It has not been a good year for growth stocks. Faced with rising inflation and the looming threat of recession, investors sought out value plays and parking spots. High dividend yields and dollar strength do the trick.
In the race for safety, a number of growth stocks are being left behind and offering significant rewards to investors willing to take risks and wait. JP Morgan analysts Bill Peterson and Mahima Kakani have identified three top picks in the transportation and transportation fuels industry that they believe are well positioned for long-term success.
In a note to investors Thursday morning, analysts review their overweight ratings and price targets on electric vehicle (EV) charging company ChargePoint Holdings Inc. (NYSE:CHPT), advanced battery maker Enovix Corp. (NASDAQ: ENVX) and hydrogen fuel supplier Plug Power Inc. (NASDAQ: PLUG).
All three received a temporary boost from the Cut Inflation Act, but the glow faded quickly for Enovix and Plug Power. Both are now trading slightly lower than before it became clear the Biden administration had the votes to pass the legislation. Enovix jumped over 70% in August and managed to hold on to around half of that gain. Still, JP Morgan analysts believe that “these stocks can outperform over the next few months with a likely unhindered demand profile, even if we enter a recession later this year or next year.”
ChargePoint went public in March 2021 through a SPAC merger, and the stock has fallen around 48% since then. It hit a historic low in May this year and has jumped almost 62% in the past four and a half months. JP Morgan calls ChargePoint a “clear leader” in the North American DC market (Tier 2) with “increasing growth opportunities in the DC fast charging (DCFC) markets in North America and Europe” .
Peterson and Kakani predict that revenue growth over the next five to 10 years will outpace electric vehicle revenue growth in both markets “driven by new opportunities in commercial and fleet operations.”
Analysts’ December 2023 price target on the stock is $20, implying upside potential of 22.5%, based on a current trading price of around $15.50. The average price target of 20 analysts is $15.50, with a range of $13 to $46. Downside risks include increased competition, slower-than-expected growth in the electric vehicle industry, supply chain disruptions and fickle customers.
Battery maker Enovix went public in a SPAC merger in July last year, and shares are currently trading around 12% higher. Since hitting an all-time low in May, stocks have risen about 140%. The company’s main growth driver is an advanced silicon-anode lithium-ion battery that increases energy density and high cycle life.
Peterson and Kakani claim that this already marketed product is “potentially years ahead of many of its competitors.” Product differentiation and scale should drive margin expansion and long-term profitability.
JP Morgan’s price target on the stock is $28, a potential upside of 40% from the current price. The average price target for a group of eight analysts is $48.38, ranging from a low of $25 to a high of $100. Downside risks include a slower-developing electric vehicle industry, execution risk, capital intensity, lack of scale, long-term high prices for materials, and a notoriously variable consumer market for the company’s batteries that power portable devices, cell phones and laptop computers.
Plug Power has a longer history than either of JP Morgan’s other top picks. The company was founded in 1997 and went public in 1999 at $15.00 per share in a traditional initial public offering. Over the past 20 years, Plug Power has never recorded positive earnings per share. What gives analysts a bullish view is the company’s proton-exchange membrane (PEM) electrolyser technology and recent deals with major Korean players SK Group and Renault, among others, in the field of electrolyser. green hydrogen. Analysts believe the total Plug Power market size could exceed $200 billion. The company is targeting a compound annual growth rate of at least 50% in revenue to $3 billion by 2025 and more than $600 million in EBITDA.
Peterson and Kakani note that Plug Power is a “key leader in the emerging global hydrogen ecosystem…, with exciting expansion opportunities on the horizon.” The company also continues to innovate, seek more partners and acquisitions globally, and win new customers.
Analysts have set a price target of $32 on the stock, implying upside potential of around 50% from the current price. The average price target of a pool of 28 analysts is $37.07 within a range of $25 to $78. Downside risks include reduced investor momentum, execution risk, customer losses, low oil and gas prices, increased battery electric vehicle price competition, new competitors, evolution of government policy and “dilutive or disruptive” acquisitions.
Sponsored: Tips for Investing
A financial advisor can help you understand the pros and cons of investment properties. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool connects you with up to three financial advisors who serve your area, and you can interview your matching advisors for free to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, start now.
