TipRanks
J.P. Morgan: 3 Stocks That Could Climb Over 60%
We’re nicely into earnings season, and the mixture company earnings are beating expectations as soon as once more. In a manner, this isn’t a shock; earnings are popping out within the midst of a large financial reopening, which started again within the first quarter. With lockdowns and compelled closures receding into the background, it shouldn’t be stunning that total EPS is up. But we’re seeing some surprises – and a few contradictions. From JPMorgan, John Normand writes, “Despite already elevated estimates entering the season, earnings delivery has surprised to the upside in both the US and Europe and S&P 500 blended EPS continues to be revised higher. However, stock price reaction has been disappointing despite the strong beats. Misses are being penalized as per usual, and the beats are not translating into positive stock price reaction.” So in opposition to a background of rising equities, there are particular person shares that merely aren’t reacting the way in which we’d anticipate. Normand isn’t the one one to note this, or to remark on it. Weighing in from CNBC, Jim Cramer mentioned not too long ago, “Unless your company’s a huge beneficiary from the great reopening, nobody cares. Even then, you’ve gotta deliver a massive upside surprise — not just a regular upside surprise — to get this market’s attention.” It could also be fairer to say that, with the general development of rising markets and the more and more optimistic sentiment associated to easily getting again to enterprise, stable earnings had been anticipated. And the market indexes are reflecting this. The S&P 500 is up 5.3% over the previous month, and the NASDAQ has gained 7.5%. The key for buyers will probably be, as at all times, to seek out the shares which can be fueling total features. Using the TipRanks platform, we’ve pinpointed Three shares that function a Strong Buy analyst consensus ranking with double-digit upside potential. And higher but, in keeping with Normand’s analyst colleagues from JPMorgan, that double-digit upside begins at 60%. Here are the main points. Bilibili, Inc. (BILI) Some developments are worldwide in scope, and Japan’s anime and comedian universes have proven a transparent capacity to traverse cultures. So a lot so, in actual fact, that the Chinese video sharing web site Bilibili has grown to be a $45 billion firm by initially focusing on this market. Bilibili’s shares have seen robust progress not too long ago, and for the previous 12 months are up a powerful 347%, far outpacing the general markets. While the anime area of interest gave Bilibili a stable basis to start out from, the corporate has been increasing its choices. It now gives customers entry to a ‘full-spectrum video community,’ with content material in way of life, video games, leisure, and tech & information. The platform permits each skilled and occupational user-generated content material, and Bilibili describes its worth proposition as ‘All the Videos You Like.’ The firm’s content material growth has fueled monetary progress. Total revenues within the final quarterly report – for 4Q20 – reached $588.5 million, for a acquire of 104% year-over-year. The person base expanded dramatically, too; the common month-to-month energetic person depend (MAU) elevated by 55%, to 202 million, whereas on the cell app MAUs hit 186.5 million, for a 61% yoy acquire. The year-over-year improve in common month-to-month paying customers (MPU) was much more spectacular, at 103%. MPU on the finish of This autumn was 17.9 million. All of this has JPM’s Alex Yao bullish on Bilibili, and he writes, “We believe BILI mgmt’s 2023 MAU guidance of 400m is a positive surprise to the market and it makes our 2025 MAU estimate of 600m more plausible. In addition, ads revenue growth accelerated for seven quarters consecutively to 150% YoY in 4Q20, while mgmt remains optimistic on the ads growth outlook in 2020. As the stock mostly trades on long-term user base expectations, we expect the stronger-than-expected three-year user guidance to propel the share price further in the near term.” Yao places his cash the place his mouth is right here, with a $200 worth goal on BILI inventory backing his Overweight (i.e., Buy) ranking, and suggesting 75% share appreciation by yr’s finish. (To watch Yao’s monitor document, click on right here.) As for Wall Street, the analysts are unanimous right here, giving Bilibili 9 latest optimistic opinions, for a Strong Buy consensus ranking. The inventory’s common worth goal of $162.89 implies a one-year upside of 42% from the present buying and selling worth of $114.44. (See Bilibili’s inventory evaluation at TipRanks.) Daqo New Energy (DQ) Sticking with China, we’ll shift our focus to the renewable vitality sector. China is the world’s largest producer of solar energy, with greater than 250 gigawatts put in. This is due largely to a governmental push towards renewable vitality within the state-owned vitality sector. Daqo vitality is a US$6.Three billion producer of monocrystalline silicone and polysilicon (mono-Si and poly-Si), that are used within the manufacturing of photo voltaic panels. The firm’s manufacturing relies in Xinjiang province. Daqo, in March of this yr, introduced a significant provide settlement with Gaojing, a newcomer to China’s photo voltaic sector that