In recent weeks, market sentiment has undergone a remarkable turnaround. According to a recent survey by the American Association of Individual Investors (AAII), bullish sentiment has reached ~45%, marking the highest level since November 2021.
This has been reflected in the market’s movement, as more than 55% of stocks in the S&P 500 are currently trading above the 50- and 200-day moving averages.
Larry Adam, chief investment officer of Raymond James, adds his view, saying: “Given the improved earnings outlook in the second half of 2023 and an economy that defies recessionary forecasts, it’s no surprise that both the Nasdaq and the S&P 500 have officially entered a new bull market. “.
However, Adam advises investors not to get too excited. “While history is on the market’s side — the S&P 500 historically rose more than 40% in the first year of a bull market and is up nearly 14% one year after the Fed ended its tightening cycle — the uptick in bullish sentiment and “overbought” conditions suggest However, caution may be warranted in the near term.
However, this does not necessarily apply to all stocks. Raymond James analysts are still pointing to names poised to rally from here – they’ve identified a couple of stocks as Strong Buys in the current environment. We ran these pointers through TipRanks platform Let’s also see how they fare among other Wall Street stock experts. Let’s check the details.
disc medicine (iron)
The first Raymond James-backed name we’ll look at is Disc Medicine, a biotechnology company focused on discovering and developing new therapies for blood diseases. Disc medicine is dedicated to addressing the important unmet medical needs of patients with serious blood disorders by targeting the biology of disc-shaped red blood cells.
The company’s strategic approach centers around targeting pathways that have a direct impact on the development of red blood cells, also known as erythropoiesis. The programs are specifically designed to regulate two essential processes that are critical to the proper functioning of red blood cells: heme biosynthesis and iron metabolism. By manipulating these essential components of erythropoiesis, disc medicine programs have the potential to treat a wide range of blood diseases.
Meanwhile, the company continues to make progress in its pipeline and provided an update earlier this month. Glycine Medicine provided preliminary data from the ongoing Phase II BEACON study, which is evaluating pituitarytin, an orally administered glycine transporter 1 (GlyT1) inhibitor indicated for the treatment of patients with erythropoietic protoporphyria (EPP) and X-linked protoporphyria ( xlp). Data obtained to date demonstrate consistent decreases in PPIX levels, marked improvements in reported sun tolerance, and positive progress in measures of patients’ quality of life assessment.
The drug may need to be shown to work on a larger scale, but Raymond James analyst Danielle Brill thinks the results so far are very promising.
“Although the data set is small, we believe it provides convincing evidence that pituitary disease modulates EPP potential,” she said. Importantly, pittopretin demonstrated (1) dose-dependent reductions in PPIX (>30% at both doses), (2) significantly increased light tolerance versus baseline, and (3) clean safety, with no significant decrease in Hemoglobin levels versus baseline… In our view, the results to date tick all the boxes, and provide a strong proof-of-concept for pittopretin as a functional treatment for EPP.”
“Because we are convinced that the Ph 2 RCT data set (expected early next year) will provide definitive evidence of biopertin’s disease-modifying effects in EPP, we are changing our rating to Strong Buy,” Brill added.
This is an upgrade from Outperform’s previous rating (i.e. Buy), and with a price target now at $75 (up from the previous $50), Brill sees the shares yield returns of about 42% over the next year. (To view the Braille log, click here)
Brill’s Take gets the full support of her colleagues. Based on Buys alone — 9, in total — the stock claims a Strong Buy consensus rating. Still, shares have been on a huge run lately, and after up 166% year-to-date, the average target of $57.13 lends itself to a further upside of just 8%. (be seen Disk medicine stock forecast)
dish grid (Dish)
Let’s now shift our focus to a completely different industry for our next Raymond James pick. DISH Network is a major player in the field of digital television entertainment services. Headquartered in Englewood, Colorado, this company ranks prominently as one of the largest pay-TV providers in the United States, thanks to its direct-to-home (DTH) offerings. In addition to satellite provider Dish and Streaming service Sling TV, DISH Network boasts significant spectrum holdings and is actively building a leading 5G network nationwide. Most notably, it is the first-ever standalone (SA) 5G network based on an open wireless access network (RAN).
According to a recent update, 5G service is now available to more than 70% of the US population. This is such a huge achievement for the company that the FCC required that goal be reached as part of the deal that allowed T-Mobile to buy Sprint.
However, not everything has been smooth sailing lately. Dish’s recent performance in Q1 left a lot to be desired. On the back of subscriber losses, revenue fell 8.5% year-over-year to $3.96 billion, while also missing the consensus estimate by $100 million. Similarly, at the other end of the scale, earnings per share fell from $0.68 in the year-ago period to $0.35, which is lower than the $0.39 expected on the Street.
Although the overall market performance was positive in 2023, DISH has seen a significant decline of 53% year-to-date. As Raymond James analyst Rick Prentice notes, there are other issues the company must grapple with. However, the fact that it hit the aforementioned 5G milestone is a big deal and could lead to a shift in sentiment.
Given the significant contraction in DISH’s debt and equity since the beginning of the year, along with the large increase in interest rates in 2022 and 2023, any financing is likely to be very costly for the company. But we feel that achieving the 70% deadline, along with a pause in construction capex and a significant reduction expected in the Carrier Services Agreement (TSA) with T-Mobile, should significantly reduce burn rate, and improve near-term cash flow profile. Hopefully, it will help lower the company’s cost of capital,” Prentice noted.
To that end, Prentiss has rated DISH stock a Strong Buy, supported by the $21 price. This means that the shares will rise by 217% over the coming months. (To watch Prentice’s track record, click here)
Overall, taking the street is showing mixed signals. On the other hand, the stock only claims a hold consensus rating, based on 7 Holds, 4 Buys, and 1 Sell. However, most of them seem to believe that the shares are undervalued; At $15.45, the average target gives way to 1-year returns of 133%.. (be seen DISH 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.
