J.P. Morgan Says These 3 Stocks Will Surge Over 30% From Current Levels

Amid the recent surge of new COVID-19 cases, do stocks still have more room to climb? J.P. Morgan says yes. According to strategist Marko Kolanovic, who correctly called stocks’ March bottom, there are several reasons to remain squarely in the bull camp.

First and foremost, he argues “positioning remains light around macro and systematic investors.” So, summer seasonality could “help the volatility spike continue to fade,” which means that investors may be looking to snap up shares as the summer continues. Additionally, the unprecedented stimulus brought about by the pandemic as well as the fact that the latest wave of COVID-19 cases is mainly affecting younger people also contribute to his bullish outlook.

On top of this, should Biden win the U.S. presidential election in November, the market may get a boost. “Given the current economic weakness, business recovery and job growth are likely to be prioritized over policies that could dampen economic growth and perhaps even jeopardize the desired 2022 midterm election outcome... As such, the degree of corporate tax reversal may ultimately be lower than currently discussed,” J.P. Morgan chief U.S. equity strategist Dubravko Lakos-Bujas commented.

Taking all of this into consideration, we used TipRanks’ database to take a closer look at three stocks flagged by J.P. Morgan analysts for their solid growth prospects. We’re talking about over 30% upside potential here. As it turns out, each ticker has also scored enough praise from the rest of the Street to earn a “Strong Buy” consensus rating.

Rocket Pharmaceuticals (RCKT)

Using an integrated multi-platform approach, Rocket Pharmaceuticals wants to develop innovative gene and cell therapies that could potentially cure serious diseases. Based on the strength of its technology, J.P. Morgan recently gave the company its stamp of approval.

Writing for the firm, analyst Eric Joseph told clients, “In our view, Rocket is advancing a differentiated gene therapy platform, well-positioned against multiple rare pediatric diseases with either first- or best-in-class product candidates. Built around two delivery modalities (LVV for bone marrow affected disorders and AAV for systemic conditions), the company's pipeline boasts multiple shots on goal, the majority of which offering rapid timelines to commercialization.”

Looking at its lead asset, RP-L102, which is now in pivotal development for Fanconi anemia (FA), Joseph points out that unlike stem cell transplant treatment, it drastically reduces the risk of conditioning therapy. As a result, he believes the therapy reflects a “breakthrough approach”. Should approval come at the beginning of 2024, the analyst estimates there’s a peak sales opportunity of $900 million in the U.S. and the EU, with the worldwide opportunity landing at over $1.5 billion.

As for its RP-A501 candidate, Joseph also sees a major opportunity given that “Danon disease is one of the most prevalent life-threatening, monogenic disorders.” Just how large is the opportunity for this indication? More than $4.5 billion.

With several potential catalysts, including preliminary histology and functional follow up from RPA501 in Danon disease, longer-term Phase 1 follow-up data from RP-L102 in FA and preliminary and follow up Phase 1 updates for RP-L301 and RP-L201, respectively, slated for the next six to twelve months, Joseph thinks the share price “under reflects risk the adjusted commercial potential of the pipeline.”  

Everything that RCKT has going for it prompted Joseph to rate the stock an Overweight, while setting a $38 price target. This target implies shares could climb 71% higher in the next year. (To watch Joseph’s track record, click here)

Turning now to the rest of the Street, other analysts are on the same page. Only Buy ratings, 6, in fact, have been issued in the last three months, so the consensus rating is a Strong Buy. The $37 average price target puts the upside potential at 67%.

Reprinted from Yahoo Finance，the copyright all reserved by the original author.

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