The post-election rally seems to have hit a pause in March, but investors have to consider many issues for what may come in 2017. Stocks are still up in 2017, and 20,000 on the Dow Jones Industrial Average turned into 21,000 before the recent trading. Investors have to consider that the bull market is now over eight years old and that a correction might not be a bad thing. The one thing that has held steady for years is that investors, for greatly differing reasons at each turn, have piled in and bought stocks on every single sell-off. Those same investors are also continuing to look for new opportunities for gains and income.
24/7 Wall St. reviews dozens of analyst research reports each day of the week, which is hundreds of analyst calls reviewed each week. The goal is to find new investing and trading ideas for our readers. Some of these analyst calls are far more aggressive than others. We have tracked seven such analyst calls during the month of March in which analysts project upside of 50% or 100%, or even exponential upside.
Before investors automatically jump on board here, some serious considerations and a reality check need to be made. For starters, just because an analyst says that a stock is cheap, has incredible value or is going to surge, it does not mean that it is an assured outcome. Many analysts end up having had the wrong assumptions, and sometimes their firms may be involved in or seek to be involved in helping these companies raise money — and collecting potentially millions of dollars in fees in the process.
The state of analyst calls in 2017 is quite different from in years past. Analysts making new Buy or Outperform ratings in Dow or most S&P 500 stocks call for upside targets of 8% to 15%. So if you see upside calls of 50% to 100% (or exponential upside), then you better know going in that you are looking at much riskier stocks than normal.
24/7 Wall St. has provided the dates in March for each of these analyst calls. They also have color on what drove the upside and trading history. In some cases, if applicable, we also have provided a view of a more cautious side of the coin or pointed out if a firm recently helped one of these companies in raising capital (and collecting an underwriting fee of course). After all, we wouldn’t want you thinking we automatically believe all analyst calls just because an analyst makes a bold projection.
Here are seven analyst calls from the month of March 2017 in which the price targets would imply 50%, 100% or even exponential upside.
Aqua Metals Inc. (NASDAQ: AQMS) was reiterated as Outperform at Oppenheimer on March 13, but the price target was raised to $34 from $16. Its prior closing price of $19.71 offered implied upside of close to 70%, if Oppenheimer’s thesis proves to be right. The call was based on 22 times the 2021 estimate of $2.36 earnings per share (EPS), and then discounted three years at 15%. The call was after recent filings and in light of its strategic agreement with JCI. Aqua Metals is not a well-known company at all, and its market cap is less than $350 million. The company engages in the business of recycling lead, and its AquaRefining process is to recycle lead acid batteries.
Cytokinetics Inc. (NASDAQ: CYTK) was started as Buy and assigned a $25 target price at Rodman & Renshaw on March 8, more than 100% higher than the prior day’s $11.50 closing price. Cytokinetics was indicated up 4% at $11.99 after the call, but it was last seen trading at $12.60 on Friday. Cytokinetics has a 52-week trading range of $6.31 to $13.70. It is targeting ALS and spinal muscular atrophy.