1664749499 Equities keep looking cheaper says JP Morgan Here are 2

“Equities keep looking cheaper,” says JP Morgan; Here are 2 names to consider

The stock market is often a reverse psychology game. That said, when sentiment gets too euphoric, it’s often a sign that it’s time to sell. When the mood hits the skids, it could be the ultimate signal that it’s time to load the truck. And on that subject, JP Morgan’s Marko Kolanovic believes we’re at – or at least close to – bottom.

The firm’s global market strategist believes the Fed’s hawkish stance has left shares “very oversold” and while inflation remains persistently high, it is nearing its peak.

“Meanwhile,” Kolanovic added, “some conditions are being set for a market bottom.” What is that? Well, shares are looking “increasingly cheap” while positioning is “extremely depressed.”

With that in mind, Kolanovic’s fellow analysts have spotted two names at the banking giant that they think are cheap at the moment – they both see some healthy gains in the coming year. We ran the tickers through the TipRanks platform to see what the rest of the street had in mind for them. Let’s check the results.

Leading Actor Therapeutics (PTGX)

A rapidly expanding area of ​​the biotech sector is peptide technology, which focuses on the components of proteins as a means of treating disease. Using its own proprietary platform, Protagonist Therapeutics develops innovative peptide-based medicines to address unmet medical needs.

The Company’s pipeline includes two separate research tracks, one focused on hematology and blood disorders and one focused on the treatment of inflammatory and immunomodulatory diseases.

The latter arm includes PN-943, for which the company announced top-line data from a Phase 2 study in ulcerative colitis back in April. The company is now planning the phase 3 study. There is also PN-235, an IL-23R antagonist discovered by Protagonist and being developed in partnership with Janssen. Four clinical trials are currently ongoing, including two phase 2 trials in moderate to severe plaque psoriasis.

The story goes on

But it’s the lead candidate in the hematology and blood disorders program, rusfertide (PTG-300), which is in the most advanced stages of development. The lead product is indicated for the treatment of polycythemia vera (PV), a rare blood disorder defined by an abnormally high red blood cell count. The Company is currently enrolling participants in the Phase 3 VERIFY study, a process it hopes to complete by the end of 1H23.

Although there are some treatment options for PV, there is still a significant unmet need to keep patients’ hematocrit percentage below 45% to reduce the risk of cardiovascular or thrombotic events. The Phase 2 trials of Rusfertide have shown promising results on this front and while there have been safety concerns surrounding the drug – a trial was put on hold for a while last year after mice developed skin cancer after exposure to Rusfertide – JP’s Brian Morgan Cheng believes these can be easily addressed.

“We recognize that Rusfertide’s safety margin is unlikely to be lifted until VERIFY’s top-line indication in 2024 (based on our estimate),” the analyst said. “We note the revised study protocol (with increased surveillance and exclusion of patients with a history of invasive cancer) that alleviates some investor concerns. As several SoCs (e.g. HU, Jakafi) have skin cancer warnings on their respective labels, we believe the potential risk, if applicable, cannot be considered a major deterrent to use. At the current valuation, we believe that Rusfertide’s leading position in PV and Hereditary Hemochromatosis (HH) is underestimated based on the data collected. Ongoing partnership with Janssen for PN-235 and seeking a partnership for PN-943 could further strengthen its liquidity trajectory beyond 2024.”

Accordingly, Cheng rates the stock as Overweight, while the $36 price target leaves room for huge 12-month gains of 327%. (To see Cheng’s track record, click here)

Wall Street largely agrees with Cheng’s prognosis; All other 4 reviews are also positive, making the analyst consensus a Strong Buy. The average price target is $33.4, which suggests shares are poised to surge 296% in the year ahead. (See Protagonist Therapeutics Stock Prediction on TipRanks)

Equities keep looking cheaper says JP Morgan Here are 2

iRhythm (IRTC)

We’ll stay in the healthcare neighborhood for our next stock, though it’s a stock with a slightly different value proposition.

With the use of wearable biosensing, cloud-based data analysis and machine learning capabilities, iRhythm aims to revolutionize the clinical diagnosis of cardiac arrhythmias. The company claims to be the first port of call for ambulatory electrocardiogram (ECG) monitoring of choice for patients at risk for cardiac arrhythmias for its ease of use and accurate data readings.

Revenue has been growing steadily over the past few years, a trend that continued when the company reported its latest results.

In Q2’22, revenue grew 25.6% year over year to $102.1 million, beating Street’s call by $1.59 million. In the bottom line, adj. Earnings per share of -$0.79 beat consensus estimate of -$0.90. The company also raised its full-year 2022 revenue guidance to $420 million at the midpoint from $415 million, a goal it reiterated at its recent investor day. iRhythm also said it expects to hit revenue in excess of $1 billion in 2027, indicating a ~20% CAGR from the mid-2022 outlook.

As competition in the space intensifies, JP Morgan’s Allen Gong believes iRhythm’s product has an edge.

“There remains a significant opportunity for longer-term monitoring to grow and represent the vast majority of the ambulatory cardiac monitoring market as traditional Holter and event monitors continue to fall out of favor, a trend that is likely to accelerate as larger players expand their Voice raise the cause,” Gong wrote. “Breaking the ties with these competitors is challenging in certain accounts, but a superior offering from Zio and its algorithm has helped it hold a ~70% market share, with physicians using the conclusions drawn from competing offerings , disagreeing up to 30-40% of the time compared to just ~1% of the time for Zio.”

To that end, the analyst rates the stocks as Overweight (ie, Buy), while its price target of $190 could yield a 51% return in one year. (To see Gong’s track record, click here)

And what about the rest of the street? Apart from 1 Hold and Sell, all 6 other ratings are Buy, making the consensus view a moderate Buy. The forecast calls for one-year gains of 37% considering the average price target is $171.5. (See iRhythm Stock Prediction on TipRanks)

1664749496 780 Equities keep looking cheaper says JP Morgan Here are 2

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is for informational purposes only. It is very important that you do your own analysis before making any investment.