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Morgan Stanley: These 2 stocks are about to increase by at least 30%
Markets attempt to unravel a series of conflicting forces. There’s the uptrend, which has been pushing stocks higher since last summer, which in recent weeks has been partially derailed by inflation fears. There is the massive fiscal stimulus from the legislative COVID relief plans, which are helping to fuel this inflationary pressure, but there is also the ongoing vaccination program which promises a return to more normal conditions. Morgan Stanley Chief US Equity Strategist Mike Wilson has been following recent stock market ups and downs and sharing the benefits of his experience. “We see two potential risks to think about … First, the risk associated with a sharp rise in interest rates as bond markets are only catching up to what the prices of other assets are already reflecting. Second, there is the risk that some of the positive operating leverage we have seen in corporate earnings reports will start to reverse, ”Wilson noted. Shifting from a big picture to a narrower view, Wilson adds, “In this macro context, we continue to favor areas of the market at reasonable prices …” Taking into consideration Wilson’s outlook, analysts at Morgan Stanley is hammering the board on two stocks, with these pros seeing at least 30% upside potential in stores. By running the tickers in the TipRanks database, we wanted to know exactly what makes them so compelling. TPI Composites (TPIC) We will start in the green energy sector, where it connects to manufacturing. TPI Composites is a manufacturer of composite materials and has applied this specialist knowledge to manufacturing wind turbine blades since 2001. In 2019, the latest year with full data available, TPI processed 18% of all onshore wind turbine blades sold. in the world. megawatt base. The company saw its net sales in 2020 reach $ 1.4 billion, selling more than 9,500 blades. In its recent release of 4Q20 results, TPI released results for the quarter and for last year as a whole. The results were strong, far exceeding expectations, but the stock fell again sharply. A look at the data sheds some light. In the quarter, TPI reported revenue of $ 465.6 million and EPS of 14 cents, compared to expectations of $ 450 million at the top line and EPS of 12 cents. Quarterly sales increased 10% year over year. At the same time, the strong sales growth for the year was not enough to offset the losses suffered at the height of the corona crisis in Q1 and Q2. The company ended the year with a GAAP loss of 52 cents per share. Also on the negative side of the ledge, the forecast puts 2021 sales in the $ 1.75 billion to $ 1.85 billion range – this will put 2021 annual growth at about half of what analysts were hoping to see. . Morgan Stanley analyst Laura Sanchez considers the company to be fundamentally sound and writes: “We see upward biased risk-reward, driven by robust wind installations on a global scale, with market dominance being given TPI’s global footprint, growth in the transportation sector and a path to expanding margins… We also note that TPIC offers investors a unique way to play secular growth in global wind markets and electric vehicles without exposure to other sectors, generally industrial. To that end, Sanchez rates TPIC an overweight (ie buy), and his price target of $ 77 implies a ~ 54% hike in the coming year. (To look at Sanchez’s track record, click here) Wall Street analysts generally agree that this is a stock to buy. Of the 10 recent ratings shown here, 7 are buy and 3 are hold, making the consensus rating a moderate buy. The average price target of $ 63.10 suggests a 28% year-over-year increase from the current price of $ 49.60. (See TPIC stock market analysis on TipRanks) Carvana Company (CVNA) From industry and green energy we move to global online sales, where Carvana has grown into a major used vehicle seller, bringing a new twist to online vehicle shopping. The company works from a chain of 23 semi-automated vehicle storage offices and garages across the continental United States, from which it allows customers to test vehicles and pick up their purchases. In the fourth quarter of 2020, Carvana sold 72,172 vehicles, an increase of 43% year-over-year. Sales generated more than $ 1.8 billion in total revenue, an increase of 65% year-on-year. The company’s gross profit for the quarter, $ 243.9 million, was up 71% from the quarter last year. These strong indicators were also observed at the full year level. The 244,111 cars sold in 2020 represented a 37% year-over-year sales increase, while $ 5.587 billion in annual revenue was up 42% year-on-year and gross profits of $ 793.8 million were in 57% increase over 2019. Profit results are reflected in the company’s results. stock performance, which has shown steady growth over the past 12 months. Over this period, CVNA is up 290%. It’s an impressive payoff, which caught the eye of Morgan Stanley analyst Adam Jonas. “In our opinion, CVNA’s moat consists of: 1) first-mover advantage, 2) brand awareness, 3) a strong national logistics network, 4) fully online transaction capabilities to buy cars , sell cars, while providing online financing and warranty options for customers, 5) a less expensive and capital intensive business model, 6) strong customer service and 7) the ability to leverage its platform in the ancillary business sectors, which gives it great ability to increase. Jonas sees CVNA as his “premier auto retailer” and rates the stock as overweight (ie buy). In addition, the analyst gives CVNA a price target of $ 420, which implies a rise of 31% from current levels. (To watch Jonas’ history, click here) The recent appreciation in Carvana’s stock has pushed the stock price to $ 321.25, slightly above the average price target of $ 314. That hasn’t stopped Wall Street analysts from giving the stock a high rating, as the analyst consensus rating is a strong buy, based on 16 recent reviews that include 13 buys and 3 takes. (See CVNA Stock Analysis on TipRanks) To get great ideas for stocks traded at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks. 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.
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