking market share from traditional ad sales channels, which depend heavily on the “spray and pray” method of digital advertising.  Advertising software company Viant Technology’s (DSP) industry-leading Demand-Side Platform, Adelphic, allows marketers to buy ads across several channels easily.  Major agencies, brands, and large media buyers rely on Adelphic to execute programmatic advertising campaigns across connected TV (CTV), linear TV, desktop, mobile, digital out-of-home (DOOH), digital audio, and more.  With a customer satisfaction rating of 95%, Adelphic boasts the most supply integrations of any single platform across every channel.

DSP recently announced a collaboration with independent mobile platform, Kochava Collective.  The integration of Kochava Collective’s real-world location data within the Adelphic advertising software is intended to upgrade the user experience.  Jon Schulz, DSP’s CMO, said, “Our partnership with Kochava Collective will bolster insights for brands and agencies looking to better understand how their marketing efforts are driving foot traffic, and ultimately, brick-and-mortar sales.”

For its fiscal second quarter, ended June 30, 2021, DSP’s net revenue increased 65.7% year-over-year to $50.41 million. DSP’s revenue is expected to come in at $241.69 million in its fiscal year 2022, representing a 15.1% year-over-year rise. In addition, the company’s EPS is expected to increase 70.4% year-over-year in the next year.

The analyst community is optimistic about Viant’s potential.  A 12-month median price target of $25 represents a 100% increase from the last price.  Of 7 analysts offering recommendations for DSP, 5 rate the stock a Buy, and 2 rate it a Hold.  There are no Sell ratings for the stock. 

---

---

Recent data shows that consumers are spending more on their debit cards and less on credit cards, which is good for Mastercard Incorporated (MA) because they make more per transaction from debit card purchases than those made on credit cards.  They also make more on cross-border transactions that come mostly from international travel, which ground to a halt due to the pandemic.  But that’s not all the financial services giant has going for it.

The credit giant recently announced that it will be expanding into the BNPL space. Mastercard’s Mastercard Installments program will allow consumers to pay for online and in-store purchases through interest-free installments and will be available in the first quarter of next year, with plans to scale the program through 2022.  Users will be able to use the BNPL service at more than 70 million merchants through their lender’s mobile banking app or instant approval during checkout, according to Mastercard.  The product will be available in markets across the United States, the United Kingdom, and Australia.

Executive vice president of products and innovation at Mastercard, Chiro Aikat, told Yahoo Finance that it wanted to provide “greater choice” to consumers with its BNPL offering.  Aikat added that the company expects BNPL to gain market share of the payments space from 2.1% in 2020 to 4.2% in 2024.

The consensus among 37 analysts is to Buy MA stock.  There are 31 Buy ratings, 6 Hold ratings, and no Sell ratings for the stock.  A median 12-month price target of $450 represents a 27% increase from the current price.  

---

---