The bull market is charging on, with the Dow Jones, NASDAQ, and S&P 500 indexes all closing out last week by recording new record highs. It looks like the good times will be with us for the New Year celebrations, and some of the Street’s top analysts are making appropriate buying recommendations.
Here at TipRanks – where we track and measure the performance of analysts – we’ve opened up a helpful analytic tool. The Daily Stock Ratings tool brings the most up-to-date info on the markets right to your fingertips, so you’ll know which stocks are attracting attention, and which analysts are most active. Even better, you’ll see the analyst’s ranking – right alongside the recommendation. It’s everything you need to know to make the right investment decision for your portfolio.
Now, let’s take a dive into the data, with three stocks that the Daily Ratings tool has recently brought to our attention.
Iovance Biotherapeutics, Inc. (IOVA)
If you’re looking for share appreciation, and don’t mind risk, the biotech industry deserves serious consideration. The sector is heavy in small-cap companies conducting long-term, capital-intensive research work. They go public as a way of increasing the investor pool; investors buy in because the rewards, when a new drug is approved or launched, can be significant. For example, IOVA stock has gained 232% in 2019.
The company, Iovance, engages in cutting edge research for cancer treatment, focusing on tumor infiltrating lymphocyte immunotherapy technology. It is a new approach to the treatment of cancerous tumors, with a demonstrated efficacy against metastatic melanoma. In a recent development, the company announced last month that Cohort 2 data from the Phase 2 lifileucel study was showing positive results.
CEO Maria Fardis said of the lifileucel study, “These results continue to show that lifileucel offers a potential therapeutic option for the metastatic melanoma patients enrolled in this study. We continue to enroll patients in the pivotal cohort of the study, Cohort 4…” She added that the company will be pursuing a Biologics License Application for lifileucel in 2020.
Iovance’s overall position, pursuing high-potential treatments for visible cancers, with potential products ready to start the licensing process, was noticed by JMP Securities analyst Reni Benjamin. Benjamin wrote of IOVA, “The company's multiple ongoing pivotal trials in melanoma and cervical cancer demonstrated impressive efficacy. Iovance is also conducting tumor infiltrating lymphocytes, or TIL, trials in head/ neck cancer and non-small cell lung cancer as well as other indications…” The upbeat picture earned it a Buy rating with a $38 price target from the analyst. His target implies an upside potential of 29%. (To watch Benjamin’s track record, click here)
IOVA holds a unanimous Strong Buy consensus from the analysts, based on 6 Buys given in the past three months. The stock’s average price target, $32, suggests an upside of 8.8% from the $29.41 trading price. These are shares with a low cost of entry and a modest, but real, potential for gains. (See Iovance stock analysis at TipRanks)
Micron Technology, Inc. (MU)
Moving to the tech sector, we’ll look at Micron. Even if you haven’t heard this company’s name before, there is a good chance you have used some of its products – Micron is one of the largest semiconductor chip makers in the world, and pulled in over $31.8 billion in revenues last year. While the US-China trade tensions have depressed sales this year, the company has maintained market share in a competitive industry.
That Micron is heading up is clear from the stock’s performance this year. MU has gained 74%, an impressive figure almost triple the gains of the broader S&P 500 index. Earlier this month, MU beat the quarterly revenue forecast by over 2%, reporting $5.14 billion in revenues for fiscal Q1. EPS met the estimates, at 48 cents per share.
Two analysts have given MU a thumbs-up recently. Wedbush’s Matt Bryson looked at rising prices for the company’s NAND chips and wrote, “Periods of positive pricing changes are the best periods to own memory stocks.” He added that with the combination of new gaming consoles and the coming 5G rollout, “Demand for both NAND and DRAM should accelerate through the course of 2020.” Bryson shows his enthusiasm for MU with a Buy rating, a $65 price target, and the suggestion of 18% upside. (To watch Bryson’s track record, click here)
The other Buy rating comes from 5-star analyst Mehdi Hosseini, of Susquehanna. Hosseini agrees that Micron’s fortunes will head upward – along with the chip industry generally – next year: “…as we enter 2020, we expect the narrative on Micron to change to one that is centered around the company's potential earnings in the next upcycle, which we currently estimate to be in the $8-$10 range…” His $85 price target suggests an impressive 54% upside for MU shares. (To watch Hosseini’s track record, click here)
Overall, Micron scores a Moderate Buy from the analyst consensus, with 25 recent ratings including 17 Buys, 6 Holds, and 2 Sells. The chip industry’s recent headwinds have weighed on the company, but, Wall Street is coming around to the idea that customer demand will be good for semiconductors in the near-term. MU shares are trading for $55.06, and the $63.35 average price target indicates room for 15% growth on the upside. (See Micron stock analysis at TipRanks)
Johnson & Johnson (JNJ)
We’ll end with a blue-chip staple of the stock market. Johnson & Johnson has its fingers in every segment of the home healthcare industry, including many of the household names you take for granted: Band-Aids, Tylenol, and Neutrogena, to name just a few. The company’s famous “no more tears” baby shampoo has been a staple of baby-care for decades. In addition to home health, JNJ is heavily invested in medical devices and pharmaceuticals.
Johnson reported Q3 earnings in line with its size and position in the market. Revenues and earnings both beat the forecasts, with the top line coming in at $20.7 billion and the bottom line hitting $2.12 per share. Half of the quarterly revenue came from JNJ’s pharmaceutical division. From an investor perspective, the best news was that the company raised full-year guidance, setting the earnings range at $8.62 to $8.67.
JNJ has been in the news recently due to high-profile lawsuits. The largest deals with claims that the company’s baby powder, long based on talc, was possibly carcinogenic. The company has also been implicated in suits related to the opioid drug addiction epidemic, for which it was recently ordered to pay out $572 million. On a smaller scale, Johnson & Johnson was ordered to pay $8 million in a suit involving risks from the antipsychotic drug Risperdal.
The barrage of suits, and the high-dollar judgements, have depressed JNJ stock this year. While it is still up since last January, the shares have only gained 13%, well below the broader market.
Morgan Stanley’s 5-star analyst David Lewis sees JNJ’s underperformance as an indication that it’s time to buy the stock. He points out that JNJ shares are trading at a discount relative to the company’s peers. He writes, “The significantly discounted value and relative multiple create an attractive buying opportunity… Considering the stock appears to be pricing in significantly more legal liability than our probability-weighted analysis suggests, we see J&J’s defensiveness returning, resulting in multiple expansion and outperformance in 2020.” Lewis raised his price target on JNJ to $170, implying an upside of 16%. (To watch Lewis’ track record, click here)
With a current share price of $146.06, and an average price target of $154.45, JNJ shares show an upside potential of just 5.7%. That’s a clear sign of how the legal judgements are perceived to have impacted the company. Wall Street is starting to come around to a more bullish view, however, as JNJ gets a Moderate Buy from the analyst consensus. The stock has 8 Buy ratings against 4 Holds. (See Johnson & Johnson price targets and analyst ratings on TipRanks)