The second half of the year is now in full swing and comes after 6 surprisingly strong months for the stock market. The first part was defined by the banking collapse that followed the narrowly averted debt-ceiling crisis. And all the while, talk of an impending recession swirled in the background.
However, despite these concerns, the markets rebounded. As inflation continues to show signs of bottoming out, many economists have begun to tout the idea that if a recession does occur, it will be relatively tame.
Although August saw some weakness in the market, if history holds, Jacob Manoukian, head of US investment strategy at JP Morgan, believes that the rest of the year looks very promising.
“Usually a strong first half of the year begets a strong second half,” Manoukian said recently. Since 1950, when Standard & Poor’s 500 It rose more than 10% in the first half of the yearAnd The index’s average gain in the second half of the year was another 10%. Second half returns after a strong first half were better when the prior year was negative.”
So, with this positive outlook, the question is, which stocks should investors be carrying at the moment? JPMorgan analysts have been busy researching these names and have hosted two that they believe make good additions to a portfolio in this environment. And they are not alone, according TipRanks databaseBoth are also rated “Strong Buy” by the analyst consensus. Let’s see why they are being praised across the board.
Procor Technologies (PCOR)
It’s no secret, the year’s rise was driven by the technology sector, and this is where the first JPMorgan-backed name is located. Procore Technologies is a software company with a unique selling point. Focused on the construction industry, it offers construction management software that revolutionizes the way construction professionals collaborate, communicate, and manage projects.
Procore’s comprehensive platform offers a wide range of tools and features, including project management, document control, financial management, quality and safety management, and resource planning, all rolled into one cloud-based solution.
The construction industry is at the cutting edge of the digital revolution and ready for disruption. Procore has capitalized on this and has steadily increased its revenue over the past few years. This was the case again in the recently reported edition of Q2.
The company had revenue of $228.5 million, representing a 32.7% year-over-year increase and beating expectations of about $10.52 million. characteristic. Earnings per share of $0.02 came in much higher than the -$0.09 that analysts had expected. As for the outlook, third quarter revenue is expected to be in the $232 million to $234 million range, above expectations of $231.79 million, a year-over-year increase of 24% to 26%.
Alexei Gogolev, an analyst at JPMorgan, believes there is a lot to admire here. He writes, “We continue to like Procore because it sits within a group within our vertical software coverage, which is able to remain relatively insulated from weaknesses in the core market it serves… Procore is well positioned because it automatically operates among the lowest digital software industries in the global economy.” On the periphery, opportunities are prepared – such as payment confirmation and insurance solutions – to provide competitive services that will become additional products for cross-selling and increase it to customers … “
“With nearly 50% of sales being spent on sales and marketing, Procore is still going strong with more markets to capture and therefore seems uninterested in converting EBIT into positive long-term earnings,” Gogolev said. near”.
These comments support Gogolev’s Overweight (i.e. Buy) rating while the $85 price target suggests a one-year stock appreciation of 27%. (To watch Gogolev’s record, click here)
Overall, the Strong Buy consensus rating shows that Wall Street generally agrees with JPMorgan here. PCOR has 12 analyst reviews on file, including 11 Buys and 1 Hold. At $82.45, the average indicates that shares will rise 23% over the coming months. (be seen PCOR stock forecast)
vector scorpion (Sting)
Let’s now move from construction programs to the shipping business. Scorpio Tankers is a leading shipping company specializing in the transportation of refined petroleum products and bulk commodities. The Monaco-headquartered company is a significant player in the global shipping industry with a fleet consisting of modern vessels, including environmentally friendly tankers designed to meet environmental standards. The company serves a mix of clients from major oil companies, traders and government agencies around the world, and through strategic fleet expansion and technological advancements, has been able to remain competitive and provide reliable shipping solutions.
Volatility is the hallmark of the global oil shipping industry, with frequent fluctuations in rate and revenue due to shifts in oil supply and demand, geopolitical events, and economic conditions. These issues affected the company’s performance in the second quarter.
Revenue fell 18.7% year over year to $329 million, at the same time missing consensus estimates of $14.83 million. And while the company has shown the ability to navigate a complex landscape and turn a profit, EPS of $2.41 fell just shy of Street’s forecast of $0.08.
However, despite the mistakes, investors reacted positively to the results. This isn’t much of a surprise to JPMorgan analyst Sam Bland, who, according to management’s commentary, thinks the outlook looks favorable for Scorpio.
Seasonally August is usually a weak month. However, we are seeing signs that rates are starting to improve, with STNG now reporting LR2 rates above $40,000 per day, and MR above $30,000. To some extent, this improvement appears to be driven by sentiment, around improved macro future views, as opposed to any actual improvement in demand/supply,” Bland explained. Although it may not be linear, we expect a general upward movement in prices over the coming months, driven by seasonality and expected increases in demand. Supply/demand is likely to improve further in 2024, and possibly also in 2025.”
Accordingly, Bland has an Overweight (i.e. Buy) rating on Scorpio Tankers stock in line with its $85 price target. Inclusion for investors? Up 69% from current levels. (To watch Bland’s record, click here)
Overall, 3 more analysts join Bland in the bullish camp, and not a single fence addition can detract from the Strong Buy consensus rating. Forecasts are for 12-month returns of 36%, bearing in mind the average target stands at $68.40. (be seen STNG stock forecast)
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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.