Last week, the S&P 500 ended Friday’s session with a rally that gave the index a small gain of 0.15% for the day. This was also a good thing, as the indicator flirted with a net -20% loss during the session. This is the market zone, the kind of market move that will frighten investors even more after the spring headaches.
Inflation is at a 40-year high, Q1 has seen a net economic contraction, Russia’s war against Ukraine has promised more losses in food, cooking oil and the advancing summer petroleum market supply and prices, COVID has fallen but not really gone, and China’s action – tougher The combination of anti-COVID lockdown policy and geopolitical aggression on different fronts – all add to these factors.
Market pundits are not only talking about a potential recession, they are revolving around the notion of stagnation, a toxic combination of inflation, high unemployment and economic contraction that we have not seen since the Carter administration.
Although the market situation has begun to deteriorate, JPMorgan global market strategist Marco Kolanovich sees the potential for risk-friendly investors.
“Equity Market Value at Extreme Recession Risk: We estimate that equity markets in the US and Eurozone are pricing in the near-term recession probability of ~ 70%, G 50% on HG Credit, ~ 30% on HY and 10 10 on the rate market. 20%. We are also skeptical of the notion that April’s equity fund outflows are the highest since March 2020, only the beginning of a longer period of outflows, so we maintain a risk-taking position, “Kolanovich wrote.
Kolanovich added, “If the recession did not come, multiple derating was already very important, and due to the reduced position and low sentiment, equities have to recover from here,” Kolanovich added.
In addition to Kolanovich’s view of the macro situation, stock analysts at JPMorgan are also diving into three stocks that are down, but still showing strong reversal potential, 90% or better for the coming year. Using TipRanks’ database, we found that the rest of the road is also on board because all three have a “Strong Buy” consensus rating.
ACV Auction (ACVA)
We will look at the first stock, ACV auction, bringing the wholesale auto dealer auction to the online world, a step that makes the wholesale process faster and more transparent, benefiting both dealers and buyers in the long run. ACV’s subsidiaries handle every aspect of the wholesale auction process, from transporting vehicles, to providing third party inspections to those vehicles, to conducting auctions – even to financing buyers.
Although the ACV fills a required space, and the company’s earnings have been on an upward trend for the past year, the stock has declined significantly during that time. The ACV went public at the end of March 2021, and since then, the stock has fallen 74%.
Although the share price has declined, as mentioned, the earnings have increased. The company reported Q 69 million in the top line in its first public quarterly report of 1Q21. In a recent report, for 1Q22, that top line came in at 103 million, an impressive 49% gain. Investors, worried, though, by the company’s deep net losses. In that first publicly reported quarter, total GAAP net loss came to $ 17 million. It was $ 26.3 million in 4Q21, and increased to $ 29 million in 1Q22.
Not every net loss is a net negative. ACV has a history of smart spending, including investing in online technology and sales tools to improve service quality. This is a key point for JPMorgan analyst Rajat Gupta, who writes, “Despite the constant uncertainty surrounding the wholesale industry, ACVA continues to invest prudently in new tools and offers for customers and is on track to expand market share, which will eventually get better when the market finally recovers. . There is no change in our view of the LT story, which is mandatory today due to the huge ~ 22 million addressable market with <10% online penetration. "
Consistent with these comments, Gupta gave the stock an overweight (i.e. buy) rating, suggesting a ্যের 15 price target of ~ 91% a year high. (To view Gupta’s track record, Click here)
JPM’s approach here is hardly an external one. The stock has 10 recent analyst reviews and they are unanimously positive, for a strong buy consensus rating. The share price is 7.92 and their মূল্য 18.90 average price target represents an increase of% 140% for the next 12 months. (See ACVA Stock Forecast at TipRanks)
Boot burn holdings (Boot)
Images are important, and people want to give them an image. That’s the decent thing to do, and it should end there. The company is a fast-growing retail chain that supplies western-style footwear and apparel as well as workwear and accessories. Bootburn has more than 300 locations across 38 states and reported total revenues of $ 1.48 billion in its 2022 fiscal year.
