J.P. Morgan Says There’s Room for Over 40% Upside in These 2 Shares


Caught for recent investing inspiration? You’re not alone. Loads of uncertainty lingers on Wall Avenue as we head into 2022. Inflation is up, the job market stays caught in an unpleasant mixture of cussed unemployment and record-high ranges of job openings, all whereas Congress and the Biden Administration are trying much less and fewer able to passing a set of aggressive spending plans.

Writing from JPMorgan, international market strategist Marko Kolanovic acknowledges the headwinds however thinks there are highly effective counter forces appearing to help the market, and people will outweigh the negatives heading into subsequent yr.

“Whereas the inflation drive is more likely to persist, we see stagflation as unlikely and word there are a number of highly effective offsets to any potential drag on the patron from larger vitality costs. Traditionally, fairness markets did nicely in durations of oil value will increase, particularly these durations that adopted a disaster,” Kolanovic famous.

JPM’s inventory analysts are following their agency’s strategic lead, and in search of the shares which might be poised to make beneficial properties within the coming months. Specifically, they’ve discovered two with over 40% upside potential, and are within the means of turning round proper now. After utilizing TipRanks’ database, we came upon that every ticker has additionally acquired sufficient help from different Wall Avenue analysts to earn a “Robust Purchase” consensus score.

Protagonist Therapeutics (PTGX)

We’ll begin with Protagonist Therapeutics. This clinical-stage biopharma firm is creating new peptide-based medicines by way of a proprietary platform. The brand new drug candidates created are particularly designed to behave on key organic targets and chemical pathways. The corporate has, up to now, developed 5 new compounds for its analysis pipeline.

Protagonist’s two main peptide-based drug candidates, rusfertide (or PTG-300) and PN-943, are at the moment in scientific trials as therapies for polycythemia vera (PV) and hereditary hemochromatosis (HH) – two severe blood situations, and the inflammatory autoimmune situation ulcerative colitis.

Rusfertide is the extra superior of the 2 applications. The corporate has already reported constructive Part 2 knowledge in Europe on the drug as a remedy for PV, and has been granted the FDA’s Breakthrough Remedy Designation for this indication. In September, the FDA positioned a scientific maintain on trials of rusfertide, however that maintain was lifted this previous week after the corporate launched up to date security outcomes. Protagonist studies that it stays ‘on observe’ to provoke rusfertide’s Part 3 research within the remedy of PV early subsequent yr. In the meantime, preliminary knowledge from the Part 2 proof-of-concept research of rusfertide as a remedy for HH is prepared for launch, and can be revealed subsequent month at a digital convention hosted by the American Affiliation for the Examine of Liver Illnesses.

Turning to the ulcerative colitis observe, Protagonist is investigating PN-943. The drug candidate is at the moment present process a proof-of-concept research, a 150-patient Part 2 trial that’s anticipated to succeed in completion in 2Q22.

Protecting Protagonist for JPMorgan, analyst Anupam Rama sees the current Maintain/No Maintain as the important thing issue within the inventory.

“The fast decision of the scientific maintain in ~3 weeks comes as a shock to us from a timeline perspective and the online impact doesn’t seem materials to us. Importantly, the replace removes a key overhang on PTGX shares heading into necessary scientific readouts over the following ~12 months.… shares haven’t returned to pre-clinical maintain ranges, leaving upside on likelihood adjusted polycythemia vera indication alone (part 3 trial can be initiated in 1Q22). Importantly, with the scientific maintain now lifted, we anticipate extra give attention to near-term catalysts – part 2 knowledge for rusfertide in hereditary hemochromatosis (HH) at AASLD in November and part 2 PN-943 ulcerative colitis knowledge in 2Q22,” Rama opined.

In Rama’s view, PTGX deserves an improve, and he raised his score from Impartial (i.e. Maintain) to Chubby (i.e. Purchase). His new value goal of $55 implies an upside of 73% for the following 12 months. (To look at Rama’s observe document, click on right here)

General, this biotech will get a unanimous Robust Purchase score from the analyst consensus, with 7 constructive opinions set up to now week. The inventory has a median value goal of $58.29 and a buying and selling value of $31.8, giving it a one-year upside potential of ~83%. (See PTGX inventory evaluation on TipRanks)

Oatly Group (OTLY)

For the second inventory, let’s shift gears and transfer from biotech to meals tech. Oatly is a Swedish-based firm that produces oat-based dairy product alternate options. The corporate affords a spread of flavored milk substitutes, in addition to non-dairy ice lotions, yogurts, lotions, and low drinks. The model’s largest market is in Europe – primarily Sweden, Germany, and Britain – with its second largest market in China adopted by the US. All US Oatly merchandise are gluten-free, though this isn’t so in Europe and Asia.

Oatly is new to the general public buying and selling markets, having gone public by way of an IPO earlier this yr. The occasion noticed the OTLY ticker begin buying and selling on the NASDAQ on Might 19, when the corporate bought over 84.3 million American depositary shares. The preliminary value of $17 per ADS was on the high of the pre-sale vary, and Oatly raised $1.4 billion within the IPO.

This previous summer season, in August, Oatly launched its first quarterly fiscal report as a publicly traded entity, for 2Q21. The corporate reported high line income of $146 million, up greater than 53% from the year-ago quarter. In accordance with administration, the months of June and July this yr noticed the corporate’s highest ever consecutive month-to-month manufacturing totals. Wanting ahead, administration expects that revenues for the complete yr 2021 will are available in above $690 million.

Even with that, nonetheless, Oatly inventory dropped sharply because it peaked in mid-June, dropping nearly half of its worth. But, JPMorgan’s Ken Goldman sees the present low share value as an opportunity to purchase in.

“With the inventory -49% from its 6/11/21 peak (median meals -7%), we now view the upside potential as far better than the draw back danger… On the constructive facet, we like (1) the expansion of plant-based dairy basically, (2) the potential for oat milk to proceed taking share from almond and different varieties, and (3) Oatly’s positioning and model fairness throughout the class. We mannequin very robust top-line progress for the corporate for the foreseeable future,” the 5-star analyst wrote.

Becoming a member of the bulls, Goldman has upgraded his stance on OTLY from Impartial (i.e. Maintain) to Chubby (i.e. Purchase). His $21 signifies ~47% upside potential for the approaching yr. (To look at Goldman’s observe document, click on right here)

With 10 opinions on document within the final three months, breaking down 8 to 2 in favor of Purchase over Maintain, Oatly will get a Robust Purchase consensus score. The common value goal of $25.22 implies a 76% enhance from the present share value of $14.33. (See OTLY inventory evaluation on TipRanks)

To seek out good concepts for shares buying and selling at engaging valuations, go to TipRanks’ Finest Shares to Purchase, a newly launched software 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 extremely necessary to do your personal evaluation earlier than making any funding.

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