Analysts suggest ARKO could be a solid investment, but caution is advised
New York: When it comes to buying or selling stocks, many folks look to analysts for guidance. But do these recommendations really matter? Let’s dive into what Wall Street thinks about ARKO Corp. (ARKO).
Currently, ARKO has an average brokerage recommendation of 2.00, which leans towards a Buy. This score comes from four different brokerage firms, with two of them giving it a Strong Buy rating.
While the recommendation suggests buying, it’s wise not to rely solely on this info. Studies show that brokerage recommendations often don’t help investors pick stocks that will rise in value.
Why is that? Well, brokerage firms often have a vested interest in the stocks they cover, leading to overly positive ratings. Research indicates that for every “Strong Sell,” there are about five “Strong Buy” recommendations.
This means that the interests of these firms don’t always match up with what retail investors need. So, it’s better to use these recommendations to back up your own analysis or a reliable tool for predicting stock movements.
Speaking of tools, the Zacks Rank is a solid option. It’s been audited and shows a stock’s potential based on earnings estimate revisions. It ranks stocks from 1 (Strong Buy) to 5 (Strong Sell), which can help you make informed decisions.
Now, the Zacks Rank and the average brokerage recommendation are different. The ABR is based on analyst recommendations and can be a bit outdated, while the Zacks Rank updates quickly based on earnings estimates.
For ARKO, the Zacks Consensus Estimate for this year is steady at $0.20. This stability might mean the stock will perform similarly to the market soon.
Given the current Zacks Rank of #3 (Hold) for ARKO, it might be smart to be cautious despite the Buy recommendation from analysts.
In the meantime, if you’re looking for hot stocks, experts have just released a list of seven elite stocks they believe are primed for price increases. These picks have historically outperformed the market, so they’re worth checking out.
