3 shares JP Morgan Says is ready to tear higher
Take a deep breath, get ready, the New Year is just around the corner, and while we are all ready to celebrate – just in principle, to get out of 2020 is reason enough for joy – let’s also take stock of where we are and where we are on our way. There is a growing sense of optimism, caused by the availability of COVID vaccines and the potential they offer to return to normal on main streets around the country. Finally, a chance that locking and social distancing regimes will really come to an end, and in the short term. There is a real chance that John Q. Public by the end of 2021
can get back on his feet. Combine that with Wall Street’s current eternity, as stock markets trade at or near their high levels, and we look at the prospect of a banner year. A return to the normality of the grass roots will be great – but we also have the prospect of a generally growing market. Writing from JPMorgan, head of US equities strategist Dubravko Lakos-Bujas, writes: “Equities are facing one of the best scenes in many years. The risk associated with global trade tensions, political uncertainty and the pandemic will disappear. At the same time, liquidity conditions are extremely supportive, and there is an extremely favorable interest rate environment. It is a golden environment for risky assets. “Lakos-Bujas does not shy away from quantifying optimism. He predicts as much as a 19% gain for the S&P 500, and says the index will hit 4,000 at the beginning of 2021 and now as high as 4,400 in the latter part of the year. By making Lakos-Buja’s views concrete recommendations, JPM’s cadres of stock analysts point to three stocks that look particularly convincing. We ran the trio through the TipRanks database to see what other Wall Street analysts have to say about. Sotera Health (SHC) Sotera Health has a unique niche in healthcare and offers a number of safety-oriented support companies for healthcare professionals through its subsidiaries. These services include sterilization procedures, laboratory testing and counseling services – and their significance is immediately clear. Sotera has over 5,800 customers from healthcare professionals in more than 50 countries worldwide. Although it is not a new company – two of its branches have been in business since the 1930s and 40s – Sotera is new to the stock markets, having had its listing on the market this past November. The original offer was considered successful, raising $ 1.2 billion from a sale of 53.6 million shares. Earlier this month, Sotera announced that it was using much of its listing capital to pay off $ 1.1 billion in existing debt. This included $ 341 million in a first mortgage loan, plus $ 770 million in total principal on an issue of senior-secured banknotes. The move allowed Sotera to increase its revolving credit facility to $ 347.5 million. This facility is currently not pulled. Among the bulls is JPM analyst Tycho Peterson, who rates SHC as overweight (ie buy) along with a one-year price target of $ 35. This figure suggests an upside of 31% from today’s level. (To view Peterson’s track record, click here) “SHC is uniquely positioned to benefit from healthy end-market growth and favorable price dynamics,” Peterson noted. “Given a diversified operating platform, sticky multi-year contracts, an effective pricing strategy, significant entry barriers and high regulatory oversight, we estimate ~ 9% sales growth, with higher utilization driving continued expansion [and] robust FCF supports ongoing liquidation, which gives us positive on both short- and long-term prospects. The Wall Street analyst corps is completely behind Peterson on this – in fact, the 7 recent assessments are unanimous Buys, which makes the analyst agree on a strong buy. SHC is currently trading at $ 26.75, and its average price target of $ 32.50 represents an upside of 21.5% by the end of 2021. (See SHC stock analysis on TipRanks) Myovant Sciences (MYOV) Let’s stick to healthcare , and look at Myovant Science. This clinical research biopharmaceutical company focuses on major problems with reproductive system disease in both men and women. In particular, Myovant is working to develop treatments for uterine fibroids, endometriosis and prostate cancer. Myovant’s pipeline currently contains Relugolix as a treatment for fibroids and endometriosis. The drug is in phase 3 trial for the latter, and has had the NDA submitted for the former. MVT-602, a new drug designed to improve egg maturation and aid in in vitro fertilization, is also underway, and Myovant announced this month that Relugolix is approved by the FDA – under the brand name Orgovyx – as a treatment for advanced prostate cancer. . The drug is the first, and currently only, oral gonadotropin-releasing hormone (GnRH) receptor antagonist for the disease. Orgovyx is expected to enter the market in January 2021. Analyst Eric Joseph, in the note for this stock for JPM, describes how impressed he is with Relugolix “based on the clinical and commercial potential of lead active relugolix for the treatment of endometriosis and uterine fibroids, as well as in men for the treatment of advanced prostate cancer. The analyst added: “In women’s health, we believe that the total amount of phase 3 data to date reduces the likelihood of relugolix approval in the United States for uterine fibroids and endometriosis – commercial opportunities that are underreflected at the current level. Furthermore, we see an attractive commercial approach for relugolix in the treatment of advanced prostate cancer as an oral LHRH alternative with a differentiated CV risk profile. “These comments support Joseph’s predominance (ie purchase) of MYOV, and his $ 30 price target represents a 31% increase over the next 12 months. (To see Joseph’s track record, click here) Overall, the Strong Buy analyst consensus rating on Myovant comes from 5 reviews, and the distribution is clear for the bulls: 4 to 1 for Buy versus Hold. The stock’s share price of $ 22.80 and average price target of $ 36.40 gives a robust up-potential of ~ 59%. (See MYOV share analysis on TipRanks) Metropolitan Bank Holding (MCB) For the third share, we are changing paths from healthcare to financing, where Metropolitan Bank Holding operates – through its subsidiary Metropolitan Commercial Bank – as a full-service bank for business, entrepreneurial and private customers in the mid-market segment. The bank’s services include business lending, cash handling, deposits, electronic banking, personal control and prepaid cards. In a year that has been difficult for most of us, MCB has managed to put in ever-increasing revenues and solid earnings. The bank’s top line has increased from $ 33 million in the first quarter to $ 36 million in the third quarter. EPS was stronger, at $ 1.27 per share, up 30% from the previous year. The gains come when the bank provides a guidance of $ 153.9 million in total revenues for next year, which – if met – will reflect a gain of 22% during 2020. While MCB’s financial results have shown steady gains, have not stock management followed. The stock has only partially recovered losses taken last winter at the height of the corona crisis, and is currently down 26% this year. Looking at the banking scene in New York from JPM, analyst Steven Alexopoulos notes the general difficulties in the commercial real estate lending sector – an important part of MCB’s portfolio – due to ongoing pandemic problems. In this environment, he sees Metropolitan Bank as the right choice. “We are not as bearish as most on the prospects for New York real estate. After witnessing many cycles in NYC, the time to buy has been when the herd runs in the other direction. In previous cycles, MCB has been a better competitor than the credit measurements in terms of the loan portfolio in relation to our coverage group, “Alexopoulos noted. Alexopoulos further explains another key strength in MCB’s loan portfolio:” In a low interest rate environment, MCB is better positioned than peers to resist NIM headwind with 59% of MCB’s loans as fixed interest rates and 67% of the remaining floating interest rate loans have a floor to protect against lower short-term interest rates … ”Alexopoulos considers MCB to be overweight (ie Buy) together with a price target of $ 50. If the target is achieved, investors can receive gains of 43% over the next year. (To see Alexopoulos’ track record, click here) Some stocks are flying under the radar, and MCB is one of them. Alexopoulos is the only recently reviewed analyst of this company, and it is definitely positive. (See MCB stock analysis on TipRanks) To find great ideas for stocks that trade at attractive valuations, visit TipRanks ‘Best Aks to Buy, a recently launched tool that unites all of TipRanks’ equity insights. Disclaimer: Opinions expressed in this article are solely those of the selected analyst. The content is for informational purposes only. It is very important to do your own analysis before making an investment.