The conventional wisdom is saying that after the high inflation and severe market losses of 2022, we’re in for a rough ride going forward. But there are always contrarian voices, giving alternate opinions and predictions – and that’s what we’re getting from Jonathan Golub, chief U.S. equity strategist at Credit Suisse.
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Golub’s point is based on data. As he sees it, “The data looks a lot less recessionary that it did three or four months ago… The things [consumers] buy aren’t going to go up as much as their wages and yet jobs are really plentiful, and when you add that all together, it means a consumer is strong and if the consumer is stronger, the likelihood of a recession in the next six months or so is less than everybody thought it would be.”
If Golub is right, then now is a logical time for investors to start buying into stocks, taking advantage of the low prices before a market surge. Golub’s colleagues at Credit Suisse are following this upbeat train of thought, and picking out the stocks that are primed for gains should conditions turn bullish. Do other analysts agree with Credit Suisse? We’ve opened the TipRanks database to find out. Here’s the lowdown.
Viridian Therapeutics, Inc. (VRDN)
We’ll start with Viridian Therapeutics, a biopharma firm with a focus on the development of new medications for the treatment of serious and rare diseases with high unmet medical needs. Viridian is working with drug candidates that are potentially best-in-class, and its leading candidates target thyroid eye disease (TED). The company’s preclinical research program is focused on rare and autoimmune disorders.
The leading drug candidates, however, are worth a closer look. VRDN-001 is currently the subject of the recently initiated Phase 3 THRIVE trial; last month, Viridian announced the first patient enrollment in the trial, which will be conducted in some 50 sites across both North America and Europe. The trial will evaluate the efficacy and safety of VRDN-100 as a treatment for patients with active TED. Topline results are anticipated for release in mid-2024.
The company is also evaluating VRDN-001 in a Phase 1/2 trial, which includes multiple randomized, placebo-controlled cohorts of both normal healthy volunteers and TED patients. Initial clinical data from the first cohort suggested significant and rapid improvements in both signs and symptoms of TED at week 6 after two infusions of 10 mg/kg VRDN-001. Furthermore, patients enrolled in the 20 mg/kg cohort had baseline characteristics that were generally similar to the 10mg/kg cohort.
Among the bulls is Credit Suisse analyst Tiago Fauth who takes a bullish stance on COGT shares. He writes, “We believe the company’s current market cap undervalues the overall long-term outlook for Viridian, underpinned by: (1) a lead asset with well-characterized safety, pharmacokinetic/ pharmacodynamics (PK/PD), a validated mechanism of action, and the potential for differentiated efficacy/dosing regimen; (2) a validated multibillion-dollar end market; (3) multiple opportunities for a potential best-in-class subcutaneous product; and (4) strong balance sheet offering visibility into registrational data points.”
At the bottom line, Fauth rates VRDN as Outperform (i.e. Buy), and his price target, set at $51, suggests an upside of ~75% by the end of 2023. (To watch Fauth’s track record, click here)
Some stocks make a roundly positive impression on Wall Street’s analysts, and VRDN is one of those. This biopharma company has a unanimous Strong Buy consensus rating, based on 11 recent positive reviews. (See VRDN stock forecast on TipRanks)
CNH Industrial N.V. (CNHI)
The next Credit Suisse pick we’re looking at is CNH Industrial, a player in the agriculture and construction service and equipment fields. The UK-based company provides world-class heavy equipment for large-scale farming and construction, along with R&D capabilities and strategic direction. CNHI operates through several subsidiaries, and known for holding major brand names in its field, including Case IH, New Holland, and Steyr.
The company finished 3Q22, the last reported quarter, with consolidated revenues of $5.88 billion, for a 23% year-over-year gain, while net income rose 21% y/y to reach $559 million. At the bottom line, the diluted EPS of 41 cents represented a y/y gain of 20%, and beat the forecast by 24%. CNHI saw $272 million in net cash from operations during the quarter.
The agricultural segment proved stronger than construction during the past year, with agriculture accounting for $4.5 billion of Q3’s net sales, a gain of 26% from the prior-year quarter. Construction sales, at $895 million, were up 16% y/y.
Fluctuations in currency valuations helped make 2022 a tough year for CNHI, but despite the foreign exchange headwinds, the company is predicting a 16% to 18% full-year gain in net sales for industrial activities.
Covering CNHI for Credit Suisse, 5-star analyst Jamie Cook likes what he sees in the company’s prospects for continued growth.
“By 2024, CNHI targets Industrial Activities net sales of $20- 22B, representing a ~6% CAGR, and adjusted EBIT margins of 12-13%. CNHI expects to gain market share by more than 200bps over the three-year planning period (2022-24), driven by new product launches, and assumes minimal volume growth from the Farm Equipment market. Given our bullish view on AG fundamentals and our view that Precision AG is accretive to margins, we believe CNHI’s targets are reasonable and have potential upside,” Cook noted.
Cook’s optimism backs up her Outperform (i.e. Buy) rating on CNHI, while her $21 price target shows her confidence in a 30% one-year upside potential for the shares. (To watch Cook’s track record, click here)
Overall, CNHI has 12 recent analyst reviews on record, and their 9 to 3 breakdown, favoring Buys over Holds, gives it a Strong Buy consensus rating. (See CNHI stock forecast on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
