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Goldman Sachs Predicts Up to 108% Rise for These Two ‘Strong Buy’ Stocks
Given the S&P 500With the recent rise of 5,300 exceeding some experts’ year-end targets, is it wise for investors to be concerned about a potential overheating in the market?
Goldman Sachs chief U.S. equity strategist David Kostin believes that now that the S&P has surpassed the 5,200 target he had forecast, there simply isn’t much more room at the top this year. Kostin believes the current combination of high stock valuations and low projections for GDP and earnings growth in 2024 will likely limit stock gains. “The base case is actually that the market will trade around this multiple level or actually at an even lower multiple as we get to the end of the year,” says Kostin.
But don’t panic; This does not mean that investors should abandon hope in the stock market. Despite Kostin’s flat forecast, Goldman Sachs analysts are pounding the table on two stocks, arguing they are well-positioned to deliver sizable returns next year — in one case, up to 108%.
We use the Tips classification database to take a closer look at these two Goldman picks; each has a ‘Strong Buy’ Street rating and plenty of reasons to attract investors. Here are the details.
Fulcrum Therapy (FULC)
The first stock we’ll look at is Fulcrum Therapeutics, a Goldman pick in the field of biopharmaceutical research. Fulcrum is focused on developing novel therapeutic agents for genetically defined diseases with severe symptoms and large unmet medical needs. This is a potentially rich field, as current therapies have already proven ineffective or insufficient; A company that can successfully create an effective treatment in this area will have a dramatic impact on patients’ lives.
Fulcrum’s approach is based on the underlying genetics of the disease. The company has a proprietary product development platform called FulcrumSeek and used to identify targets for drug candidates. Targets can be used to modulate gene expression, alleviating symptoms and modifying the course of the disease by treating the known causes of gene misexpression.
The company has two drug candidate programs underway that are in the clinical stage, losmapimod and pociredir. The first of these, a new compound under investigation for the treatment of facioscapulohumeral muscular dystrophy (FSHD), is the most advanced.
Losmapimod is currently the subject of the Phase 3 REACH trial, and Fulcrum reports that the drug continues to show progress. There are 260 patients enrolled in North America and Europe, and topline data is expected to be released by the end of this year. Early data from the Phase 2 ReDUX4 study showed that losmapimod demonstrated improvements in functional, structural and patient-reported outcomes.
The story continues
In another development that should be of interest to investors, Fulcrum recently entered into a collaboration and licensing agreement with Sanofi for the continued development and commercialization of losmapimod. Sanofi will pay $80 million upfront in exchange for exclusive commercialization rights outside the U.S., and Fulcrum will also receive up to $975 million in regulatory and sales-based payments and royalties going forward. The two companies also agreed to equally share the overall costs of developing the drug.
On the pociredir pathway, Fulcrum is currently conducting a Phase 1b clinical trial and has activated dosing cohorts 3 and 4. This drug is a potential treatment for hemoglobinopathies, including sickle cell disease (SCD), and the Phase 1b trial is evaluating the medicine in the treatment of FD. Each dosing cohort in this study includes 10 patients.
For Corinne Johnson, an analyst at Goldman, the key point of this company is the losmapimod development program. The drug is in an advanced stage of clinical testing and Johnson sees a lot of potential in its development. She writes: “We are confident about the 4Q24 topline data for the Ph3 REACH study of losmapimod in facioscapulohumeral muscular dystrophy (FSHD) based on multiple factors. First, losmapimod showed positive clinical data on the reachable workspace (RWS) of the primary endpoint of the Ph3 REACH study in the previous Ph2b study ReDUX4 (including the open-label extension) with a significant correlation with muscle fat infiltration (MFI) and alignment with the patient-reported outcomes (PROs). Together, these data provide a concordance of evidence of clinical benefit with the active ingredient, which we consider as risk reduction. Second, our conversations with KOLs showed support for losmapimod in FSHD with the potential for robust patient adherence of the drug following approval. Lastly, losmapimod has a significant lead in clinical development over competitors, making it a first-in-class agent in FSHD.”
This bullish long-term outlook on the flagship product leads Johnson to rate the stock a Buy, and she complements this with a $15 price target that suggests robust upside of ~108% for the next 12 months. (To watch Johnson’s track record, Click here)
Overall, it is clear that the Street agrees with the optimistic view of this issue. FULC stock bases its Strong Buy consensus rating on 9 reviews, including 8 Buys versus just 1 Sells. The stock is currently trading for $7.21, and its $17 average price target implies a one-year upside of approximately 136%. (To see FULC Stock Forecast)
Marex Group (MRX)
Next on our list is a financial services company. Marex Group is a global brokerage that provides a combination of market access, liquidity and infrastructure services to a client base in the energy, commodities and financial markets communities. The company has more than 4,000 global clients, including commodity producers and consumers, as well as asset managers and major banks. Marex operates mainly in Europe and the USA, but is expanding its activities in the Middle East and the Asia-Pacific region.
