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JP Morgan: 2 sets to consider when making a purchase (and 1 to stay away from
JPMorgan Marko Kolanovic sees plenty of reasons for optimism about current market conditions – and strategic visions. Kolanovic sees the risk easing in recent weeks and, given normal daily fluctuations, markets are likely to rally on a lasting basis. The biggest news Kolanovic said is the positive news about the rapid development and immediate availability of a COVID-19 vaccine. It is a “game changer” that will allow investors to “review the recent onslaught of COVID-19 cases towards the impending end of the pandemic and the wider reopening of the economy”. In terms of market importance in a tight second. , the shared result of the national elections. Kolanovic calls Biden’s presidency, combined with the growing Republican power in the House and the majority of the Republican Senate, “the best of both worlds”. A divided government is unlikely to break down the Trump administration’s business-friendly moves, while Biden is likely to ease the trade war. The result, according to the Kolanovic team, “means less market volatility, which could create an influx of risk assets.” To this end, JPM stock analysts have been working to search for ticks and look for those that are likely to win or lose. – in the coming months. Of particular interest is the fact that TipRanks ’data was taken from two stocks that the company forecasts double-digit growth and one that JPM says should be avoided. Vroom, Inc. (VRM) Let’s start with Vroom, an online retailer of used vehicles. In addition to cars, the company also sells parts and accessories and offers insurance, car rental and purchase financing only to U.S. customers. Vroom is a rookie in the markets; listing in June and rose rapidly, reaching its peak on September 1. Since then, stocks have slipped and have now fallen 22% since their first day closed. The rise and fall is the result of the pressure of the colliding tailwind and headwind on the stock. On a positive note, Vroom has gained in its overall transition to online retail. The company’s focus on used vehicles was also beneficial during the epidemic, when customers were nervous or short of cash – but in both cases they were reluctant to invest large sums for a new car. On the negative side of the general ledger, this spending reluctance has also slipped into the used car market. Vroom had to struggle with low margins while lowering prices to attract sales. By hedging JPM shares, analyst Rajat Gupta sees the current state of the stock as an opportunity for investors. He believes the bad times are temporary and this company is starting. “Net-to-net, near-term expectations have now been restored and both unit growth and gross profit could accelerate by 2021, we consider the adjustment to be favorable for the stock in the near and medium term, with few incremental negative catalysts… we believe that implementation it will be key to rely on third parties for key operational aspects such as refurbishment and logistics, ”wrote Gupta. In line with this assessment, Gupta classifies the shares as overweight (i.e., Purchase) and its $ 70 price target represents an increase of 91. % for the following year. (Click here to view Gupta’s history) Even after a decline in its stock value, Vroom will retain strong analysis from analyst consensus. The rating is based on 11 reviews, including 10 buy and 1 sell. VRM sells for $ 36.81 and its average price target of $ 59.40 suggests that there is room for ~ 61% growth over the one-year horizon. (See VRM Stock Analysis at TipRanks.) Colfax Corporation (CFX) Next is Colfax, a niche manufacturing company. Colfax manufactures a wide range of tools for the welding, medical equipment and air and gas treatment markets, from medical equipment for joint reconstruction to welding helmets and cutting torches. While it doesn’t seem appropriate, the combination works for Colfax, and the company is turning around in the second quarter due to crown crisis losses. Earnings of 41 cents per share in the third quarter showed both good and bad. It decreased by 32% year-on-year, but more than quadrupled in a row, exceeding estimates. Revenues rose 29% in a row, reaching $ 805 million. Management is expected to achieve continuous sequential improvements for the remainder of 2020 and expects full-year earnings to be projected at between 45 cents and 50 cents per share. Representing JPM, Stephen Tusa, a 5-star analyst, commented:[We] considers that the stock is relatively cheap compared to its close counterparts in Fab Tech and Med Tech Square, with significant post-COVID-19 post-development that does not appear to have fully met FY2 expectations during the assessment. CFX has strong brands and franchises … and an undervalued productivity opportunity, the primary end market has turned back in Fab Tech and demand growth in Med Tech. ”With an overweight (i.e. Buy) rating and a $ 52 price target, Tusa supports his cheerful comments with a one-year increase of 38%. (Click here to view Tusa’s history) Overall, Colfax received a moderate buy rating based on analyst consensus, based on 8 ratings, which can be divided into 5 purchases, 2 withholdings, and 1 sale. However, the majority expects shares to remain limited for the time being, as indicated by the current average price target of $ 38.63. (See CFX stock analysis at TipRanks) Beyond Meat (BYND) Last on JPM’s list of calls today is a company called Beyond Meat, which made plenty of waves last year when it raised more than $ 3.8 billion in its IPO. The company offers vegetarian-based meat substitutes and sells more nutritious, better-tasting – and more meat-like – products than competing products. The company was founded back in 2009 and expanded its product range with simulated beef, pork and chicken products. Overall, the BYND stock continues to have a positive facade. Equities rose 88% year-over-year, and the company posted a net profit in the first quarter, just at the start of the crown crisis. Since then, however, earnings have turned negative – and worse, revenues showed a sharp consecutive decline in the third quarter. The latest quarterly figures showed $ 94 million in the top row, 16% lower than in the second quarter, well below the $ 133 million forecast and showing an EPS loss of 28 cents – far worse than the forecast loss of 3 cents . Beyond Meat’s biggest hit was the downturn in the restaurant business, which was only partially offset by a 40% increase in grocery stores. The company has announced a partnership with McDonald’s to provide the meat for the fast food giant’s new McPlant menu, but even that announcement has been curbed. Shares of BYND fell sharply when news surfaced that McD’s had developed the meat substitute in-house. Although this misconception has been corrected, BYND has only partially returned. In short, this company faces serious headwinds in the short term, and JPM warns against caution because of “such low visibility and the recent quarter is surprisingly soft”. Ken Tipman, TipRanks ’5-star rating, writes of BYND:“ Now we’re trying to model a company whose (a) it’s not entirely clear why 3Q was so bad (the company’s explanation doesn’t seem to have been substantiated by meaningful data), and (b) the partnership with McDonald’s may be a game changer or a trifle. Goldman’s caution is clear from its Underweight rating (i.e. For Sale) and its $ 104 price target suggests a 26% downside. Stock. (Click here to watch Goldman’s track.) JPM isn’t the only company to warn you here. Meat analysts ’consensus rating is Moderate Sales, based on 2 buys, 7 withholdings, and 7 sales set in recent weeks. The stock price is $ 141.91 and the average price target of $ 110.71 indicates a 22% likely decline next year. (See BYND stock analysis on TipRanks.) If you want to find good ideas for trading stocks with attractive valuations, visit TipRanks Best Buyable Shares, a newly launched tool that combines all of TipRanks ’stock information. to key analysts. 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