After the summer’s hike, the market corrected itself – but more so, sales were heavily concentrated in the tech sector. The high-tech NASDAQ is now leading the decline, having lost 11.5% since Sept. 2. JPMorgan strategist Marko Kolanovic points out that most markets are now in a good position to rebound. Kolanovic believes that stocks will rise again in the last quarter of this year. “Now we think the sell-off may have ended. Low positioning. We got a little bit of cleaning up, so we think the market could actually move higher from here, “said Kolanovic. Following Kolanovic’s view, JPMorgan stock analysts began pointing out their options for another advance. These are stocks that JPM believes will double or better in the coming year. Running the ticker through the TipRanks database, we wanted to find out what makes it so attractive. NexTier Oilfield Solutions (NEX) JPM’s first choice was NexTier, an oilfield support service provider. The oil industry is more than just a production company. There are many companies providing drilling expertise, fluid technology for fracking, geological expertise, pumping systems – all additional services that allow drillers to extract oil and gas. That is the sector where NexTier lives. Unfortunately, this is a sector that has proven vulnerable to falling oil prices and economic disruption due to the coronavirus pandemic crisis. Revenues fell from $ 627 million in Q1 to $ 196 million in Q2; EPS was negative in both quarters. But NexTier has several advantages that place it in a good place to take advantage of the market’s upside. These advantages, among others, are on the mind of JPM analyst Sean Meakim. “Granted we are concerned about a sector upsetting the ‘COVID-19 recovery’ crowd of generalists due to the beta revenue asymmetry of oil, but with 1) a solid balance sheet ($ 17 million net debt), 2) our prospects for positive (if modest) cash-making by 2021 (JPMe + $ 20mm), 3) a path to provide equally attractive utilization rates and margins, and 4) the cheapest rating in the group (~ 20% replacement), we think NexTier stands out as one of the best-positioned pressure pumps in our coverage, ”said Meakim. In line with his optimism, Meakim ranks NEX as Overweight (i.e. Buy) along with a target price of $ 5. The target represents a 203% eye-opening up potential for the coming year. (To see Meakim’s track record, click here) Likewise, the rest of the Path is getting more and more active. The 6 Buy and 2 Hold ratings assigned in the past three months add to Strong Buy’s analyst consensus. Additionally, the $ 3.70 average target price puts the potential twelve-month profit at 124%. (See analysis of the NEX stock at TipRanks) Fly Leasing (FLY) The next stock on our JPMorgan pick list is Fly Leasing, a company with an interesting niche in the airline industry. It’s not commonly known, but most airlines don’t actually own their planes; for various reasons, they rented it. Fly Leasing, which has a fleet of 86 commercial aircraft valued at $ 2.7 billion, is one of the leasing companies. Its planes, mostly the Boeing 737 and Airbus A320 models, are leased to 41 airlines in 25 countries. Fly Leasing earns revenue from rent, maintenance fees and security payments. As one can imagine, the corona crisis – and in particular, the lockdowns and travel restrictions that have not been fully lifted – are hurting Fly Leasing, along with the airline industry. generally. With flights halted and ticket sales severely depressed, revenues are falling – and airlines are forced to reduce or delay their flight lease payments. This is a situation that is only now starting to improve. The numbers show as far as they can go. FLY’s revenue has dropped from $ 135 million in 4Q19 to $ 87 million 1Q20 to $ 79 million in the last quarter. EPS, likewise, has fallen, with Q2 showing just 37 cents, well below the 43 cents forecast. But there are some bright spots, and JPM’s Jamie Baker points out the most important. “[We] conservatively expect no deferred payments in 2H20 vs. management expectations of $ 37 million. Overall, our deferral and repayment assumptions are in line with those of other lessors in our scope. We assume no capex for the remainder of the year, consistent with management comments on no capital commitments in 2020 […] Despite the recent volatility seen in space, we believe the income profile of lessors is stronger than those of airlines, “said Baker. In short, Baker believes Fly Leasing has control over its income, expenses and cash situation – putting its stake in the starting block if the market changes for the better. Baker assesses FLY Overweight (i.e. Buy), and its $ 15 price target implies a strong 155% increase over the next 12 months. (To see Baker’s track record, click here) Over the past 3 months, two other analysts have thrown hats with views on aircraft leasing companies. Two additional Buy ratings give FLY a Buy Strong consensus rating. With an average price target of $ 11.83, investors will take home a 101% gain, if the target is met over the next 12 months. (See analysis of FLY’s stock in TipRanks) Lincoln National Corporation (LNC) Lastly, Lincoln National, is an insurance holding company based in Pennsylvania. Lincoln’s subsidiaries and operations are divided into four segments: annuities, group coverage, life insurance, and retirement plans. The company is listed on the S&P 500, has a market capitalization of $ 5.8 billion, and total assets of more than $ 290 billion. The generally depressed business climate in 1H20 dampened LCNs, pushing revenues down to $ 3.5 billion from $ 4.3 billion six months ago. Income also fell. EPS Q2 came in at 97 cents, missing forecasts by 36%. There’s a bright spot: through all of this, LNC has maintained its dividend payouts, without deductions and without suspension. The current quarterly dividend is 40 cents per common share, or $ 1.60 per annum, and makes 4.7%. That is a yield that is almost 2.5x higher than that found among peers in the S&P 500. Jimmy Bhullar closed this stake for JPM, and while he acknowledged the weak Q2 results, he also indicated that the company should benefit as business conditions slowly return. to normal. “LNC’s 2Q results are weak, characterized by falling EPS and a weak business trend. The majority of the shortages are due to rising COVID-19 claims and weak alternative investment income, factors that will improve in the future. […] The market recovery will help alternative investment earnings and reported spreads as well… ”These comments supported Bhullar’s Overweight rating. Its $ 73 price target shows room for a strong 143% increase from current levels (To see Bhullar’s track record, click here) Overall, LNC’s Moderate Buy rating is based on 3 recent Buy reviews, compared to 5 Holds. The stock is selling for $ 30 and the median target price is $ 45.13, indicating a 50% chance of a rise for the coming year. (See LNC stock analysis at TipRanks) To find great ideas for trading stocks with attractive ratings, visit TipRanks ‘Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ equity insights. Disclaimer: Opinions expressed in this article are solely those of top 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.
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