The company has five main business segments: Clearing, Agency and Execution, Market Making, Solutions and Corporate. The largest of them is Agency & Execution, which represents 46% of the company’s annual revenue. Among its other activities, this segment provides liquidity and matches buyers and sellers across various securities markets. The Clearing segment, which generates 28% of revenue, manages the company’s Future Commission Merchant business. Last year, MRX was one of the top 10 FCM companies in the US.
Marex operates from 35 offices worldwide through a group of branded subsidiary companies. Marex Group, as the parent company, entered the public trading markets through an IPO in April this year, with shares hitting the market at US$19 per share and 3.846 million shares placed on the market by the company. The IPO, which included a large portion of shares sold privately, raised approximately $292 million.
On May 16, after the dust from the IPO had settled, Marex released its financial results for 2023. The company generated $1.245 billion in revenue for the year, a 75% increase over 2022. The company’s annual profit, Before taxes, it was $197 million. .
Goldman 5-star analyst Alexander Blostein is bullish on these new shares, writing in his initiation note: “We expect MRX to deliver ~20% average EPS growth through 2026, driven by healthy volumes.” of the industry, increasing market share gains and expanding margins as the company grows. Under our assumptions, MRX is expected to see revenue growth of approximately 13% through 2026 as the company continues to gain share in markets and regions in which it did not previously compete (i.e. Prime Brokerage Services through the acquisition from Cowen, fixed income swaps clearing in LCH and APAC expansion), with additional near-term tailwinds from higher rates and volatility. As the business grows, we see operating margins of 18%/19%/20% as of 25/2024/26.”
Looking ahead, Blostein justifies an optimistic price target by noting MRX’s growth potential, saying, “At ~8X 2024 P/E, MRX is at a significant discount to the ~10X average P/E of its peers in 2024, which we think is not guaranteed given the company’s more diversified product set across products and geographies, superior revenue growth and higher ROE.”
Consequently, the analyst rates MRX shares a Buy, combined with a $33 price target, implying 61% upside potential over a one-year horizon. (To watch Blostein’s track record, Click here)
So far, all 7 Marex stock reviews are positive, making the Strong Buy consensus rating unanimous. Shares are now trading for $20.50, and the $26.29 average price target suggests MRX will gain 28% over the next year. (To see MRX Stock Forecast)
To find good ideas for stock trading at attractive valuations, visit TipRanks’ Best stocks to buya tool that brings together all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The spotlight next week will shift somewhat to the Federal Reserve’s second-quarter earnings season and monetary policy. Market watchers will be treated to results from several major names, including Dow 30 components Goldman Sachs (GS), UnitedHealth (UNH), Johnson & Johnson (JNJ) and American Express (AXP), along with streaming giant Netflix (NFLX).
The Fed will still attract some attention as investors will be eager to hear from a packed lineup of central bank speakers just before the policy meeting lockout period.
In terms of the economic calendar, after fifteen days of labor market and inflation indicators, activity data will gain momentum in the form of the latest retail sales and industrial production reports.
Earnings Highlight: Monday, July 15 – Goldman Sachs (GS) and BlackRock (Black). See the full earnings calendar.
Earnings Highlight: Tuesday, July 16 – UnitedHealth (UNH), Bank of America (BAC), Progressive (PGR), Morgan Stanley (IN), PNC Financial (PNC) and JB Hunt Transport (JBHT). See the full earnings calendar.
Earnings Highlight: Wednesday, July 17 – Johnson & Johnson (JNJ), US Bancorp (USB), Morgan Children (KMI), United Airlines (UAL) and Ally Financial (ALLY). See the full earnings calendar.
Earnings Highlight: Thursday, July 18 – Netflix (NFLX), Abbott Laboratories (ABT), Black stone (BX), Domino’s pizza (ZDP) and Taiwan Semiconductor Manufacturing (TSM). See the full earnings calendar.
Earnings Highlight: Friday, July 19 – American Express (AXP), Halliburton (THANKS) and Travelers (VRT (return to recoverable value)) See the full earnings calendar.
IPO Observation: Hospital and healthcare clinic operator Ardent Health Partners (TARDT), insurance service provider Twfg (TWFG) and the biotechnology company Lirum Therapeutics (LRTX) are expected to price their IPOs and begin trading next week. The analyst quiet period ends at Rectitude (RECT) to free up analysts to publish ratings.
Police cars outside the residence of Thomas Matthew Crooks, the suspected shooter at a Trump rally on Saturday, investigate the area in Pennsylvania. Following the incident, one rally attendee was killed, two rally attendees are in critical condition and Donald Trump suffered a non-fatal gunshot wound. The shooter is dead after being shot dead by the United States Secret Service. (Photo by Kyle Mazza/Anadolu via Getty Images)
Investors will initially favor traditional safe-haven assets and may lean toward trades more closely tied to former President Donald Trump’s chances of winning the White House after he survived an assassination attempt, according to market watchers.
“There will undoubtedly be some protectionist or safe-haven flows into Asia early this morning,” said Nick Twidale, chief market analyst at ATFX Global Markets. “I suspect gold could test all-time highs, we’ll see the yen being bought and the dollar, and flows into Treasuries as well.”
