2 Buying Opportunities Worth Considering


Between the war in Ukraine, the reimposition of COVID lockdowns in China, and the Fed’s policy shift toward rate hikes and monetary tightening, markets face a bewildering array of headwinds and crosscurrents. Inflation is high, reflecting both rising commodity prices and increased consumer demand, and there are fears that at some point inflation will reach a level high enough to begin to dampen demand.

All of this adds to the uncertainty. But in times of uncertainty, there are also opportunities.

“There are definitely opportunities from a valuation perspective,” said JPMorgan’s global market strategist Meera Pandit. “And now we’re seeing massive differentiation on the basis of earnings. So earnings are going to be a huge differentiator as we go through the year in terms of some of these top opportunities for investors.”

We’ll follow that line and see what kind of stocks JPMorgan stock analysts are picking as opportunities under current conditions. We used the TipRanks database to find two such JPM choices; Shares listed for purchase and according to JPM, more than 40% increase for the coming year.

Signature Bank (SBNY)

We will start in the banking sector. Signature Bank is one of the largest banks in the United States, ranked in the top 25, and is based in New York. The bank has a presence in the New York metropolitan area, North Carolina and California. Signature had total assets of $118 billion at the end of 2021, a sum that included $85.3 billion in deposits and $65.2 billion in loans.

Signature’s client base includes high net worth clients, including private companies, their owners and senior executives. The bank is building a reputation as one of the most crypto-friendly banking institutions in the country, and currently around 16% of its total deposits come from cryptocurrency customers.

Earlier this month, Signature reported its financial results for the first quarter of 2022. The bank’s net interest income rose more than 41% year-over-year to $573.6 million. dollars, a gain of $167.1 million. In another key indicator, the bank said it had asset-producing assets of $117.45 billion. This is an increase of $38.7 billion over the prior year quarter, a gain of 49.2%.

In the end, that boiled down to EPS per diluted share of $5.30. Year-over-year, that represents earnings growth of 63%.

Reviewing this banking stock for JPM, analyst Steven Alexopoulos notes Signature’s strong deposit and loan growth, but adds that these are not the key metrics.

“With Signature transforming its balance sheet over the past few years to become more asset sensitive, it now has 51% floating rate loans and 43% deposits in non-interest bearing deposits, which should benefit banks’ earnings at as interest rates move higher.While 1Q22 was a tough quarter for crypto markets with a sharp drop in prices, there was clearly no slowdown in institutional adoption of crypto. crypto, with Signature onboarding the largest number of registered crypto customers in Q1 with 160 new customers added (vs. 147 for FY2020 and 382 for FY2021).We believe the pace of institutional adoption is key to fueling crypto business. Signature crypto bank in volatile crypto markets,” Alexopoulos said.

These comments confirm Alexopoulos’ overweight (meaning buy) rating on SBNY, which he describes as a great idea. His stock price target of $460 implies 82% upside potential for the coming year. (To see Alexopoulos’ track record, Click here)

Overall, this banking stock is a strong unanimous buy, as its 10 recent analyst reviews are all positive. The stock is selling for $253.39 and the mid price target of $409 suggests a 61% upside from current trading levels. (See SBNY stock forecast on TipRanks)

United Airlines Holdings (LAU)

United Airlines Holdings is, as its name suggests, a holding company; its principal subsidiaries are the two operating arms of United Airlines. The company’s hubs are located in major urban areas such as Chicago, Houston and San Francisco, and United is the largest airline in North America. The company flies more than 3,100 daily departures to approximately 400 destinations in the United States and around the world, and operates a modern, fuel-efficient fleet of more than 800 aircraft.

Like much of the airline industry, United posted heavy losses in 2020 – and has been bouncing back since the second quarter of 2021. Revenue for the full year of 2021 was $24.6 billion. dollars, meeting company targets and significantly exceeding the 2020 result of $15.3 billion. In the first quarter of 2022, United reported $7.6 billion, which matches its own guidance and 2021 results.

Compared to 2019, the last pre-pandemic year, United’s revenue and passenger capacity remain down. This is an industry-wide issue and reflects the fact that, in the wake of COVID, economies are not yet fully reopened and consumers are not yet fully ready to do so. new confidence in air travel. These problems have been exacerbated in recent months by the war in Ukraine and new shutdowns in China.

Looking ahead, United released new guidance with its 1Q22 report, showing the company expects a return to profitability this year. Additionally, United expects second-quarter revenue to hit a company record for quarterly revenue. United expects total revenue per available seat mile (TRASM, an industry standard measure) to increase 19% from comparable 2Q19 data.

In United’s coverage for JPMorgan, analyst Jamie Baker writes: “Despite recent volatility in the space, we believe UAL has weathered the pandemic better than most and is emerging amid favorable trends. Our overweight rating reflects the efforts of UAL’s Next strategy which are beginning to take hold, and the early stages of a recovery in business and international travel demand which should benefit UAL comparatively more than others. leisure-oriented airlines.

Baker’s overweight (i.e. buy) rating comes with a price target of $76, suggesting that UAL has room to grow by around 46% over the course of the year. coming year. (To see Baker’s background, Click here)

While JPMorgan takes a bullish view of this airline stock, other analysts’ opinions are more divided. Of the 18 recent analyst views here, 10 are Buy, 6 Hold and 2 Sell, giving UAL a consensus Moderate Buy rating. (See UAL stock forecast on TipRanks)

To find great ideas for stocks trading at attractive valuations, visit TipRanks’ Best stocks to buya recently launched tool that brings together all information about TipRanks stocks.

Warning: The views expressed in this article are solely those of the analysts featured. 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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