A series of headwinds have investors worried – from war drums on the Russia-Ukraine border to rising inflation to the prospect of at least three Fed rate hikes coming sooner rather than later. All of this is playing into the market's recent volatility.

Looking at the market gyrations from Morgan Stanley, chief investment officer Lisa Shalett believes that the worries are overblown. Putting most of it down to the Fed’s upcoming policy change, she says, “It’s been an unbelievable run. This is a standard, garden-variety correction, and it’s absolutely appropriate when there is a change in policy.”

In these uncertain and volatile times, one approach to finding compelling investment opportunities is to follow Wall Street’s analysts, as they build their reputations by the quality of their stock reviews. And lately, even though markets are volatile, the analysts are still finding stocks that are poised to weather the storm.

We’ve used TipRanks' database to pinpoint two such stocks. These are Strong Buy choices with recent positive analyst reviews and considerable upside potential. Let’s dive into the details to find out why Wall Street is herding these bulls away from the bears.

Grab Holdings (GRAB)

First up is Grab Holdings, an Asian ‘superapp’ company. This Singapore-based firm offers its users access to a range of ‘daily living’ services through the app – from deliveries and mobility to financial services and hotels, Grab’s customers can find what they want, when they want, in one convenient online location. The company services a user base in Southeast Asia, including Singapore, Malaysia, Indonesia, the Philippines, and Thailand, among others.

In recent weeks, Grab has made headlines – in a positive way. The company went public on the US markets through a SPAC transaction with Altimeter Growth Corporation at the beginning of December. The SPAC deal, with saw the GRAB ticker start trading on December 1, brought the company $4.5 billion in gross proceeds – making it the largest public debut, with the largest capital raise, for a Southeast Asian company on the US markets. The PIPE in the transaction, at $4 billion, made this one of the largest-ever SPAC transactions.

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There are firm grounds for the size of this business combination. Grab recorded $11.5 billion in gross merchandise value for the first 9 months of 2021, with three record quarters in a row. In the first half of the year, the company’s app completed 1 billion transactions – and more importantly, it is installed on 40% of all active smartphones in Southeast Asia, the world’s most populous region.

Morgan Stanley analyst Mark Goodridge is bullish on Grab, and explain why in clear terms, writing: “Mobility is profitable today at the EBITDA line for Grab, and we forecast Deliveries to reach profitability in 2023. We see these two business lines funding Grab's expansion into Fintech and Digital banking which, in our view, will be long-term growth drivers. This sustained and profitable cash flow is a very strong competitive advantage against other Super App players in the space…”

Looking at the valuation metric, Goodridge adds, "On our estimates Grab is trading on 2023 EV/ MS-adjusted Net Sales multiple adjusted for growth of 11.3x… We view this as attractive particularly with the long-term opportunity around Grab's Fintech business."

To this end, Goodridge puts an Overweight (i.e. Buy) rating on GRAB shares, along with an $8.40 price target that indicates potential for 51% upside in the next 12 months. (To watch Goodridge’s track record, click here)

While Goodridge is bullish on the stock, Wall Street’s consensus is somewhat more so. The 6 recent reviews are all positive, for a unanimous Strong Buy consensus, while the $10.23 average price target implies a one-year upside of ~84%. (See Grab stock forecast on TipRanks)

Twilio (TWLO)

The next stock on our list, Twilio, was uniquely well-positioned to benefit from the pandemic crisis. The company is a software provider in the cloud-based communications niche, offering a platform that embeds a range of communication channels – from phones, to VoIP, to messaging, to video – on web browsers, desktop computers, and mobile devices. The service is designed to put all of the users communications needs in one place, for ease of use, ease of security, and streamlined efficiency.

Obviously, this sort of service found plenty of takers during the COVID crisis, and Twilio’s activity reflect that. By the use numbers, Twilio’s platform has processed over 3 trillion emails, supported over 1 trillion interactions annually, hosted more than 3.4 billion phone numbers, and sent or received more than 592 million text messages. The company has reported top-line sequential increases for the past 8 quarters.

Even as activity and revenue are rising, however, the stock price is down. TWLO shares have tumbled 48% in the last year. The key factor may be management’s outlook. Twilio beat expectations in its Q3 earnings report (the last one released), but management guided toward 40% growth in Q4, lower than predicted, and set expectations for a Q4 GAAP earnings loss of 23 cents to 26 cents per share. This is serious, as the Street had been looking for a lower 8-cent loss. The stock has been falling since that earnings release – and we won’t see the actual Q4 numbers until February 9.

However – there is plenty of room for this company to keep running. Analyst Matt VanVliet, of BTIG, likes what he sees in Twilio, and initiates his coverage with a Buy rating and a $260 price target that suggests room for ~32% upside by year’s end. (To watch VanVliet’s track record, click here)

Backing his stance, VanVliet points to the still-large market for Twilio’s services: “Twilio is the clear market leader in the nearly $80bn CPaaS [communications platform as a service] market that is growing in excess of 20% annually. We expect Twilio to continue to gain market share with the broadest and best product offering, elevated investment in R&D and M&A to maintain that competitive positioning, and accelerating end-market demand for omnichannel communications capabilities that can be embedded in every step of the customer journey.”

High-tech gets plenty of headlines, and Twilio is no exception; this company has received an impressive 23 analyst reviews recently. More impressive, 22 of those are to Buy, against just one Hold. The stock is priced at $197.50 with an average target of $371.40, indicating potential for an 88% upside this year. (See TWLO stock forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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