We’ve reached the fourth quarter, and investors are positioning their portfolios for next year. As always, the key is to identify stocks that are poised to deliver strong returns, and Bank of America has highlighted solid options for those looking for high-growth opportunities.
Bank of America analysts do not limit their focus to just one part of the market; They look across sectors in a variety of stocks – looking “under the hood” to find stocks ready to jump.
With that in mind, we turned to TipRanks’ database to review two of Bank of America’s latest stock picks, both of which represent a strong uptrend — including one with a potential gain of about 390%.
In fact, the banking giant isn’t the only one backing these names; Both stocks are rated as “strong buys” according to the broader analyst consensus. Let’s take a closer look and find out what optimism is.
Werewolf treatments (howling)
We’ll start in the world of biotherapeutics, where Werewolf Therapeutics is developing new immunotherapy drugs specifically designed to reduce common and severe side effects often associated with cancer treatment. The company has created a proprietary development platform, known as PREDATOR, to engineer conditionally active molecules that stimulate adaptive and innate functions of the immune system. Through this approach, Werewolf has successfully developed two drug candidates for clinical trials.
Both products are INDUKINE molecules, a proprietary development, designed to activate selectively in tumor tissue while remaining inactive in peripheral tissue, a feature intended to minimize the occurrence of unwanted off-target effects while maximizing the anti-tumor immune response. Werewolf’s goal is to create anti-cancer drugs with higher tolerability levels than current treatments.
Werewolf’s lead drug candidate, WTX-124, is being developed to treat solid tumors and is under investigation as monotherapy and in combination with Keytruda. The company is enrolling patients in the first phase of an open-label, multicenter study – the first human trial of the drug. At ASCO’s annual meeting in June 2024, the company shared new interim results from the monotherapy dose-escalation arm, along with early data from the combination arm. The latest data shed light on the clinical activity of WTX-124 and its overall tolerability by patients. Dose escalation in the combination study arm continues, and data is expected to be updated by the end of the year.
The company’s second candidate, WTX-330, is focused on treating advanced or metastatic solid tumors as monotherapy. Early data from the phase 1 trial, which was also presented at ASCO, showed promising results in patients with advanced solid tumors or non-Hodgkin lymphoma. Werewolf plans to release more updates later this quarter.
Although the share price is down 47% this year, could this represent a major buying opportunity? Jason Szymanski, a five-star analyst at Bank of America, certainly thinks so.
“Despite the arguably positive conference, Werewolf Therapeutics shares have been under pressure since ASCO. In our view, this had nothing to do with concerns about the WTX-124 data, which arguably added support to the encouraging, albeit early, clinical profile. Instead, we believe the decline was driven more by competitive concerns regarding the size and duration of responses.124 We recognize the concerns but feel they are overblown; beyond the caveats related to comparing (particularly) early-stage efficacy data, we believe investors are overlooking the more important safety updates. Which not only differentiates Werewolf’s IL-2 assets, but also serves to validate its platform – the key value driver of the story, in our view,” the analyst said.
Looking ahead, Szymanski sees strong potential for investors, saying: “Ahead of a rich catalyst 12 months – many of which are capable of reratings – we see compelling near-term upside potential and opportunity on weakness.”
Combined, these comments support Zemansky’s Buy rating on HOWL, while his $10 price target suggests an impressive 390% upside potential over the next 12 months. (To watch Szymanski’s record, click here)
Overall, there are 4 recent analyst reviews on record for Werewolf, all of which are positive, resulting in a unanimous Strong Buy consensus rating. Shares are priced at $2.05, with an average price target of $12.50, which is even higher than Bank of America’s call, suggesting a potential gain of ~510% over the next 12 months. (See HOWL Stock Forecast)
Ibotta company (EBTA)
From biotech, we’ll move to consumer technology with a look at Ibotta, a shopping rewards company. Headquartered in Denver, Colorado, Ibotta provides and operates a direct-to-consumer app that allows shoppers to claim cash back rewards on a wide range of online and in-person purchases. The app makes it easy for users to claim rewards almost anywhere. A long list of retailers participate, primarily grocery stores, including major names such as Publix, Dollar General, Costco, Jewel-Osco, Kroger, Meijer, Walmart and Whole Foods. Beyond the grocery sector, chains such as Home Depot, Lowes, and Kohl’s are also participating, as is Amazon.
Ibotta was founded in 2011, and earlier this year, after 13 years in business, the company entered the public markets through an IPO. The public offering saw 6.56 million shares put on the market by both the company and several private shareholders, at an initial price of $88 per share. This price was well above the IPO’s estimated range of $76 to $84. In total, the event raised $577 million. Ibotta directly sold 2.5 million shares, generating proceeds of $220 million.
Since going public, Ibotta stock has fallen approximately 32%. In response, the company began a $100 million stock buyback program in August to help support the stock price.
On the financial side, Ibotta has released two sets of earnings results since its IPO. The most recent, released in August and covering the second quarter of 2024, showed a top line of $87.9 million, up nearly 14% year over year and beating expectations by $2.15 million. On the bottom line, the company’s non-GAAP earnings per share of 68 cents per share were 5 cents per share below expectations.
In his coverage of this stock for Bank of America, analyst Curtis Nagel sees this stock as a potential growth opportunity for investors. He discusses the company’s broad footprint in its niche, noting: “As CPG brands focus on ways to efficiently deliver value to consumers and increase volumes, we see Ibotta as a major beneficiary. Ibotta works with approximately 2,400 brands and is the offering company.” The only digital promotion that provides full funnel attribution (linking a purchase to person, place, time, etc.) and only pays when a promotion leads to a purchase. We consider Ibotta a very attractive alternative to other forms of marketing and promotions where ROAS is difficult to measure.”
Nagle continues to rate IBTA a Buy, and supplements with a price target of $110 that suggests a roughly 64% upside in the stock over one year. (To view Nagle’s track record, click here)
Overall, this new public stock has earned a Strong Buy analyst consensus rating by getting 6 positive reviews from the Street. The stock is priced at $67.19, and the average price target of $101.17 implies a one-year upside potential of ~51%. (See IBTA 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.