US stock market is entering August against a turbulent backdrop, featuring continued Iran-driven volatility in oil prices and an ongoing earnings season.
Plus, investors are still processing the recent Fed meeting where new chairman Kevin Warsh held benchmark rates steady.
Despite this near-term noise, however, JPMorgan analysts kept their core focus list comprising 10 names unchanged. In particular, the investment firm is “positive” on the following three stocks for August.
Walmart Inc (WMT)
Walmart stock has lost nearly 20% since mid-May, a weakness that JPMorgan analysts view as a buying opportunity heading into the retailer’s quarterly print on August 20th.
Consensus is for the company to report $0.74 per share in earnings on nearly $187 billion in revenue – representing more than 5% and just under 9% year-over-year growth on the top and bottom lines.
JPM analysts currently hold an Overweight rating on WMT shares, with a $137 price target signaling potential upside of nearly 25% from current levels.
Their peers at Mizuho echoed a similar view in their latest note to clients – saying the firm’s AI-driven ultra-fast delivery network is “underappreciated and developing into a powerful competitive edge/demand consolidator.”
A 0.89% dividend yield on Walmart Inc makes it even more attractive as a long-term holding.
Eli Lilly (LLY)
Much like Walmart, Eli Lilly shares have also been in a downtrend in recent weeks, losing about 9% since early July.
But JPMorgan analysts believe the upcoming earnings on August 5th might mark the beginning of their recovery, with the pharma giant expected to record $6.71 a share of earnings on nearly $20.5 billion in revenue.
The investment firm maintains an Overweight rating on LLY stock – with a $1,400 price objective signaling potential upside of roughly 25% from current levels.
Peer Goldman Sachs also recommends loading up on Lilly on the recent pullback as its “next-gen” obesity treatments will continue to drive financial upside that will eventually translate into a higher share price.
Caterpillar Inc (CAT)
Caterpillar stock rounds out JPM’s top ideas list as a premier cyclical and industrial play.
Anchored by an Overweight rating, the heavy machinery leader continues to capture tailwinds from global infrastructure modernization, data center expansion, and power grid buildouts.
JPMorgan experts emphasize that CAT’s exceptionally solid balance sheet and pricing power allow the manufacturer to preserve operating margins even during broader macroeconomic uncertainty.
Supported by disciplined capital allocation and sustained free cash flow generation, Caterpillar Inc remains a high-conviction top idea, especially since it pays a small dividend yield of 0.79% as well
It offers balanced exposure to secular industrial growth, mega-project spending, and operational excellence as market participants await Q2 earnings.
Consensus is for CAT to post $6.25 per share of earnings on $19.3 billion in revenue – a 32% and just under 17% year-over-year growth.
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