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Analysts reiterate their stock recommendations quite a bit. So when a stock is upgraded, or more rarely, downgraded, the market takes note. This is especially the case for a market-leading stock like Facebook, Inc. (NASDAQ: FB ) - see below!
We used TipRanks to find the most interesting recent stock ratings- and zeroed in on the stocks with a 'Strong Buy' Street consensus. Why is the sentiment now shifting for these seven stocks? Could it be that the market is looking more optimistic?
"I'm not a real positive guy, but I'm starting to turn more positive. We're starting to see good things across the marketplace. Value is being uncovered," Wells Fargo Securities' Chris Harvey told CNBC on May 6. He continues: "You don't have to run. It's really be selective, be slow, be methodical and look for opportunities," Harvey said. "It's a walk, not run-type of situation."
So with this in mind, let's dive in now and find out what these seven stock upgrades are all about. It's time to get bullish:
Strong Buy Stock: Dynavax Technologies (DVAX)
Cutting-edge biotech stock Dynavax Technologies Corp (NASDAQ: DVAX ) now has JP Morgan's seal of approval. The move comes ahead of the all-important ASCO conference on June 1-5. DVAX will present key clinical trial data on its immunotherapy treatments for cancer. Most notably, this will include a Phase 2 melanoma update for Dynavax's lead product candidate SD-101.
Top JP Morgan analyst Anupam Rama believes the market is vastly underestimating the potential of this drug. The stock's current valuation ignores the early signs of efficacy demonstrated by SD-101 says Rama. Encouragingly, Dynavax has committed to initiate a Phase 3 trial in melanoma by the end of this year and in head and neck cancer in early 2019.
He adds: "We believe the recent downside has created an interesting entry point ahead of ASCO, additional SD-101 readouts in 2018 and the Heplisav launch long-term." This is especially true when you consider that Heplisav is a "best-in-class Hepatitis B vaccine." The vaccine has already been launched in the US with a 60-person field sales team.
In conjunction with the rating upgrade, Rama boosted his price target from $25 to $27 (38% upside potential). The new rating also brings Rama in line with Street consensus. Our data shows that the stock currently floats a 'Strong Buy' rating with five recent bullish calls. These analysts have a $30 average price target (53% upside potential).
Strong Buy Stock: Facebook (FB)
Five-star Stifel Nicolaus analyst Scott Devitt is one of the Top 50 analysts on TipRanks. His stock picking ability is second-to-none (this 25% average return per rating). But even top analysts can make mistakes. " Post-1Q earnings, we chose to stick with our recent view on Facebook and were wrong to do so. With the information available now, FB stock is too cheap to ignore despite its challenges" stated Devitt on April 26.
Devitt downgraded the stock in early January and explains why here: "We became concerned about Facebook on the heels of survey data suggesting platform fatigue. Our views were emboldened when Mr. Zuckerberg began to discuss fixing Facebook in 2018."
Now, however, "we may be getting closer to the other side in these areas of concern and valuation may provide the support to see us through." Plus FB has the benefit of key growth drivers like WhatsApp, Instagram and video to 'fuel above-market ad revenue growth for the next several years.'
We can see that his FB upgrade comes with a $202 price target. That translates into 8% upside from current levels. However, this is still far below the Street.
Based on the last three months of ratings, analysts have an average FB price target of $220. This suggests more appealing upside potential of 18%. Thirty out of 32 recent analyst ratings on FB are bullish.
Strong Buy Stock: MDC Partners (MDCA)
Keep a close eye on small-cap MDC Partners Inc. (NASDAQ: MDCA ) - an intriguing marketing and communications network. Most interestingly, MDC was recently upgraded by five-star Wells Fargo analyst Peter Stabler . He has a $10 price target on the stock (130% upside potential).
So what prompted this move? According to Stabler, shares offer compelling valuation and favorable risk/reward. Weighed down by disappointing Q1 earnings results, shares are now at $4.35, down from over $7 five days ago.
"Though MDC's results this quarter again remind us that the company's small size can lead to higher volatility, we continue to view the macro marketing landscape as generally more favorable for smaller agency players" the analyst argued. He concluded "we continue to believe future margin upside is possible."
Three top analysts have published recent buy ratings on MDCA. With an $11.50 average price target, these analysts are projecting upside potential of over 160%.
Strong Buy Stock: Voyager Therapeutics (VYGR)
Voyager Therapeutics, Inc. (NASDAQ: VYGR ) is developing intriguing gene therapies for neurological diseases. Case in point: the company is working with AbbVie Inc (NYSE: ABBV ) to develop a revolutionary Alzheimer's treatment. The deal includes a $69 million upfront payment to Voyager and more than $1 billion in potential milestone payments.
