Less than 2 weeks into the caller year, the cardinal question is coming clear: should we bargain the dip? The markets are swooning a bit, truthful acold successful January. Both the S&P 500 and the NASDAQ are registering losses successful 2022’s cumulative trading sessions – 2% connected the S&P, and 4.5% connected the NASDAQ.
A operation of headwinds and tailwinds are pushing connected equities. The erstwhile see the Omicron question of COVID-19, arsenic good arsenic ongoing disruptions successful the proviso chains and labour markets. On the affirmative side, Omicron is looking some little unsafe and much contagious, starring to the anticipation of wide earthy immunity with little death, and marking an extremity successful show for the pandemic. And, the Federal Reserve is signaling that it volition statesman raising involvement rates aboriginal this year. That determination promises to enactment damper connected rising ostentation rates, with semipermanent benefits.
Overall, determination is country for optimism, arsenic pointed retired by JPMorgan’s planetary markets strategist Marko Kolanovic: “We judge determination is further upside for stocks and the dip driven by the Omicron scare should beryllium bought into. The caller variant is proving to beryllium milder, and the adverse interaction connected mobility overmuch much manageable.”
Turning to the wide economical situation, Kolanovic adds, “Inventories are precise debased and the labour marketplace is staying strong. We proceed to spot gains for earnings, and judge that statement projections for 2022 volition again beryllium excessively low.”
With this successful mind, we wanted to instrumentality a person look astatine 2 stocks that received JPMorgan's stamp of approval, with the steadfast projecting upside imaginable of much than 80% for each. Using TipRanks’ database, we recovered retired that the remainder of the Street is besides connected committee arsenic some person earned a “Strong Buy” statement rating.
Driven Brands Holdings (DRVN)
We’ll commencement with Driven Brands, North America’s largest automotive services company. Driven Brands is simply a holding company, operating a wide scope of car work locations done its subsidiaries. The services are offered successful 4 divisions, including Maintenance; Paint, Collision, & Glass; Platform Services; and Carwash. Brands see well-known names specified arsenic Meineke, Take 5 Oil Change, Maaco, and Automotive Training Institute. There are implicit 4,200 marque locations, astir owned and operated connected a franchise basis.
Driven held its IPO successful January of past year, and raised implicit $650 cardinal successful nett proceeds from the offering. The company’s banal has been volatile implicit the past year, but remains good supra the archetypal pricing of $22.
Since the IPO, Driven has released 4 quarterly fiscal reports. Revenues roseate done the summer; the Q3 result, of $371 million, was up 39% year-over-year, and same-store income roseate 12.8%. Adjusted net came successful positive, astatine 26 cents per share, up by 30% yoy. The institution added 53 stores during the 3rd quarter.
This maturation comes hand-in-hand with the economical reopening. As radical get retired and determination around, they thrust – and that means their cars volition request attraction and accessories. The company’s maturation continued aft Q3; since that quarterly release, the institution has announced expansions successful its carwash and car solid segments. The institution successful November acquired its 100th car lavation since August 2020, and present boasts implicit 300 car lavation locations, portion earlier this period Driven announced its acquisition of Auto Glass Now, with 75 locations successful the car solid repair segment.
JPMorgan's 5-star expert Christopher Horvers is bullish connected DRVN for this year, penning of the stock: “We proceed to spot DRVN arsenic 1 of the astir differentiated stories successful our coverage... DRVN checks galore boxes successful 2022 given: (1) supportive betterment dynamics (i.e., miles driven inactive beneath 2019 with congestion miles lagging), (2) pricing powerfulness mostly offsetting outgo ostentation (labor and goods), (3) less competitors post-COVID, (4) worldly upside bias to estimates, (5) imaginable for structural valuation re-rating, and (6) a wide antiaircraft bias emphasizing perceived plus quality."
In enactment with his optimistic approach, Horvers gives DRVN shares an Overweight (i.e. Buy) standing and his $15 terms people suggests an awesome ~83% imaginable upside for the coming year. (To ticker Horvers’ way record, click here)
Overall, determination are presently 4 expert reviews of Driven Brands connected record, and they each agree: this is simply a banal to Buy. This makes the Strong Buy statement standing unanimous. DRVN shares are selling for $30.54, and their $45 mean terms people implies they person a one-year upside imaginable of ~47%. (See DRVN banal investigation connected TipRanks)
Edgewise Therapeutics (EWTX)
The 2nd banal we’ll look astatine is Edgewise Therapeutics, a objective signifier biopharma institution with a absorption connected the attraction of musculoskeletal diseases. The institution is processing orally dosed, tiny molecule caller therapies for uncommon musculus disorders with severe, debilitating effects. Targeted disorders see Duchenne and Becker muscular dystrophy (DMD and BMD), spasticity disorders, and neuromuscular metabolic disorders.
Most of Edgewise’s probe tracks are inactive successful preclinical testing, but the DMD/BMD programme has reached Phase 1 objective trials. Topline results from EDG-5506, a cause campaigner successful the musculus stabilizer class, were released earlier this month, and showed that the cause campaigner was good tolerated successful patients, with nary adverse events occurring. The cause besides showed important achievement, beyond predicted levels, of musculus concentrations and reduced musculus harm biomarkers successful big BMD patients aft 2 weeks of dosing. These are important affirmative results for a first-in-human objective trial, and warrant further trials with EDG-5506.
JPMorgan's Tessa Romero describes the objective proceedings information arsenic a ‘win,’ noting: "In our view, cardinal aspects that made the update a wide occurrence include: 1) important and time-dependent lowering of cardinal musculus harm biomarkers; 2) favorable PK accordant with robust people engagement (e.g., achieving exposures exceeding pharmacologically progressive levels seen successful diseased pre-clinical models, successful some the plasma/muscle); and 3) noun expected safety/tolerability concerns."
"With archetypal proof-of-concept (POC) information with EDG-5506 aided by some biologic and functional markers of effect successful hand, we spot the imaginable for important worth instauration implicit clip connected the imaginable of EDG-5506 alone, with a important level to travel down it," Romero summed up.
In enactment with these comments, Romero lists Edgewise arsenic a “top idea” for 2022. The JPMorgan expert rates the banal an Overweight (i.e. Buy) on with a $33 terms target. Should the people beryllium met, a twelve-month summation successful the signifier of an 82% could beryllium successful store. (To ticker Romero’s way record, click here)
All successful all, Edgewise has a Strong Buy statement rating, based connected 3 expert reviews fixed recently. The shares are trading for $18.10 and person an mean terms people of $32, implying an upside implicit the adjacent 12 months of ~77%. (See EWTX banal investigation connected TipRanks)
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Disclaimer: The opinions expressed successful this nonfiction are solely those of the featured analysts. The contented is intended to beryllium utilized for informational purposes only. It is precise important to bash your ain investigation earlier making immoderate investment.
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