This included strong year-over-year growth in each quarter, as consumers returned to shopping with the lifting of COVID restrictions. As reported in the most recent quarter, Financial 4Q22, the company showed শীর্ষ 383.3 million at the top line, with revenue up 48% year on year.
The company is also profitable. Net income of $ 44.7 million in the 4th quarter of fiscal year increased 81% from $ 24.6 million in the same quarter a year ago, and translated into a thin EPS of $ 1.47. The company saw its same-store sales grow 33% quarterly and 53% year-over-year. Despite this positive metric, however, the market downturn has pushed BOOT shares down 41% so far this year.
According to analyst Matthew Boss, this only opens up access for investors when receipts are good. Writing for JPMorgan, Boss described the boot as a ‘Top Small Cap Growth Idea’ and wrote in the following lines: Destination nature of its store base), BOOT targets steady merchandise margin improvement over time combined with low fixed-cost barriers to drive EBIT margin expansion to 10% + over time. “
These comments support the boss’s overweight (i.e. buy) rating, while his $ 171 price target indicates a ~ 135% increase by the end of the year. (See the boss’s track record, Click here)
Other analysts are on the same page. With 5 purchases and 1 hold in the last three months, the word on the street is that boots are a strong buy. The share price is currently at $ 72, and the মূল্য 141.33 average price target suggests a double-digit increase of ~ 95%. (See Tiprank Boot Stock Forecast)
Springworks Therapeutics (SWTX)
We will be involved in the biopharma industry, where Springworks is a clinical-level research firm developing new treatments for rare diseases, including various cancers. The company manages both by creating new drug candidates and acquiring rights to existing programs and taking the drug to the commercialization process at the clinical research stage.
SpringWorks has two major drug candidates, in initial and final-stage clinical trials, which are conducted by both SpringWorks and in conjunction with other drug companies. The more advanced of the two, Nirogasestat, is a gamma secretion inhibitor of less than 10 studies.
The most distant step 3 in the treatment of desmoid tumors in adults is the study of monotherapy. The initial end point of this study, the Defy Trial, is progress-free survival. The company expects to release topline data on 2Q22. In addition to these trials, the company is recruiting for Phase 2 trials among pediatric patients with desmoid tumors. The trial will be co-sponsored by the Children’s Oncology Group. Finally, Springworks is working on a randomized phase 2 cohort expansion trial of nirogacestat in combination with BLENREP against multiple myeloma with GSK. The company expects to release the findings at a meeting of the American Society of Clinical Oncology in June.
In addition to the Nirogasestat program, Springworks is developing myradametinib as an MEK inhibitor. The two most advanced tracks here are the Phase 2b Renewal Trial and the Running Phase 1/2 Trial Children have gliomas. The ReNeu trial has been fully documented and will evaluate the drug as a treatment for adults and children with neurofibromatosis type 1-related plexiform neurofibromas. The Phase 1/2 study is being conducted in collaboration with BeiGene, and is evaluating Mirdametinib as a variety of malignant therapies, including refractory solid tumors that harbor RAS mutations, RAF mutations, and other MAPK pathway disorders.
Despite the highly diversified and active pipeline, shares of Springworks have fallen 53% in the last 12 months. However, JPMorgan analyst Anupam Rama thinks that this low stock price could give new investors a chance to move to SWTX cheaper.
“SWTX shares have been on the JP Morgan Analyst Focus list for the past 4-6 weeks, probably expecting multiple key data readouts. In our view, Phase 3 Defy Study has a high probability of success and the initial BCMA combination data could underscore multiple modality catalysts for the program in the next ~ 6-18 months, ”Rama commented.
To that end, Rama gives the SWTX an overweight (i.e. buy) rating and sets a ্যের 98 price target which indicates a potential upside of ~ 166% this year. (To see Ram’s track record, Click here)
All in all, this small-cap biopharmaceutical has gone somewhat under the radar and has only 3 recent analyst reviews. Although they are all positive and give the stock a strong buy consensus rating. The shares are trading at $ 36.81 and the মূল্য 116.67 average price target suggests a strong 218% gain for the months ahead. (See SWTX Stock Forecast at TipRanks)
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Disclaimer: The views expressed in this article are those of the featured analysts only. Content is intended for informational purposes only. It is very important to do your own analysis before making any investment.