JPMorgan bets on these 3 actions; See more than 50% improvement potential
Time to check out the macro picture, to get an idea of where the markets are heading in the coming months. That’s what a JPMorgan global research team, led by Joyce Chang, has been doing. The JPM team begins by noting the sell-off of US Treasuries last week, which boosted yields as investors acted in response to inflationary fears. However, rising bond yields leveled off on Friday, and Chang’s team doesn’t think inflation is the big bugaboo it pretends to be; His team sees a combination of economic growth and fiscal stimulus that creates a virtuous cycle of consumer spending that drives higher growth. They write: “Our global economy team now forecasts that US nominal GDP will average approximately 7% growth this year and next, as targeted measures have been successful in addressing COVID-19 and economic activity is not being jeopardized. Global growth will exceed 5% … ”What this means, in JPM’s view, is that next year should be good for stocks. Interest rates are likely to remain low, in the company’s estimate, while inflation should moderate as the economy returns to normal. JPM equity analysts have been following the strategy team and looking for the stocks they see as winners for the next 12 months. Three of their recent picks are an interesting lot, with Strong Buy ratings from the analyst community and more than 50% upside potential. We have used the TipRanks database to get the details. We’ll see. On24 (ONTF) The first JPM pick we look for here is On24, the online streaming service that offers third-party access for scaled and customized network events. In other words, On24 makes its streaming service available for other companies to use in setting up interactive features, including webinars, virtual events, and multimedia experiences. The San Francisco-based company has a base of more than 1,900 corporate users. On24 customers interact online with more than 4 million professionals each month, for more than 42 million hours a year. As you can imagine, On24 saw a surge in customer and business interest last year, as virtual offices and telecommuting situations expanded, and the company has now used it as a basis for going public. On24 made its IPO last month and entered the NYSE on February 3. The opening was a success; 8.56 million shares were put on the market at $ 77 each, well above the initial price of $ 50. However, stocks have taken a hit since then and are down 36%. However, JPM’s Sterling Auty believes the company is well placed to capitalize on current trends. “We believe that the COVID-19 pandemic has forever changed the face of B2B sales and marketing. It has forced companies to shift most of their lead generation to the digital world, where On24 is often considered the best webinar / webcast provider, “wrote the five-star analyst.” Even after a pandemic, we expect that the marketing movement is hybrid and that digital and face-to-face are equally important. That should drive greater adoption of On24-like solutions, and we hope On24 will capture a significant portion of that opportunity. ” In line with these upbeat comments, Auty began hedging the stock with a rating of Overweight (i.e. Buy), and its $ 85 price target suggests it has room for a 73% increase over the next 12 months. (To view Auty’s history, click here.) Sometimes a company is so strong and successful that Wall Street analysts line up right behind it, and that’s the case here. Strong Buy’s analyst consensus rating is unanimous, based on 8 buy-side reviews published since the stock went public just over a month ago. The stock is currently trading at $ 49.25, and its median price target of $ 74 is a 50% rise from that level. (See On24’s stock analysis on TipRanks.) Plug Power, Inc. (PLUG) And we move on to the reusable energy sector, we will take a look at a JPM selection of “green energy.” Plug Power designs and manufactures hydrogen energy cells, a technology with great potential as a possible replacement for traditional batteries. Hydrogen power cells have potential applications in the automotive sector, such as alternative fuel car power packages, but also in almost any application that involves energy storage – home heating, portable electronics, and backup power systems, to name just a few. . Over the past year, PLUG’s stock has seen a tremendous rise, rising more than 800%. The action received an additional boost after Joe Biden’s victory in the presidential election, and his platform promises to encourage ‘Green Energy’. But the stock has declined dramatically recently, as have many big-growth names. The poor 4Q20 results also help explain the recent selloff. Plug reported a deep loss of $ 1.12 per share, far worse than the expected 8 cent loss, or the 7 cent loss reported in the prior year quarter. In fact, PLUG has never reported positive earnings. This company is backed by the quality of its technology and the potential for adoption of that technology as the industry moves toward renewable energy sources, but we are not there yet, despite progress in that direction. The stock price decline makes PLUG an attractive proposition, according to JPM analyst Paul Coster. “In the context of the company’s many long-term growth opportunities, we believe the stock is currently attractively priced, ahead of potential positive catalysts, including additional earnings from ‘pedestal’ clients, partnerships and companies. joint ventures that allow the company to enter new geographies. and end-market applications quickly and with a modest capital commitment, ”said the analyst. “Today, PLUG is a historic action that attracts both thematic investors and generalists seeking exposure to the growth of renewables and hydrogen in particular.” Coster’s upbeat feedback comes with a PLUG rating improvement from Neutral (i.e. Hold) to Overweight (Buy), and a $ 65 price target indicating a possible 55% improvement. (To view Coster’s history, click here.) Plug Power also has a lot of support among Coster colleagues. 13 recent analyst reviews break down into 11 buys and 1 hold and sell, each of which adds to a consensus rating of Strong Buy. PLUG’s stock is selling for $ 39.3 and has an average price target of $ 62.85, suggesting a potential upside of 60% at one year. (See Plug’s stock analysis on TipRanks.) Orchard Therapeutics, PLC (ORTX) The latest JPM stock pick that we will look at is Orchard Therapeutics, a biopharmaceutical research company focused on developing gene therapies for the treatment of rare diseases. The company’s goal is to create 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 product portfolio includes two drug candidates that have received EU approval. The first, OTL-200, is a treatment for metachromatic leukodystrophy (MLD), a severe metabolic disease that leads to loss of sensory, motor, and cognitive function. Strimvelis, the second approved drug, is a gammaretroviral vector-based gene therapy and the first ex vivo autologous gene therapy of its kind to receive approval from 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 10 other candidate drugs at various stages of the development process, from preclinical research to early-phase trials. Anupam Rama, another of JPM’s five-star analysts, dived deep into Orchard and was impressed with what he saw. In his coverage of the stock, he makes several key points: “The maturation of data in various indications in rare genetic diseases continues to reduce the risk of the broader platform of ex vivo autologous gene therapy from an efficacy / safety perspective … Key opportunities in MLD (including OTL-200 and other drug candidates) have sales potential each in the range of ~ $ 200-400 million … Importantly, the overall benefit / risk profile of Orchard’s approach looks favorably in the eyes of doctors. At current levels, we believe ORTX’s stock does not reflect the pipeline’s risk-adjusted potential … ”The high selling potential here prompts Rama to rate the stock Superior (Buy) and set a price target of $ 15, which implies a solid 122% upside potential in the next 12 months. (To view Rama’s history, click here.) Wall Street generally agrees with JPM on this case as well. ORTX stock has 6 Buy reviews, for a Strong Buy analyst consensus rating, and the average price target of $ 15.17 suggests a 124% increase from the current trading price of $ 6.76. (See Orchard’s stock analysis on TipRanks.) Disclaimer: The opinions expressed in this article are solely those of prominent 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.