produces superior photo voltaic wafers for energy programs. Daqo will provide high-purity polysilicon for use in Gaojing’s growth to a 50 gigawatt manufacturing capability. Gaojing will make a partial fee up entrance, with additional funds negotiated in keeping with market situations. That settlement comes after Daqo introduced a gross revenue of $109.5 million within the fourth quarter of 2020, up 141% from Q3’s $45.Three million. Gross margins additionally rose, from 36% to 44%. Per share, earnings hit $1.01, in comparison with 29 cents in each Q3 and the prior yr’s This autumn. At the highest line, revenues grew 107% year-over-year, from $119.5 million to $248.5 million. Production quantity expanded from 4Q19 to 4Q20 from 18,406 MT to 21,008 MT. This is the background to DQ’s share appreciation over the previous six months. Despite slipping from its February peak, the inventory exhibits a six-month acquire of 139%, in comparison with the S&P 500’s 28% rise over the identical interval. JPM Analyst Alan Hon anticipates additional progress and not too long ago wrote, “We expect strong 1Q21 earnings to trigger upward consensus revisions, a positive catalyst. We lift our earnings estimates by ~18%, factoring in the strong poly px trend observed… We estimate that DQ will register earnings growth of ~170% in its 1Q21 results, due to be released in May. We think the event will trigger upward consensus earnings revisions.” Accordingly, Hon charges Daqo as Overweight (a Buy), with a $133 worth goal indicating potential for 62% upside within the yr forward. (To watch Hon’s monitor document, click on right here.) Daqo has attracted some curiosity from Wall Street’s inventory watchers, with Three out of Four latest opinions coming in optimistic – and giving the inventory a Strong Buy ranking from the analyst consensus. Shares are priced at $85.72 and their $117.68 common worth goal suggests a one-year upside of 41%. (See Daqo’s inventory evaluation at TipRanks.) Peloton Interactive (PTON) For the final inventory on our listing as we speak, we’ll come again to the US and check out a trendsetter. Peloton has introduced on-line interplay to the world of stationary bikes – and different train gear, efficiently advertising and marketing to upscale clients. The on-line connectivity is the corporate’s massive promote, providing customers the power to participate in interactive train lessons on-line in actual time. Looking again at the latest quarterly report, for 2Q fiscal 2021, Peloton confirmed revenues of $1.06 billion, the primary time the corporate’s high line breached the $1 billion determine. EPS in 2Q21 was 18 cents per share, up from the 19-cent loss posted within the prior yr’s second quarter. Peloton’s total success has been marred in latest weeks by a severe setback – the Consumer Product Safety Commission has been investigating the corporate concerning questions of safety. Specifically, the CPSC has issued warnings about Peloton’s Tread+ treadmill, which has been concerned in 39 reported accidents – involving kids, and together with one loss of life. Peloton has argued for the security of its merchandise, however some harm has been executed – from the inventory’s peak in January of this yr, PTON shares are down by 38%. We’ll get an concept on May 6 how the fallout from this can be impacting gross sales and earnings; that’s when the corporate studies its outcomes for Q3 fiscal 2021. Writing from JPM, 5-star analyst Doug Anmuth takes a fair keel on the security considerations. Anmuth notes that the corporate is taking steps to reinforce customers’ security, and goes on to say, “We like PTON shares at current levels & would be buyers of any pullback related to the CPSC warning & related headlines. We continue to believe that consensus estimates for CF Sub net adds are low in 2HFY21 & FY22. In coming months we expect PTON to benefit from: 1) significant ramp in manufacturing capacity, up 6x from a year ago; 2) easing of LA port delays; 3) resumption of normalized marketing & advertising activity; 4) still strong Bike/Bike+ demand, against manageable comps; & 5) launch of the new lower-priced Tread in the US, with initial deliveries in the June qtr/4QFY21 & bigger impact in September/1QFY22 & through FY22.” The analyst charges PTON as Overweight (Buy), and his $200 worth goal signifies confidence in a 102% upside within the yr forward. (To watch Anmuth’s monitor document, click on right here.) Peloton’s reputation – or a minimum of, its trendiness – might be seen by the sheer variety of opinions on document for the inventory. No fewer than 24 Wall Street analysts have chimed in right here, and the suggestions break right down to 19 Buys, 4 Holds, and 1 Sell, for a Strong Buy consensus ranking. The inventory is buying and selling at $99 and has a $158.52 common worth goal, suggesting an upside of 60% from present ranges. (See Peloton’s inventory evaluation at TipRanks.) To discover good concepts for shares buying and selling at engaging valuations, go to TipRanks’ Best Stocks to Buy, a newly launched instrument that unites all of TipRanks’ fairness insights. Disclaimer: The opinions expressed on this article are solely these of the featured analysts. The content material is meant for use for informational functions solely. It is essential to do your personal evaluation earlier than making any funding.