Early market commentary suggested Trump’s shooting at a rally in Pennsylvania on Saturday could also prompt traders to increase his likelihood of success in the November election. His support for looser fiscal policy and higher tariffs is generally seen as likely to benefit the dollar and weaken Treasuries.
An indicator of market sentiment heading into the weekend: Bitcoin surged above $60,000, likely reflecting Trump’s pro-crypto stance.
Other assets positively linked to the so-called Trump trade include stocks of energy companies, private prisons, credit card companies and health insurers.
Traders will also be closely watching market measures of expected volatility on Monday, such as those in the tariff-sensitive Chinese yuan and Mexican peso, which have begun to price in the U.S. vote.
Trump said he was shot in the right ear after a shooting at his rally. His campaign said in a statement that he was “fine” after the incident, which prompted him to rush off the stage.
“Currencies will be the first major market on Monday in Asia to react to the weekend’s shots. There’s potential for extra volatility, and getting a clear reading could be especially difficult because liquidity will be hurt by Japan’s national holiday,” said Garfield Reynolds, Asia team leader for Bloomberg Markets Live.
Strategists had already expected a volatile run-up to the election, particularly as Democrats are still agonizing over President Joe Biden’s candidacy after his poor performance in last month’s debate raised questions about his age. Investors were also grappling with the possibility that the election could end in a drawn-out dispute or political violence.
But there is little precedent for events like those in Pennsylvania. When President Ronald Reagan was shot four decades ago, the stock market plunged before closing early. The next day, March 31, 1981, the S&P 500 rose more than 1% and benchmark 10-year Treasury yields fell 9 basis points to 13.13%, according to data compiled by Bloomberg.
Bond investors should pay particular attention as the attack is likely to boost Trump’s election chances and ultimately lead to concerns about the fiscal outlook, according to Marko Papic, chief strategist at California-based BCA Research Inc.
“The bond market must at some point become aware of President Trump’s greater chances of winning the White House than any of his rivals,” Papic wrote. “And I continue to believe that as his chances increase, so too must the likelihood of a bond market revolt.”
Kyle Rodda, senior financial markets analyst at Capital.com, said he was seeing client flows into Bitcoin and gold following the shooting.
“This news marks a turning point in American policy norms,” he said. “For markets, it means safe-haven trades, but more tilted toward non-traditional safe-havens.”
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Latest news on July 11, 2024: Airtel says its new Xstream Fiber plans bundle over 350 live TV channels (Official Photo) (Reuters) Disclaimer: This is an AI-generated live blog and has not been edited by Hindustan Times staff.
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Thu, 11 Jul 2024 08:44 PM
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News / Business / Latest Business News Live Updates Today, July 11, 2024
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Jio Financial share price: Should you buy this Reliance group stock on Monday ahead of Q1 FY2024 results?
Q1 2024 Results: Jio Financial Share Price will be in focus on Monday as the Reliance Group company has a fixed board meeting on July 15, 2024 to consider and approve the company’s unaudited standalone and consolidated financial results. Trust Group company informed about the Q1 2024 Results date on Wednesday last week via an exchange filing. According to stock market experts, Jio Financial Services Limited is poised to deliver impressive Q1 results for FY25 on solid operating income. They have forecast a healthy QoQ PAT for the company in Q1 FY25.
Jio Financial Services News
Speaking on the Jio Financial Services Q1 2024 results, Manish Chowdhury, Head of Research, StoxBox, said, “We believe Jio Financial Services is poised to deliver impressive results in Q1FY25 aided by its operating income, which is likely to show robust growth driven by strong investment income, which in turn should lead to healthy PAT growth on a sequential basis. Jio Financial Services continues to make strategic moves such as launching digital products and expanding its ecosystem, with a clear focus on future growth. The company has announced plans to introduce products for lending against stocks and mutual funds, leveraging Jio’s large user base, which could be a significant growth driver in the coming quarters.”
“Furthermore, with the NBFC receiving RBI approval to become a primary investment company, Jio Financial Services is well-positioned to unlock value from its investments. Overall, we expect the company to report robust numbers in the upcoming quarter,” the StoxBox expert added.
Jio Financial Stock Target Price
Speaking about the technical outlook of Jio Financial share price, Ganesh Dongre, Senior Manager, Technical Research at Anand Rathi, said, “Jio Financial Services share price is poised to make a fresh high at the ₹260 apiece level. If the stock breaks above this mark, the Reliance Group stock could make a fresh high by touching the ₹290-₹295 zone. Hence, those with Jio Finance stock in their portfolio are advised to stick to the script by keeping a stop loss at ₹205. If the stock breaks above ₹260 decisively, then one can upgrade the stop loss at ₹240 for the near-term target of ₹295.”
On the advice to new buyers regarding Jio Financial stock, Ganesh Dongre said, “New buyers are advised to wait for the breakout. Once the stock breaks above ₹260, one can buy this Reliance Group stock at the short term target of ₹295, keeping a stop loss of ₹240 apiece.”
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. Investors are advised to consult with certified experts before making any investment decisions.
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