J.P. Morgan states that these 3 stocks could exceed 100% of current levels
After the summer bulls, the markets have corrected, but above all sales have been heavily concentrated in the technology sector. The high-tech NASDAQ is now leading the fall, having lost 11.5% since Sept. 2, JPMorgan strategist Marko Kolanovic points out that much of the market is now well positioned for a rebound. Kolanovic believes stocks will return to the upside in the final quarter of the year. “Now we think the selloff is probably over. The positioning is low. We̵
7;ve had a bit of a purge, so we think the market may actually move higher from here, “Kolanovic noted. Acting on Kolanovic’s outlook, JPMorgan equity analysts are starting to emphasize their choices for another run. to the upside. These are stocks that JPM believes will double or improve over the next year. By scrolling the tickers through the TipRanks database, we wanted to find out what makes them so attractive.NexTier Oilfield Solutions (NEX) JPM’s first choice is NexTier , an oilfield support service provider. The oil industry is more than just manufacturing companies. There are a large number of companies providing drilling expertise, fracking fluid technology, geological expertise, pumping systems : all the ancillary services that allow drillers to extract oil and gas. This is the sector where NexTier lives. and, it is an industry that has proved vulnerable to falling oil prices and the economic upheaval caused by the coronavirus pandemic crisis. Revenues fell from $ 627 million in the first quarter to $ 196 million in the second; EPS was negative in both quarters, but NexTier has some advantages that put it in a good position to take advantage of a market recovery. These benefits, among others, are in the mind of JPM analyst Sean Meakim. “Sure, we’re worried about the industry disappointing the generalist ‘COVID-19 recovery’ crowd given the beta earnings asymmetry to oil, but with 1) a solid balance sheet ($ 17mm net debt), 2) our positive (if modest) cash generation outlook in 2021 (JPMe + $ 20mm), 3) a path to providing comparatively attractive usage levels and margins, and 4) the cheapest valuation in the group (~ 20% replacement), we believe that NexTier stands out as one of the best positioned pressure pumping systems in our roofing, ”Meakim said. Consistent with his optimism, Meakim views NEX as an overweight (ie a buy) along with a price target of $ 5. His target suggests a potential bullishness of 203% for the next year. (To see Meakim’s track record, click here) Likewise, the rest of the road is getting on board. 6 Buy and 2 Hold ratings assigned in the last three months add up to the consensus of Strong Buy analysts. Additionally, the median price target of $ 3.70 places the potential twelve-month gain at 124%. (See NEX Stock Analysis on TipRanks) Fly Leasing (FLY) The next stock on our JPMorgan pick list is Fly Leasing, a company with an attractive niche in the airline industry. It’s not commonly known, but most airlines don’t actually own their own aircraft; for a variety of reasons, they rent them out. Fly Leasing, which owns a fleet of 86 commercial airliners worth $ 2.7 billion, is one of the leasing companies. Its aircraft, mainly Boeing 737 and Airbus A320, are chartered to 41 airlines in 25 countries. Fly Leasing derives income from rentals, maintenance fees and security payments.As you can imagine, the crown crisis – and in particular, travel locks and restrictions that are not yet completely removed – have damaged Fly Leasing, together with the aviation sector in general. With flights blocked and ticket sales severely depressed, revenue has fallen and airlines have been forced to reduce or defer airline rental payments. This is a situation that is only now beginning to improve, the numbers prove it, as far as possible. FLY’s revenue fell from $ 135 million in 4Q19 to $ 87 million in the first quarter of 2020 to $ 79 million in the most recent quarter. EPS, likewise, fell, with Q2 showing just 37 cents, well below the forecast of 43 cents. But there are some bright spots and JPM’s Jamie Baker points out the most important. “[We] prudently do not expect deferred repayments in 2H20 compared to the 37 million dollars expected by management. Overall, our deferral and repayment assumptions are in line with other lessors in our coverage. We are not making any investments for the remainder of the year, in line with management’s comment for no capital commitment in 2020 […] Despite the recent volatility observed in space, we believe that lessors’ earnings profiles are more robust than airlines, “Baker noted. In short, Baker believes Fly Leasing has kept tabs on its income, expenses and Cash situation, putting the stocks in the starting blocks should the markets turn for the better. Baker values FLY as overweight (ie Buy) and his price target of $ 15 implies a powerful 155% upside for the next 12 months (To see Baker’s track record, click here.) Over the past 3 months, two other analysts have thrown the hat ahead of the aircraft leasing company. The two additional purchase ratings give FLY a Strong Buy consensus rating. With an average price target of $ 11.83, investors could take home a 101% gain if the target is met in the next 12 months. (See FLY stock analysis on TipRanks. ) Lincoln National Corporation (LNC) Last up, Lincoln National, is a Pennsylvania-based insurance holding company. Lincoln’s subsidiaries and businesses are divided into four segments: annuities, group protection, life insurance, and retirement plans. The company is listed on the S&P 500, boasts a market capitalization of $ 5.8 billion and over $ 290 billion in total assets. The generally depressed economic climate of the first half held LCN back, pushing revenues to $ 3.5 billion from $ 4.3 billion six months ago. Earnings are also down. Second quarter EPS came in at 97 cents, missing the forecast by 36%. There is a bright spot: Through it all, LNC has kept dividend payments, no cuts and no suspensions. The current quarterly dividend is 40 cents per common share, or $ 1.60 per year, and has a yield of 4.7%. That’s nearly 2.5 times the return found among similar companies on the S&P 500.Jimmy Bhullar hedges this stock for JPM and while acknowledging weak second quarter results, he also points out that the company should benefit from the slow return of business conditions. normal. “LNC’s Q2 results were weak, marked by a shortage of EPS and weak economic trends. Most of the shortfall was due to high COVID-19 reimbursement claims and weak alternative investment income, factors that are expected to improve in future periods […] The market recovery should also help alternative investment earnings and reported spreads … “These comments support Bhullar’s Overweight rating. Its price target of $ 73 indicates room for a robust 143% upside from current levels (To see Bhullar’s track record, click here) Overall, the moderate buy rating on LNC is based on 3 recent buy reviews, versus 5 taken. The stock is selling for $ 30 and the average price target is $ 45.13, suggesting a possible 50% upside for next year. (See LNC Stock Analysis on TipRanks) To find good ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buys, a newly launched tool that combines all of TipRanks’ equity insights. those of the analysts present. The content should be used for informational purposes only. It is very important to do your own analysis before making any any investment.