There has been a lot of pessimism about the economy in recent months, with predictions of an upcoming recession. The markets were also a bit shaky in August, with… Standard & Poor’s 500 down about 3%.
But in a note from JPMorgan, Madison Faller, a global investment strategist, maintains a generally positive outlook and reassures investors that market volatility is even on track.
“In any year, there are good things and bad things that affect the economy and the markets,” Waller said. “While we tend to see the glass as half full when examining the current list of opportunities and risks, we also remember that volatility is normal.”
The mistake many investors make during such times of market downturns is a common one. “Investors tend to sell on dips and miss the recovery – indeed, the cash inflows and exits from equities have made sense this year,” Waller explained, before paraphrasing classic investment advice. “But when investors are scared, that’s often the time to pounce.”
Taking this advice and working it out, JPMorgan analysts have targeted two stocks that they think are poised to deliver the goods over the coming months – and see them post gains of up to 110%. We put these names through TipRanks database To also find out what other Street Analysts are doing about their chances. Here’s the lowdown.
Telephone and data systems (dissolved solids)
JPM’s first pick that we’re looking at is Telephone & Data Systems, a leading provider of communications services to nearly 6 million customers across the United States. The company offers a range of services, including wireless mobile phone plans, television packages, landline phones, high-speed Internet, and IT solutions. These IT solutions include everything from cloud services and hosting services to on-premises connectivity and data centers.
The US telecoms sector was dealt a blow earlier this summer, when news broke that much of the ‘old’ cable infrastructure, particularly in the telephone sector, had originally been covered in lead. Such leaded cables have long since been phased out in new projects, due to environmental concerns, and there is a public outcry for the removal of old cable sheaths – a process that would be costly for landline providers. TDS Telecommunication, the telephone company of TDS, announced in July that it had less than 10 miles of such cables in its network.
In a more recent development, TDS shares have skyrocketed this month, doubling in value. The rise came after TDS announced that it was actively exploring “strategic alternatives” to US Cellular, a company in which TDS owns an 83% stake.
On the other hand, TDS recently released second quarter results were more subdued. Total revenue, at $1.27 billion, fell nearly 6% year-over-year and came in $28.15 million short of expectations. Underlying earnings per share, a loss of 17 cents per share, was 15 cents per share lower than expected.
Although the company missed the bottom line, it did report earnings for the upcoming third quarter. The payment of 18.5 cents per common share is scheduled for September 29; The annual rate of 74 cents gives a yield of 4%.
While highlighting the disappointing reading, JPMorgan analyst Philip Cusick shows that restructuring the business could be an excellent move – especially for investors.
“Second-quarter results weren’t generally impressive and the company lowered its USM revenue guidance for 2023. Although the company’s performance is good, the costs of increasing total additions to USM and customer retention are clearly uneconomic, so selling the company seems like the move. right.” Exploring strategic alternatives is likely to unlock significant value. For TDS, the company’s approximately 83% stake in US Cellular represents approximately 80% of its enterprise value. The additional value from the potential sale of USM supports the higher valuation of TDS shareholders.
Looking ahead, Cusick rates TDS as Overweight (i.e. Buy) while the $38 price target indicates a strong 1-year upside potential of approximately 110%. (To view Cusick’s track record, click here)
TDS has slipped under the radar a bit, and has only had two recent analyst reviews. However, both agree that it is a stock to buy, making the analyst consensus a Moderate Buy consensus. The shares are selling for $17.90 and their average target of $27 suggests room for around 51% upside over the next 12 months. (be seen TDS Stock Outlook)
Helifax Corporation (head)
The next step is HilleVax, a clinical-stage biopharmaceutical company that specializes in developing new vaccines to prevent norovirus. Norovirus is a common and highly contagious virus, and is the most common viral cause of acute gastroenteritis in the world. In short, this is the “stomach germ”, responsible for vomiting, diarrhea and digestive pain. Viral illness usually lasts one to three days.
While this is not on the same scale as Ebola, the norovirus still imposes a cost on human society. Norovirus is responsible for more than 90% of non-bacterial gastroenteritis epidemics worldwide, causing more than 700 million cases worldwide each year. Although not usually fatal, the sheer numbers involved mean that around 200,000 people die from norovirus each year. The virus causes economic costs of about $60 billion annually.
This is what HilleVax is up against. The company is working on preventive treatments and vaccines for the virus. It’s leading drug candidate, HIL-214 is a virus-like particle (VLP)-based vaccine currently undergoing several clinical trials – in infants, children, adults and the elderly.
In its latest company business update, Q2 2013, HilleVax announced that it has completed enrollment in the NEST-IN1 trial, a Phase 2b study of the infant vaccine. There are now more than 3,000 subjects enrolled in the study, across six countries. The company expects to release key safety and efficacy data from this clinical trial in the middle of next year.
The drug’s potential has made JPMorgan’s Eric Joseph bullish on HLVX stock. The analyst writes about the company, its program, and its quality for investors, “Acute gastroenteritis caused by norovirus infection is a significant global health economic burden, concentrated among young children and the elderly, for whom there are no approved or effective direct vaccines.” treatments. With a forecast of approximately $1.8 billion TAM (approximately $650 million in the US) in the infant setting, we view HilleVax’s HIL-214 as a materially compromised vaccine candidate in preventing talking norovirus, whose commercial potential is not well reflected. Sufficient at current levels. Phase 2b data (mid-2024) is seen as the underlying value of stocks over the foreseeable horizon.
These comments support Joseph’s Overweight (ie Buy) rating, while the $22 price target suggests upside potential of around 69% over the next year. (To view Joseph’s record, click here)
Overall, these vitals have a Strong Buy from the Analyst Consensus, based on the 4 unanimously positive reviews on file. The shares are trading for $13 and the average price target of $31.25 is even more bullish than Joseph would allow, which means a solid gain of ~141% awaits next year. (be seen HLVX Stock Forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured 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.