TipRanks
Goldman Sachs is betting on these 3 stocks; Sees over 50% upside potential
What goes up has to come down, as we all know. This fact of physics is the underlying concern of the stock market that fuels our suspicions of bubbles. However, investment firm Goldman Sachs doesn’t think we should be concerned. The company’s chief global equity strategist Peter Oppenheimer gives several reasons to expect the current market uptrend to be real. Its key points include the equity risk premium, the real profits made by the big tech giants, and the high savings rate of US households that emerged from the COVID pandemic. Oppenheimer takes note of each of these points and notes that higher risk stocks offer a premium in today’s regime of record low interest rates. That said, their potential returns are far higher than safe bonds and justify the added risk factor. On the second point: The giants of the technology industry represent a massive concentration of capital and assets in just a few companies (Facebook, Apple, Amazon, Microsoft and Google). However, these companies built that concentration through strong fundamentals and real earnings growth rather than bubble inflation. Finally, the decline in macroeconomic activity during the pandemic in terms of savings has resulted in US households having around $ 1.5 trillion in accumulated savings that can be used to invest in retail stocks. The professionals at Goldman Sachs take Oppenheimer’s outlook and translate it into concrete recommendations. You give three stocks a thumbs up. In particular, the company’s analysts each see an upside potential of over 50%. We looked up these stock views in the TipRanks database to see if Wall Street was okay with Goldman’s view. SpringWorks Therapeutics (SWTX) The first Goldman selection we’ll look at is a clinical-stage biotech company in the oncology niche. SpringWorks uses a precision medicine approach to developing and commercializing medical treatments for patient populations suffering from severe cancer and rare diseases. The company has an active pipeline of drug candidate screening programs for the treatment of desmoid tumors, plexiform neurofibromas, multiple myeloma, and metastatic solid tumors. The first two programs are the most advanced. Nirogacestat, the drug for testing against desmoid tumors, is in a phase 3 study and has received orphan drug designation and fast track designation from the FDA. The drug candidate works through two therapeutic mechanisms and has shown promise against multiple myeloma. Clinical studies on nirogacestat are ongoing for several additional indications. Mirdametinib, the company’s most advanced drug candidate, is in a Phase 2b trial for the treatment of inoperable plexiform neurofibromas (NF1-PN). This is a rare cancer of the nervous system that affects the peripheral nerve sheaths and causes severe pain and disfigurement. NF1-PN can affect both children and adults, and mirdametinib is being studied to treat both populations. As with Nirogacestat, the FDA has given this program orphan drug and fast track names. The study is currently 70% enrolled and early data are labeled “encouraging”. A large and active research program will always attract the attention of Wall Street biotech experts, and Goldman analyst Corinne Jenkins has identified several impending catalysts for SprinWorks: “1) DeFi topline data in desmoid tumors (2H21), 2) mirdametinib + Lifirafenib combination data (2021), 3) BGB-3245 first-in-human data (2021), 4) DREAMM-5 update for MM (2H21) and 5) detailed interim clinical results from ReNeu (2021). “Building on this, the analyst sees a strong return potential for the company. “[We] Look at the commercial outlook for SWTX’s rare oncology programs due to increased length of therapy, but consider the clinical outcomes expected this year to be well understood and therefore unlikely to significantly increase stock performance. We are summarizing the set of upcoming catalysts in a scenario analysis that supports our view of attractive risk / reward for the stock over the 2021 balance, ”said Jenkins. So it’s no wonder Jenkins is a fan. Jenkins gives SWTX a buy, and their one-year price target of $ 112 implies an uptrend of ~ 66% from current levels. Goldman Sachs is hardly the only company impressed with SpringWorks. The company’s stock has 4 buy ratings for a unanimous Strong Buy consensus rating. The stock is trading at $ 67.28, and the average target price of $ 110 suggests upside potential of 63.5% for the months ahead. (See SWTX stock analysis on TipRanks.) Targa Resources Corporation (TRGP) We’re now going to switch gears and take a look at one of the midstream companies in the energy sector. Midstreamers are the companies that move the hydrocarbons from wellheads to markets. By dividing production and transportation, companies can streamline their operations. Targa operates a network of midstream assets in North America, primarily in Oklahoma-New Mexico-Texas-Louisiana. Assets include natural gas and crude oil pipelines, with operations divided into two segments: collection and processing, and logistics and transportation. Business in Targa increased last year. TRGP achieved Adj EBITDA of $ 438 million in the fourth quarter of 20, slightly above the Street Median estimate of $ 433 million. Adjusted EBITDA for the full year of $ 1.637 billion was above the benchmark of $ 1.5 billion to $ 1.625 billion. Looking to the future, TRGP expects 2021 adj. EBITDA of $ 1.675 billion to $ 1.775 billion, or 5% year-over-year growth in the middle, which compares favorably to Street median estimates of $ 1.698 billion / $ 1.684 billion. Targa shares have risen. The stock is up an impressive 375% over the past 12 months, and Goldman Sachs analyst John Mackay sees more upside on the cards. Mackay gives TRGP a buy rating along with a price target of $ 49, indicating an upward trend of 51% for a year. (To see Mackay’s track record, click here.) “Our thesis for TRGP, in a nutshell, is that the strategic assets of Permian and Downstream NGL support above-consensus EBITDA (GSe ~ 7% averaged higher than Eikon for 2022) +), which could enable greater – and earlier than expected – incremental returns on capital – all supported by a valuation that remains relatively cheap…. [As] As the year progresses, we expect the focus to shift to the big upcoming capital allocation catalyst which (we expect) will materialize in early 2022 once TRGP completes its planned DevCo consolidations, ”wrote Mackay. There is broad consensus on Wall Street that Targa is buying an offer. Of the last 15 reviews, 13 are available for purchase against only 2 holds. The average target price of USD 38.27 indicates an upside potential of 18% compared to the current trading price of USD 32.45. (See TRGP stock analysis on TipRanks.) ADT, Inc. (ADT) For the last stock on the Goldman list, we’re switching again, this time to home security. ADT offers a range of security services that focus on alarm monitoring. Services include intrusion and fire alarms, packages with round-the-clock surveillance, motion detectors, smoke and carbon monoxide detectors, and “smart home” modifications. ADT’s services are available in the residential and commercial markets. The company’s revenue stream remained stable over the past year, ranging from $ 1.3 billion to $ 1.37 billion. The result for each quarter was unchanged or slightly higher year-on-year. Sales for the full year increased by 4% compared to 2019. The company’s net loss declined over the year, and its fourth quarter net loss of 14 cents was the lowest of the year. The bulls include Goldman Sachs analyst George Tong, who writes, “We believe ADT is well positioned to capitalize on new growth opportunities, including strong home building trends and increasing demand for smart homes as it increases its customer acquisition costs offensively increased by 150 USD. 250 million this year. With these investments, management plans to see accelerated growth in recurring monthly revenue growth in mid-teens in 2021. We assume that with these additional expenses, ADT will increase the penetration of the fast-growing smart home category in the longer term … “The Goldman analyst sets 13 US dollars The price target for this stock corresponds to his buy recommendation, which is for the next 12 Months means an upward trend of 58%. (To see Tong’s track record, click here.) Tong is optimistic about ADT, but there are a number of opinions on Wall Street. ADT has a moderate buy rating based on a 3-1-1 split between buy, hold, and sell ratings. The current stock price is $ 8.21, and the average target price of $ 10.55 indicates an upward movement of ~ 28.5% from that level. (See ADT stock analysis on TipRanks.) To find great ideas for trading stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.
Source link
This article originally appeared on finance.yahoo.com
