Raymond James: These 3 Shares Are Poised to Surge by at Least 50%
In a current notice on the state of the inventory markets, Raymond James fairness strategist Tavis McCourt factors out a collection of coverage components which are enjoying a job within the present market volatility; the state of affairs is extra complicated, maybe, than most of us have been keen to confess. McCourt notes permutations of the SLR rule, political dynamics on the Senate Banking Committee, and the regulatory environment in direction of potential capital return are all influencing the Fed’s strikes and the market reactions. “We imagine the Fed will do all the things they will to make sure orderly buying and selling in US Treasuries and doesn’t wish to see the volatility and liquidity considerations which have occurred within the final week/over the course of the pandemic. We additionally imagine that the Fed shouldn’t be involved in having a spike in yields as Treasury seeks to finance the subsequent spherical of stimulus,” McCourt opined. The strategist added, “Whereas the SLR dialog is a political and market challenge for the Fed, we imagine that any Treasury and/or fairness market sell-off tied to the controversy is transitory and overblown. We’re extra centered on the enhancing financial surroundings, vaccine distribution, and reflation.” Bearing this in thoughts, our focus turned to a few shares backed by Raymond James, with the agency’s analysts noting that every might soar over 50% from present ranges. Working the tickers by way of TipRanks’ database, we discovered that the remainder of the Road can be on board, as every boasts a Average or Sturdy Purchase consensus score. Orasure Applied sciences (OSUR) We’ll begin within the medical business, a subject that has seen good points by way of the pandemic yr. Orasure, by way of its subsidiaries, is a producer of medical diagnostic checks, and is thought for growing fast check kits for HIV, HEP-C, and Ebola. Previously yr, the corporate created over 150 jobs at its Bethlehem, Pennsylvania services as a part of an effort to develop quick, at-home, COVID check kits. The corporate’s product line has a variety of makes use of, and is marketed to scientific labs, hospitals, doctor practices, and public well being businesses world-wide. As might be imagined, Orasure has seen a fast restoration from a 1H20 income dip adopted by sturdy good points. This fall top-line revenues hit $62.9 million, for a 27% year-over-year acquire. This was pushed by product and providers revenues, which grew 28% to achieve $60.4 million. EPS was optimistic, at 3 cents per share, which was an excellent turnaround from damaging ends in the primary half of the yr – however was down 25% from 4Q19. For the total yr, Orasure reported $172 million in internet revenues, an 11% yoy acquire. Of this complete, $50 million got here from gross sales of oral fluid assortment gadgets (mouth swabs) for COVID-19 check kits. As well as, the corporate reported continued progress on its COVID-19 fast antigen check, and plans to submit prescription self-tests and professional-grade checks for EUA (Emergency Use Authorization) by the FDA by the top of the primary quarter. Analyst Andrew Cooper, in his protection on the inventory for Raymond James, noticed a lot to love, ticking off the components by the numbers: “What we appreciated: 1) Nearly each income consequence. Orasure topped consensus gross sales estimates by 10%… 2) Concrete antigen EUA submission timeline. There isn’t any misunderstanding an anticipated submission this month, with research accomplished and solely extra administrative kind work remaining… 3) Extra capability enlargement. Present capability timelines are on monitor, however administration now intends so as to add one other 50M of annual antigen capability…” To this finish, Cooper places a $16 worth goal on the inventory, implying a 52% one-year upside, and charges OSUR an Outperform (i.e. Purchase). (To observe Cooper’s monitor document, click on right here) A stable repute within the subject, and clear path ahead are positive to draw optimistic sentiment – and three Wall Road analysts have put Purchase scores on Orasure, making the analyst consensus a Sturdy Purchase. Shares are priced at $10.49, and the $18.67 common worth goal is much more bullish than Coopers, suggesting a 78% upside for the subsequent 12 months. (See OSUR inventory evaluation on TipRanks) Sol-Gel Applied sciences (SLGL) Sticking to the medical subject, we’ll swap focus to a scientific stage pharmaceutical firm. Sol-Gel is a biopharma with an fascinating area of interest, growing topical medicines for the remedy of pores and skin ailments. The corporate’s pipeline contains two proprietary formulations based mostly on benzoyl peroxide, each lotions: Epsolay, which is a remedy for papulopustular