From escalating tensions between the U.S. and China, the highly infectious coronavirus pandemic outbreak, and the 2020 presidential Election, this year has turned into a rollercoaster ride for investors. Forced lockdowns weighed down industries like the oil & gas sector, retail businesses, theatre, and entertainment companies, but spurred an uptick in technology stocks.
With Pfizer Inc. PFE and Moderna Inc. MRNA reporting high efficacy for their COVID-19 vaccines but the number of new virus cases getting reported remaining high, the analysts are expecting a change in market behavior as the world moves to what they describe as a post-COVID-19 world.
CNBC compiled a list of five stocks with an upside potential based on opinions from leading Wall Steet analysts. Here’s a peek into these stocks and the key factors influencing the analyst forecasts.
Amazon: The pandemic might have shrunk the global economy, however, Jeff Bezos’ Amazon Inc AMZN rose to cross the $1.5 trillion market cap. The e-commerce company’s stock peaked at a 52-week high price of $3,552.25 in early September.
Amazon stock grew approximately 63% on a year-to-date basis and close to 91% since March when the signs of a pandemic became evident.
Last week, Needham analyst Laura Martin rated Amazon as a buy — setting a price target of $3,700, according to TipRanks. Based on Martin’s survey results of a select number of Amazon customers, CNBC reported that 80% of the survey participants would stick to their online shopping trends even during the post-pandemic era.
In the Q3 earnings release in October, Amazon reported $96.1 billion in revenue at a 37% growth rate year-over-year. Amazon last quoted $3,099.40, 0.57% lower, on Friday.
Bentley Systems: RBC Capital analyst Matthew Hedberg revised software company Bentley Systems Inc BSY as a “Buy” stock last week, with a price target of $43, CNBC reports. “Overall, we think a vaccine could benefit Bentley, and a Biden presidency could boost U.S. infrastructure spending,” Hedberg commented.
The forecasts were based on the company’s earnings beat in its first release since the trading debut in September. In Q3, Bentley’s $203 million quarterly revenues recorded a growth rate of 8.8% YoY with an 11% YoY growth in recurring revenues for the trailing 12-month period.
The company, on Nov. 12, announced plans to issue 10 million shares at $32 per share and use the proceeds to pay off the outstanding balances of credit facilities. From $25.18 on Sept. 22, the stock has gained 41% and was last seen trading at $35.55, 1.22% higher.
PDF Solutions: San Jose-based software and engineering services company PDF Solutions Inc PDFS received a Buy rating from the Northland Capital analyst Gus Richard after the news of the $35 million Cimetrix acquisition broke out, as per the CNBC report. Richard raised the stock’s price target to $30, last seen quoting $21.28.
Richard says that “PDFS/ Cimetrix together can allow equipment suppliers to collect operational data from equipment and use PDFS big data analytics platform and AI to analyze equipment operational, performance, and process control data”, as reported by CNBC.
Accounting for the acquisition impact in the post-pandemic economy, Richard also anticipates that CY21 earnings could gain between $0.02 and $0.04 per share.
Cytokinetics: At the end of Friday’s trading session, Cytokinetics, Inc. CYTK was trading at $15.99, 0.95% higher. H.C. Wainright & Co analyst Joseph Pantginis predicts that the biopharma company’s stock holds a 180% upside potential, with an estimated price target of $43.
The analyst’s forecasts are pinned on the success of omecamtiv mecarbil, the company’s treatment for heart failures.
“While a deeper analysis is yet to be conducted and more details are needed to clarify omecamtiv’s real opportunity in HF, we believe these findings suggest a possible path forward for omecamtiv’s approval based on its applicability for the treatment of a defined, significant, population," Pantginis said, as per CNBC.
Yelp: Yelp Inc YELP, the San-Francisco headquartered online review company, has lost around 7% year-to-date. But, since March 18, when the lockdown measures began to kick in, the stock has rallied upwards by 123%.
RBC Capital analyst Shweta Khajuria's analysis of the stock’s performance is based on the economic revival in the post-pandemic era. Linking the vaccine availability and distribution with the economic revival, the RBC Capital Analyst opines that shopping centers, restaurants and bars, and other retail outlets would witness an increase in footfalls.
“Management expects Yelp to drive greater benefits from the improvement in its value proposition to advertisers, both perceived and actual to take a greater share of Advertiser budgets,” CNBC quoted Khajuria as saying.
On Friday's close, Yelp had a market cap close to $2.4 billion and was trading at $32.22, 1.19% higher.
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