3 Strong Buy Stocks Trading at Steep Discounts

Shutterstock photo

If you are looking for a bargain, you’re in the right place. We used TipRanks’ nifty Top Analyst Stocks tool to pinpoint three key stocks that are poised to soar from current levels. These are stocks with substantial backing from Wall Street’s best-performing analysts. And as you will see below, all three of these stocks look seriously undervalued right now. So let’s dive in and take a closer look:

Alnylam Pharma (ALNY)

Biotech Alnylam Pharma has just received a big thumbs up from one of the Street’s best healthcare analysts. B.Riley FBR’s Madhu Kumar stated on May 24 “We reiterate our ALNY Buy rating, $200 price target, and Alnylam's status as our Alpha Generator pick and one of our Out-the-Gate 2018 picks.” Given the current share price of $101 this suggests almost 100% upside potential.

Alynylam is developing novel RNAi-based therapies to treat a wide range of debilitating diseases with high unmet medical need. The involves a cellular mechanism that use the gene's own DNA sequence of gene to turn it off, a process that researchers call silencing. One of the diseases that ALNY is investigating right now is TTR amyloid disease- a rare and potentially fatal disease.

Unsurprisingly, investors became jittery on the news that rival Pfizer has secured Breakthrough Status for its own TTR stabilizer drug. But worry not says Kumar. He told clients: “In contrast to the consensus, we do not consider this a material overhang for Alnylam's TTR RNAi franchise, as all the existing clinical data suggest superiority for RNAi over tafamidis.” Furthermore, “taken as a whole, the available clinical evidence, in our view, supports RNAi as the best-in-class therapeutic option across TTR amyloid diseases.”

In fact, Kumar actually sees the silver lining in Pfizer’s work. Even though Pfizer may now have an early start this still represents a ‘net positive’ for Alnylam. The extra time afforded to Pfizer “will provide patient-finding more than market consolidation.” This is good news because ALNY also stands to benefit from these ‘patient finding’ activities.

Overall our data reveals that this Strong Buy stock has received 8 recent buy ratings. This is vs just 1 hold rating in the same time. These analysts have an average price target on ALNY of $160- suggesting big upside potential of over 59%.

Universal Display (OLED)

OLED leader Universal Display hasn’t been the best performer recently. But five-star Oppenheimer analyst Andrew Uerkwitz believes the pessimism surrounding this organic light-emitting diode technology maker is unjustified. He has just attended SID Display Week, the largest display industry convention- and left the event secure in his bullish take on OLED stock.

“We see solid mid-term demand for mobile OLED and more potential upside from accelerating OLED TV adoption,” writes Uerkwitz, adding that: “We came away incrementally more positive on Universal Display, which we believe remains the best long-term investment to benefit from the OLED adoption story.” He has a $120 price target on OLED stock (20% upside potential).

Goldman Sachs’ Brian Lee is even more bullish. He reiterated his buy rating with a $150 price target post-conference as "we continue to see an attractive setup into 2H18 given tepid investor sentiment despite the potential for normalizing materials volume trends at Samsung starting in 3Q, continued strength in TVs, and mid-to-long term upside in blue, among other factors."

Indeed, the stock popped recently on speculation by Korea’s Electronic Times that Apple (AAPL) will use OLEDs in three different iPhone screens in 2019. While some analysts have doubted whether Apple will use OLED screens in all three iPhones, the fact remains that this stock boasts 100% Street support right now. And with an average analyst price target of $143, the upside potential stands at a pretty hefty 43% right now.

Delta Airlines (DAL)

Our third and final stock pick is major US airline Delta Airlines. While the stock has suddenly received a bout of negative publicity (due to a dog dying during a layover), this doesn’t change the fact that from an investing point of view, DAL makes a compelling choice.

Top-rated Imperial Capital analyst Michael Derchin has just notched up his price target from $68 to $70. He sees three key catalysts for DAL to raise its fiscal 2018 revenue outlook. These are as follows: 1) pricing power in key domestic hubs; 2) improving business yields and 3) strong international results. However, he does caution that these gains could be tempered by higher oil prices- and as a result he lowers his earnings estimate even as he raises his price target.

Nonetheless analysts are united in their consensus that DAL is way too cheap right now. For example, Morgan Stanley’s Rajeev Lalwani argues that the stock’s current multiple is just too low at around 8 times the 2019 consensus EPS estimate. This looks particularly cheap when you factor in the stock’s impressive margins and cash flow. In total, our data shows that DAL has received 8 consecutive buy ratings in the last three months. Meanwhile the $74 average price target indicates sizeable upside potential of 37%.

Our database covers over 5,000 stocks. Find your own “Strong Buy” stocks in the sector that interests you the most. Go to the Nasdaq Smart Portfolio stock screener now.

Author: Harriet Lefton.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Investing Ideas , Stocks , US Markets
Referenced Symbols: ALNY , OLED , DAL

More from TipRanks




Stocks, Earnings

Research Brokers before you trade

Want to trade FX?