rosacea, and Twyneo, a remedy for zits. Each medicines had their NDAs (New Drug Functions) filed with the FDA, and remaining approval resolution is predicted in April and August of this yr, respectively. Sol-Gel has, as well as, three different drug candidates in early levels of the pipeline course of. Two are nonetheless within the analysis part, whereas SGT-210 is in Part I trial, with outcomes due in 1H21. SGT-210 is a possible remedy for palmoplantar keratoderma, a thickening of the pores and skin on the palms of the palms and ft which is typically seen as a symptom of a number of uncommon situations. Moreover, Sol-Gel is working in collaboration with Perrigo because the US producer of generic labels of that firm’s brand-name merchandise. In 2020, the 2 firms signed 4 agreements, and now have 12 complete collaboration initiatives. Among the many followers is Raymond James analyst Elliot Wilbur who writes, “Given the massive market alternative in key pipeline merchandise, coupled with current acceptance of NDA submissions, we keep our Sturdy Purchase score on SLGL shares, as we stay optimistic surrounding near-term progress prospects and monetary positioning.” The Sturdy Purchase score comes with a $23 worth goal, suggesting SLGL has room to develop a formidable 156% within the yr forward. (To observe Wilbur’s monitor document, click on right here) Small-cap biopharmas don’t all the time get numerous analyst consideration – they have an inclination to fly underneath the radar. Nevertheless, there are two critiques on file right here and each are to Purchase, making the consensus score a Average Purchase. SLGL shares are priced at $9, with a median worth goal of $22 indicating a runway towards ~145% upside for 2021. (See SLGL inventory evaluation on TipRanks) PAE (PAE) Let’s swap gears, and have a look at authorities help providers. It’s no secret that governments are enormous customers of contract service firms, and PAE is a significant supplier of contract providers for US authorities and protection businesses. PAE has operations on each continent and in 60 international locations, offering a variety of providers, together with evaluation and coaching, intelligence, infrastructure operations, administration and upkeep, logistic and materials help, and data optimization. Till not too long ago, PAE was a privately held firm, however in February final yr it was merged with Gores Holdings III in a SPAC transaction. The transaction introduced PAE shares onto the NASDAQ change on February 10, 2020. 2021 has began with some adjustments in PAE’s contracts with the US authorities. On the finish of January, the corporate misplaced a bid to resume a $125 million contract it had held with Customs and Border Patrol since 2009 – however earlier that very same month, PAE was awarded a $3.3. billion contract with the US State Division. The contract with State contain consular operations at diplomatic services in 120 international locations. 5-star analyst Brian Gesuale, in his protection of PAE for Raymond James, notes the change in contracts, and doesn’t imagine it ought to bother PAE. “PAE’s certified pipeline nonetheless sits round $40B and pending awards north of $6B, which when mixed with the corporate’s 2020 recompete win fee of 93% supplies us confidence that CBP contract might be adequately changed,” Gesuale commented. Turning to specifics on the State contract, Gesuale provides, “…this contract win might add upwards to $110 to $125 million of high-margin annual income to the 2022 mannequin. Total our estimates are going larger, and we proceed to view PAE as one of many extra compelling alternatives within the Authorities IT Companies area. Whereas we anticipate the group will face decelerating fundamentals and a doubtlessly significant re-rating decrease from close to traditionally excessive valuations PAE ought to fare otherwise because it accelerates natural progress…” Consistent with these feedback, the analyst places an Outperform (i.e. Purchase) score on the inventory, and his $15 worth goal implies a 77% one-year upside. (To observe Gesuale’s monitor document, click on right here) PAE inventory has a powerful “sure” on Wall Road. TipRanks analytics present that out of three analysts, all 3 are bullish. The typical worth goal of $12.67 reveals a possible upside of about 50%. (See PAE inventory evaluation on TipRanks) To search out good concepts for shares buying and selling at enticing valuations, go to TipRanks’ Greatest Shares to Purchase, a newly launched instrument that unites all of TipRanks’ fairness insights. Disclaimer: The opinions expressed on this article are solely these of the featured analysts. The content material is meant for use for informational functions solely. It is vitally vital to do your individual evaluation earlier than making any funding.