However, Voyager shares plunged recently- dropping 34% in March. Bear in mind though that on a year-to-date basis, shares are still up 10%. The move downwards was enough to convince top Wedbush analyst David Nierengarten to return to the Voyager bull story. He blamed confusing hedging language in Voyager's 10Q filing as part of the reason for the fall.
Now the risk/ reward ratio is much more compelling says Nierengarten- especially ahead of the pivotal trial for VY-AADC. This is the company's lead product candidate for the treatment of Advanced Parkinson's disease.
His $28 price target indicates massive upside potential of over 50%. In total, this stock has scored eight consecutive buy ratings in the last three months. From the current share price, analysts are projecting big growth of over 98%.
Strong Buy Stock: New Relic Inc (NEWR)
Software vendor New Relic, Inc. (NYSE: NEWR ) has just reported earnings results that crushed expectations. Post report, shares jumped 18% on May 9. The move came as investors digested an impressive 34% revenue growth. The company, which helps businesses track and quickly fix software bugs, ascribed the beat to an increase in spending per customer.
"We'll obviously be getting new customers, but the average spend we expect to continue to go up in our existing folks," said CFO Mark Sachleben during the earnings call. "We saw some great metrics around that this past year."
On the news top BMO Capital analyst Keith Bachman upgraded NR from Hold to Buy. He also bumped up his price target to $95 (from $83). According to Bachman, the company's "competitive advantage in leveraging large performance data sets to help deliver value". He also describes himself as "encouraged" by customer revenue growth.
Post-upgrade, NR now scores seven consecutive buy ratings from the Street. So no recent hold or sell ratings here anymore. "We continue to see good opportunities for more expansion/upside as APM [application performance management] penetration grows, Infrastructure gains momentum, and new machine learning and analytics-driven opportunities emerge" commented top Oppenheimer analyst Ittai Kidron on May 9.
Strong Buy Stock: NiSource (NI)
Source: Andy Arthur via Flickr
NiSource, Inc (NYSE: NI ) serves nearly four million natural gas and electric customers across seven states. And now Goldman Sachs has upgraded NI because it 'deserves a premium valuation'. Not from Hold to Buy as you might expect, but from Buy to Conviction Buy. NI is now one of an elite alpha-generating group of stocks that Goldman Sachs expects to outperform.
"[We] view this defensive, small-cap utility as one of our top ideas into [the second half of 2018]," says Goldman Sachs analyst Michael Lapides . Above-average EPS, dividend growth and an attractive valuation all bode well for share prices. However, Lapides is particularly excited about the "next leg of the NI story" and sees multiple upward EPS revisions for 2019 and beyond. His $30 price target indicates upside potential of just over 20%.
In total NI has scored 3 recent buy ratings from top analysts. These analysts see NI shares spiking 8.3% to $27 in the coming months.
Strong Buy Stock: Sarepta Therapeutics (SRPT)
Sarepta Therapeutics, Inc. (NASDAQ: SRPT ) is a commercial-stage biopharma which focuses on the treatment of rare neuromuscular diseases. Primarily, the company is busy developing its product candidates for Duchenne muscular dystrophy (DMD). And even a spate of unwelcome news (including a regulatory setback in Europe) hasn't dampened investor enthusiasm.
Shares are up by over 68% in the last three months, with strong demand for Exondys 51 boosting prices. This is the first duchenne muscular dystrophy ("DMD") treatment to gain approval in the US since September 2016. Management projects the peak annual sales potential of its late-stage DMD drugs- which include Exondys 51- at a whopping $2 billion.
Barclays' Gena Wang comments "While we see limited EU opportunity for Exondys 51, and some risk in golodirsen approval based on biomarker data, a good safety profile of PPMO assets could replace suboptimal PMO franchise. We expect a reasonable chance for SRPT's microdystrophin program to show promising clinical activity." Indeed the PPMO platform of drugs could be 'ten times more effective' than Exondys 51 according to Sarepta's CEO Doug Ingram.
As a result, this five-star analyst upgraded SRPT from Hold to Buy on May 11. Her new rating comes with a bullish price target of $107. Overall our data shows that this 'Strong Buy' stock has scored 10 recent top analyst buy ratings vs only 2 hold ratings. These analysts have an average SRPT price target of $98.64.
Which stocks are the top 25 analysts recommending right now? Find out here .
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of 4,500 analysts, 5,000 financial bloggers and even 37,000 corporate insiders. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.Compare Brokers
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