Raymond James: These 3 stocks have over 100% upside potential on the horizon
We are now in the heart of the earnings season, and investors are paying close attention to how companies report their financial results for the first quarter of 2021. In some ways this is routine, in others there has never been a winning season like this. It’s the first post-pandemic, but perhaps more importantly, the results are being released at a time of near-unprecedented government stimulus spending. There is no real comparison of how the cash inflows will affect the bottom line. With Raymond James in mind, strategist Tavis McCourt has identified some of the key points for investors to consider. First, McCourt notes that “the EPS of the S&P 500 2021 consensus continues to increase almost daily, increasing an additional 2% in the first two weeks of earnings season”. McCourt identifies the correct historical stance on current conditions: “Typically, we see positive earnings revisions in the first 1-2 years of an economic recovery …” The comparison breaks down, however, as the estimated revisions keep rising. “… Analysts / management teams / this strategist continue to underestimate the positive impact of tax support (not ‘modelable’ as has never been done this way before) on corporate profits,” added McCourt. With that in mind, we wanted to take a closer look at three stocks that have received the Raymond James Seal of Approval. With a bullish rating, the company’s analysts assume that any rating could rise by over 100% in the coming year. As we went through the tickers through the TipRanks database, we found out all the details and what makes them such compelling games. Landos Biopharma (LABP) We start with a newcomer to the markets. Landos Biopharma only held its IPO last February when it was trading on NASDAQ. The company is a clinical-stage biopharmaceutical company focused on autoimmune diseases. Landos uses a proprietary computer platform to develop new drug candidates and has identified seven so far. The lead candidate is BT-11 (Omilancor), a new treatment for patients with ulcerative colitis. BT-11 is a small molecule that targets the lanthionine synthetase C-Like 2 (LANCL2) pathway, an action designed to limit gastrointestinal impact. In January of this year, Landos reported positive results from the Phase 2 proof-of-concept study of BT-11 with remission rates of 11.5% at Week 12 for patients given once-daily oral dosing. Landos plans to expand the Omilancor clinical trials with a phase 3 study in patients with ulcerative colitis and a phase 2 study in patients with Crohn’s disease, which is planned for later this year. The company’s other drug candidates are at an earlier stage in the development pipeline, but positive results have been reported from its candidate NX-13, another potential for ulcerative colitis. In a Phase 1 safety study in healthy volunteers, the company reported no adverse results while meeting all primary and secondary endpoints. A phase 1b study is planned for the second half of 2021. The fans include Raymond James analyst Steven Seedhouse, who sees the value factor in the company’s novel approach. “[New] Mechanisms, Particularly in Chronic Immune Diseases 1) Cut out a potentially larger piece of the TAM cake in the lead indication (in this case UC) and 2) open the door to subsequent indications once the new immune disease mechanism is validated. The value proposition for BT-11 could theoretically be like Otezla (PDE4 inhibitor), which Amgen acquired for $ 11.2 billion minus tax benefits on 7x sales of $ 1.6 billion in the previous year (2018) “, said Seedhouse. In the longer term, Seedhouse believes Landos is on a profitable path. “Mild UC patients make up> 50% of patients with active disease. The vast majority of drugs approved or under development for UC over the past 20 years target the highly competitive (but smaller) market for moderate to severe patients Outside 5-ASA and corticosteroids, the population remains largely untapped. Substantial efficacy and safety in refractory mild to moderate 5-ASA patients will help BT-11 reach our estimated unadjusted peak sales of ~ $ 1 billion. To reach USD, “added the analyst. In line with these comments, Seedhouse is outperforming (ie buying) LABP and its target price of $ 33 suggests an impressive uptrend of 219% for the coming year. (To see Seedhouse’s track record, click here.) Landos Biopharma has caught analyst attention in its short time as a public company and already has 4 reviews. These are split into 3 buys and 1 hold for a strong buy consensus rating. The stock is priced at $ 10.18, and their average price target of $ 25.50 implies an uptrend of 146%. (See LABP stock analysis on TipRanks) Haemonetics Corporation (HAE) Haemonetics Corporation is a major player in the blood business. The company produces a full range of products for blood collection and separation as well as the software for operating the machines and service contracts for their maintenance. The US blood products market reached $ 10.5 billion last year, and its largest segment, plasma products and blood components, accounts for around 80% of that market. The Haemonetics product line was developed to meet the needs of this segment. HAE stocks saw steady growth from August through February – a sustained 85% period. However, earlier this month, HAE fell 35% to its lowest level in over three years after it was revealed that CSL Pharma had intended not to renew its supply agreement with Haemonetics. The agreement to supply and use the PCS2 plasma collection system earned Haemonetics $ 117 million in sales – or nearly 12% of the company’s total sales. In addition to the lost revenue, Haemonetics will incur additional one-time losses of $ 32 million related to the cancellation. The current supply contract expires in June next year. Lawrence Keusch, an analyst who watched Haemonetics for Raymond James, felt it appropriate to maintain his outperform rating (i.e. buy rating) on the stock even after the CSL announcement. “We acknowledge that Haemonetics has become a show-me story as it will be important for investors to understand how corporate strategy evolves in the face of the loss of the CSL contract. We believe Haemonetics can mitigate the estimated $ 0.85 impact on revenue from loss of contract (the company has approximately 14 months to size the company) and additional market share gains. We assume that it will take some time before a new growth path becomes visible, ”said Keusch. Keusch stands ready to give HAE the time it needs to recover and return to a growth path, and his price target of $ 155 shows the level of his confidence – an uptrend of 128% for the stock over the next 12 months. (To see Keusch’s track record, click here.) Overall, Haemonetics shows a 5 to 2 breakdown of Wall Street analysts’ buy and hold recommendations, giving HAE stocks a moderate buy consensus rating. The stock has an average price target of $ 122, indicating an upside of ~ 79% from the current trading price of $ 67.96. (See HAE stock analysis on TipRanks.) Maxeon Solar Technologies (MAXN) Let’s shift gears and look at the solar technology sector. Maxeon produces and sells solar modules worldwide under the SunPower brand outside of the USA and under its own name within the USA. The company spun off from SunPower last summer when the parent company split its manufacturing business. Maxeon, the spin-off company, is a solar module manufacturer with a line of products valued at $ 1.2 billion in annual sales, more than 900 patents in the solar industry, and over 1,100 sales and installation partners in over 100 countries. In the fourth quarter of 2021, the last reported, Maxeon saw solid sequential revenue growth from $ 207 million to $ 246 million, an increase of 18%. Earnings, which were heavily negative in the third quarter – at a loss of $ 2.73 per share – were positive in the fourth quarter when earnings per share were 11 cents. Pavel Molchanov of Raymond James, rated 5 stars by TipRanks, is impressed with the company’s overall position in the market and sees that the positives outweigh the negatives. “This is a commodity story with a short-term margin structure that is weighed down by the supply of old polysilicon. We are fans of the company’s above-average commitment to the European market, which will soon be strengthened by the European climate law. as well as the participation in a joint venture in China, whose already world-leading new PV buildings could receive a further boost from the newly launched emissions trading program, ”wrote Molchanov. To this end, Molchanov rates MAXN as outperforming (i.e. buying) and sets a price target of $ 45, which indicates room for 127% growth in the coming year. (To see Molchanov’s track record, click here.) MAXN stocks have so far managed to get under the radar and have only received two recent valuations. Buy and keep. The stock is trading at $ 19.86, with an average target of $ 34 that offers room for ~ 71% growth by year-end. (See MAXN stock analysis on TipRanks.) To find great ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, ‘a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the presented analysts. 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.