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JPMorgan is betting on these 3 stocks; Sees over 50% upside potential
It’s time to look into the macro picture to get an idea of where the markets are headed in the months ahead. That’s what a global JPMorgan research team led by Joyce Chang did. The JPM team first sees US Treasuries sold off over the past week and is increasing yields as investors react to fears of inflation. The rise in bond yields stabilized on Friday, however, and Chang’s team doesn’t believe inflation is the big Bugaboo it’s known for. Her team sees a combination of economic growth and fiscal stimulus that creates a positive cycle of consumer spending that drives more growth. You write, “Our global economic team now predicts nominal US GDP averaging 7% this year and next as targeted measures to combat COVID-19 have been successful and economic activity will not be jeopardized. Global growth will exceed 5% … “According to JPM, this means that the coming year should be good for stocks. The company believes interest rates are likely to remain low, while inflation should ease as the economy normalizes. JPM’s equity analysts have been following the strategy team looking for the stocks they see as winners over the next 12 months. Three of their most recent picks are interesting, with strong buy ratings from the analyst community and upside potential of over 50%. We used the TipRanks database to get the details on it. Let’s take a look at it. On24 (ONTF) The first JPM selection featured here is On24, the online streaming service that gives third-party providers access to scaled and personalized network events. In other words, On24 makes its streaming service available to other companies in order to set up interactive functions such as webinars, virtual events and multimedia experiences. The San Francisco-based company has a base of more than 1900 corporate users. On24 customers work online with more than 4 million professionals each month for more than 42 million hours per year. As you can imagine, On24 saw an increase in customer interest and business over the past year as virtual offices and teleworking situations increased – and the company has now used that as a basis for going public. On24 held its IPO last month and joined the NYSE on February 3rd. The opening was a success; 8.56 million shares were launched at $ 77 each, well above the original price of $ 50. However, since then stocks have beaten, down 36%. Still, JPM’s Sterling Auty believes the company is well positioned to capitalize on current trends. “We believe the COVID-19 pandemic has forever changed the face of B2B marketing and sales. It has forced companies to shift most of their sales lead generation to the digital world, where On24 is usually considered to be the best webinar / webcast provider. “The 5 star analyst wrote. “Even after the pandemic, we expect the marketing movement to be a mix of digital and personal movement that is equally important. This should drive the further roll-out of On24-like solutions, and we anticipate On24 will take a significant portion of this opportunity. “Consistent with these bullish comments, Auty launched coverage of the stock with an overweight (ie buy) rating and its target price of $ 85 suggests there is 73% upside potential over the next 12 months. (To see Auty’s track record, click here.) Sometimes a company is so solid and successful that Wall Street analysts line up right behind it – and that’s the case here. Strong Buy’s analysts’ consensus rating is unanimous, based on 8 buy-side ratings released since the stock went public a little over a month ago. The shares are currently trading at $ 49.25, and their average price target of $ 74 implies a 50% move higher from that level. (See On24’s stock analysis at TipRanks.) Plug Power, Inc. (PLUG) And when we turn to the reusable energy space, let’s take a look at a JPM selection for “green power”. Plug Power develops and manufactures hydrogen power cells, a technology with great potential as a possible replacement for conventional batteries. Hydrogen power cells have potential applications in the automotive sector, as powerhouses for old fuel cars, but also in just about any application that stores energy – home heating, portable electronics, and emergency power systems, to name a few. Over the past year, PLUG shares have seen a huge increase of over 800%. The stock received an extra boost following Joe Biden’s win in the presidential election – and its platform promises to promote “green energy”. But the stock has pulled back a lot lately, as many exaggerated growth names have done. Poor 4Q20 results also explain the recent sell-off. Plug reported a deep loss of $ 1.12 per share, far worse than the expected loss of 8 cents or the 7 cents loss reported in the year-ago quarter. In fact, PLUG never reported a positive result. This company is supported by the quality of its technology and the potential of that technology for industry adoption towards renewable energy sources – but we are not there yet, despite advances in that direction. According to JPM analyst Paul Coster, the price decline makes PLUG an attractive offer. “Given the company’s many long-term growth opportunities, we believe the stock is currently attractively priced ahead of potential positive catalysts that include additional customer acquisition on pedestals, partnerships and joint ventures that allow the company to enter new regions and end-market applications quickly and with a modest capital investment, ”said the analyst. “Currently, PLUG is a story share that appeals to both thematic investors and generalists who are interested in the growth of renewable energies and, in particular, hydrogen.” Coster’s bullish comments include an upgrade in PLUG valuation – from neutral (i.e. hold) to overweight (buy) – and a target price of $ 65, indicating a possible uptrend of 55%. (To see Coster’s track record, click here.) Plug Power is also widely supported by Coster’s colleagues. 13 current analyst evaluations are divided into 11 buys and 1 hold and sell, all of which are combined into a strong buy consensus rating. PLUG shares sell for $ 39.3 and have an average price target of $ 62.85, suggesting upside potential of 60% for a year. (See PlugRanks’ stock analysis at TipRanks.) Orchard Therapeutics, PLC (ORTX) The final JPM stock pick we’ll look at is Orchard Therapeutics, a biopharma research company focused on developing gene therapies to treat rare diseases . The company’s goal is to develop curative treatments from the genetic modification of blood stem cells – treatments that can reverse the causative factors of the target disease with a single dose. The company’s pipeline includes two drug candidates that have been approved in the EU. The first, OTL-200, is a treatment for metachromatic leukodystrophy (MLD), a severe metabolic disorder that causes loss of sensory, motor, and cognitive functions. Strimvelis, the second approved drug, is a gamma retroviral vector-based gene therapy and the first such autologous ex vivo gene therapy to be approved by the European Medicines Agency. It is a treatment for adenosine deaminase deficiency (ADA-SCID) when the patient does not have a related stem cell donor available. In addition to these two EU-approved drugs, Orchard has ten other drug candidates in various stages of the pipeline process, from pre-clinical research to early-stage studies. Another 5-star analyst with JPM, Anupam Rama, took a deep dive into Orchard and was impressed with what he saw. In his coverage of the inventory, he notes several key points: “As data matures across indications in rare genetic diseases, the broader ex vivo autologous gene therapy platform continues to be jeopardized in terms of both efficacy and safety … key opportunities at MLD (including OTL-200 and other drug candidates each have potential sales in the range of $ 200 to $ 400 million. It is important that the general benefit / risk profile of the Orchard approach is viewed positively in the eyes of doctors At level, we believe that ORTX shares do not reflect the risk-adjusted potential of the pipeline … “The high sales potential here prompts Rama to rate the share as an outperform (buy) and set a price target of USD 15, which implies a robust position 122% Upside potential over the next 12 months. (To view Rama’s track record, click here) A. In this regard, too, Wall Street generally agrees with JPM. ORTX shares have 6 buy ratings for a unanimous consensus rating from analysts at Strong Buy, and the average price target of $ 15.17 indicates an upward movement of 124% from the current trading price of $ 6.76. (See Orchard’s stock analysis at TipRanks.) Disclaimer: The opinions expressed in this article are solely those of the analysts featured. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.