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JPMorgan says these two stocks could rise more than 80%
After a volatile first quarter, Q2 kicked off in style, with major indices sitting on – or hovering near – everyday highs. The government bond market is also stable as yields fell after rising higher earlier in the year, and investors fear inflation could get out of hand. Moreover, the economic recovery appears to be accelerating at a faster pace than expected. “We expected the data to improve around this time, and earlier signs are that the recovery is absolutely underway,” said Hugh Gimber, JP Morgan’s global market strategist. “This is the period when the prediction of a strong recovery in growth is starting to look more like the fact that a strong recovery in growth will begin.” Against this background, the analysts of JP Morgan have identified two names that, according to them, suggest strong growth in the coming year; both are expected to reward investors well with at least 80% of profits in the coming months. We led them through the TipRanks database to see what other Wall Street analysts have to say about it. Tencent Music Entertainment (TME) We start in China, where Tencent Music Entertainment is the offspring of China’s giant online business, Tencent, and Spotify, the Swedish streaming company that makes music and playlists easy. Tencent Music has consistently achieved strong sales and earnings over the past year, with the top line growing year-on-year in each quarter of 2020. The Q4 report showed $ 1.26 billion in the top line, the highest in the last two years, along with 12 cents per share in earnings, an increase of 33% year-on-year. Strong power revenues, which showed 29% growth, helped boost the results. Tencent Music is the best music streaming service in the Chinese online market due to its variety of applications – as evidenced by the 40.4% increase in paid subscribers during the fourth quarter. In its quarterly results, the company reported 4.3 million net new users in the fourth quarter to reach 56 million active premium accounts in its programs. That said, the stock has been declining sharply recently, as like many other growing growth names, concerns about an overheated valuation have come to the fore strongly. But withdrawals often offer a chance, and Alex Yao, who covers the stake for JPM, notes the strong growth in the subscription, as well as the potential in the company’s other businesses, online advertising and long-form audio, for monetization. “We believe that TME is entering a healthy development cycle with successive growth engines: 1) music subscription remains the most important revenue with a constant improvement in the pay ratio, 2) advertising revenue is rising rapidly and 3) active investments in long-form audio initiative, which 2022 and beyond can become a new growth trader, “Yao noted. Therefore, Yao sets a price target of $ 36 on TME, which indicates that it is a one-year lead of 84%, around its overweight (ie buy) rating on the (To view Yao’s record, click here.) Overall, TME has an inch up from Wall Street. Of the 11 reviews recorded, 7 are for sale, 3 for hold and 1 says Sell, which buys the analyst’s consensus a moderate, the shares cost $ 19.50 and their average price target of $ 30.19 implies a 55% increase for the coming months (see TME stock analysis on TipRanks) Y-mAbs Therapeutics (YMAB) The next JPM choice we are looking for is Y-mAbs, a clinical biopha late-stage rma enterprise focusing on pediatric oncology. The company is working on the development and commercialization of new antibody-based cancer therapies. Y-mAbs has one medication – Danyelza – approved for the treatment of neuroblastoma in children 1 year and older, and a ‘broad and advanced’ pipeline of drug candidates at different stages of the clinical process, as well as five additional pre-clinical products research phases. Having an approved drug is a ‘holy grail’ for clinical biopharmaceutical companies, and in 4Q20, Y-mAbs earned significant revenue from Danyelza. The company announced in late December that it had agreed to sell the Priority Review Voucher for the drug for $ 105 million to United Therapeutics. Y-mAbs retains the rights to 60% of the net proceeds from the sale, under an agreement with Memorial Sloan Kettering. The company also announced a licensing agreement with SciClone in December. The partnership offers Y-mAbs and Danyelza an opening for the treatment of pediatric patients in China. The deal includes China, Taiwan, Hong Kong and Macau, and is worth up to $ 120 million for Y-mAbs. The company has entered into other agreements to make Danyelza available in Eastern Europe and Russia. Danyelza is a Y-mAbs flagship product, but the company also has omburtamab in advanced stages of the pipeline. This drug candidate experienced a setback in October last year, when the FDA refused to submit the company’s application for biological licenses, which was proposed for the treatment of pediatric patients with CNS / leptomeningeal metastasis. Y-mAbs has been with the FDA ever since, with a new target date for the BLA at the end of 2Q21 or early in 3Q21. These two remedies – one approved and one not yet – form the basis of the JPM outlook on this stock. The analyst, Tessa Romero, writes: ‘Our dissertation deals with the harmless nature of the pediatric oncological pipeline. Our recent COPD feedback is enthusiastic about the use of lead asset Danyelza in patients with high-risk neuroblastoma (NB). For omburtamab of the second precursor in NB metastatic for central nervous system (CNS / LM of NB), while the ‘refuse to lie’ last year and the subsequent delays in the regulations were certainly disappointing, we still see a high probability of product approval in the 2Q / 3Q22 timeframe … ”Romero foresees an optimistic outlook for the company:“ Due to our expectation of a healthy launch for Danyelza, with the regulatory / clinical momentum set in the near to mid-term, we see stocks ready to recover and see an attractive buying opportunity at current levels. ”The analyst sets a price target of $ 52 on YMAB shares, implying an 86% increase for the coming year and supports an overweight (ie buy) rating. (To view Romero’s record, click here. In general, Wall Street ratings are set 3 to 1 in favor of Buys versus Holds on Y-mAbs, which share gives a strong buy consensus rating. The stock has an average price target of $ 61.25, indicating an upward potential of 121% this year. (See YMAB stock analysis on TipRanks.) To find great ideas for stocks trading at attractive valuations, visit TipRanks ‘best-selling stocks, a newly launched tool that combines all the insights of TipRanks’ stocks. Disclaimer: The opinions expressed in this article are solely those of the proposed analysts. The content is for informational purposes only. It is very important to do your own analysis before investing.