Did the stock market mark a formal bottom last week? That is what investors are wondering now that the Dow Jones Industrial Average rose more than 1,000 from the bottom just a week earlier. What we know and have been shown yet again is that investors want to buy the pullbacks. They want to buy value stocks, the best growth stocks and stocks that may have more upside than the market in general.
24/7 Wall St. reviews dozens of analyst upgrades and downgrades each day of the week, and this becomes hundreds of reviews over the course of each week. Our goal is to find hidden value and to find new trading or investing ideas for our readers. Many of these analyst calls cover stocks to buy, and some of those come with significant upside calls.
Traditional Buy and Outperform ratings in Dow or S&P 500 stocks come with upside projections of 8% to 15%. Other more aggressive calls can come with far more upside of 25%, 50% or even 100%. Investors have to consider risk and reward here, and they have to know that an analyst calling for 50% or 100% upside is taking a much higher risk than normal.
This last week brought up many analyst calls with huge upside. Some of that is simply because stocks have pulled back so much from 2015 or 2014 highs. Still, many analyst calls are just aggressive due to explosive growth, likely turnarounds or special situation investing opportunities.
24/7 Wall St. tracked eight calls in which analysts called for upside of 50% to 100% this past week. Many of them are in large cap and well-known stocks, rather than in obscure micro caps. Among them are Bluebird Bio, Dish, Mallinckrodt, Nabors, Otonomy, SunEdison, Twitter and Azure Midstream.
In an effort to keep some of the risks present in each company, 24/7 Wall St. even tried to highlight a negative or show how much more aggressive each call is versus peers. After all, we don’t want you thinking we believe that analysts are omniscient or that the future has been set. Here are eight fresh analyst calls from the past few days with upside projections of 50% to 100%.
This stock may have fallen handily this past week, but Morgan Stanley sees a very attractive entry point in Bluebird Bio Inc. (NASDAQ: BLUE) for patient and risk-tolerant investors. The firm raised its rating to Overweight from Equal Weight, and the price target was set at $143.00 in the call. Bluebird’s prior close was $94.07, and shares were just under $89.00 on Friday’s close, versus a $29.73 to $197.35 range over the past 52 weeks.
We would point out that insiders sold shares this week, but that may be expected as they were under a 10b5-1 scheduled sale plan. Bluebird Bio’s consensus analyst target is still closer to $200 and it has a $3.2 billion market cap.
Deutsche Bank started Dish Network Corp. (NASDAQ: DISH) as Buy on Thursday, and the firm’s $92.00 price target was roughly 50% higher than the prior $61.04 closing price. Shares were up at $62.56 on Friday’s close. The driving force here was an attractive risk-reward profile, but with the hint of an acquisition for its enviable mid-band wireless spectrum portfolio, potentially by Verizon, AT&T or T-Mobile. It noted a lease could be in the works too.
Deutsche Bank sees Dish Network’s potential value at $44 billion, with even more potential upside if the spectrum is monetized tax efficiently. Just keep in mind that Dish’s consensus price target is just under $74.00.
Oppenheimer had a very solid view of Mallinckrodt PLC (NYSE: MNK) earlier this week, with an Outperform rating and a $138 price target. That was more than 100% higher than the $66.73 price on Friday’s close and over $30 higher than the consensus target price of $106.85. Mallinckrodt set 2016 guidance at $7.70 to $8.20 in earnings per share, but the firm said that there may be an upward surprise and there remains conviction around Acthar’s longevity.
Recent acquisitions, future mergers and acquisitions, and share buybacks were among the other drivers for such an aggressive call here. Keep in mind that Mallinckrodt’s 52-week range is $56.57 to $134.26, and Oppenheimer has the most aggressive views and highest price target of all analysts covering it.
Nabors Industries Ltd. (NYSE: NBR) was among three Deutsche Bank oil services stock picks that it thought could still double. That being said, Nabors posted solid earnings for second quarter back in the summer, and Deutsche Bank likes its diverse group of rigs by type and by geography.
Deutsche Bank’s call was more of a grouped one rather than a news break, but its price target of $20.00 for the stock is about $6.00 higher than the consensus analyst price target. Nabors had previously closed at $10.37 ahead of the call, but its stock ended the week just short of $12.00.