Investing in real estate helps diversify your portfolio. But expanding your horizons can come with additional costs. If you are an investor looking to minimize your expenses, consider checking out online brokers. They often offer low investment fees, which helps you maximize your profits.
It has not been a good year for growth stocks. Faced with rising inflation and the looming threat of recession, investors sought out value plays and parking spots. High dividend yields and dollar strength do the trick.
In the race for safety, a number of growth stocks are being left behind and offering significant rewards to investors willing to take risks and wait. JP Morgan analysts Bill Peterson and Mahima Kakani have identified three top picks in the transportation and transportation fuels industry that they believe are well positioned for long-term success.
In a note to investors Thursday morning, analysts review their overweight ratings and price targets on electric vehicle (EV) charging company ChargePoint Holdings Inc. (NYSE:CHPT), advanced battery maker Enovix Corp. (NASDAQ: ENVX) and hydrogen fuel supplier Plug Power Inc. (NASDAQ: PLUG).
All three received a temporary boost from the Cut Inflation Act, but the glow faded quickly for Enovix and Plug Power. Both are now trading slightly lower than before it became clear the Biden administration had the votes to pass the legislation. Enovix jumped over 70% in August and managed to hold on to around half of that gain. Still, JP Morgan analysts believe that “these stocks can outperform over the next few months with a likely unhindered demand profile, even if we enter a recession later this year or next year.”
ChargePoint went public in March 2021 through a SPAC merger, and the stock has fallen around 48% since then. It hit a historic low in May this year and has jumped almost 62% in the past four and a half months. JP Morgan calls ChargePoint a “clear leader” in the North American DC market (Tier 2) with “increasing growth opportunities in the DC fast charging (DCFC) markets in North America and Europe” .
Peterson and Kakani predict that revenue growth over the next five to 10 years will outpace electric vehicle revenue growth in both markets “driven by new opportunities in commercial and fleet operations.”
Analysts’ December 2023 price target on the stock is $20, implying upside potential of 22.5%, based on a current trading price of around $15.50. The average price target of 20 analysts is $15.50, with a range of $13 to $46. Downside risks include increased competition, slower-than-expected growth in the electric vehicle industry, supply chain disruptions and fickle customers.
Battery maker Enovix went public in a SPAC merger in July last year, and shares are currently trading around 12% higher. Since hitting an all-time low in May, stocks have risen about 140%. The company’s main growth driver is an advanced silicon-anode lithium-ion battery that increases energy density and high cycle life.
Peterson and Kakani claim that this already marketed product is “potentially years ahead of many of its competitors.” Product differentiation and scale should drive margin expansion and long-term profitability.
JP Morgan’s price target on the stock is $28, a potential upside of 40% from the current price. The average price target for a group of eight analysts is $48.38, ranging from a low of $25 to a high of $100. Downside risks include a slower-developing electric vehicle industry, execution risk, capital intensity, lack of scale, long-term high prices for materials, and a notoriously variable consumer market for the company’s batteries that power portable devices, cell phones and laptop computers.
Plug Power has a longer history than either of JP Morgan’s other top picks. The company was founded in 1997 and went public in 1999 at $15.00 per share in a traditional initial public offering. Over the past 20 years, Plug Power has never recorded positive earnings per share. What gives analysts a bullish view is the company’s proton-exchange membrane (PEM) electrolyser technology and recent deals with major Korean players SK Group and Renault, among others, in the field of electrolyser. green hydrogen. Analysts believe the total Plug Power market size could exceed $200 billion. The company is targeting a compound annual growth rate of at least 50% in revenue to $3 billion by 2025 and more than $600 million in EBITDA.
Peterson and Kakani note that Plug Power is a “key leader in the emerging global hydrogen ecosystem…, with exciting expansion opportunities on the horizon.” The company also continues to innovate, seek more partners and acquisitions globally, and win new customers.
Analysts have set a price target of $32 on the stock, implying upside potential of around 50% from the current price. The average price target of a pool of 28 analysts is $37.07 within a range of $25 to $78. Downside risks include reduced investor momentum, execution risk, customer losses, low oil and gas prices, increased battery electric vehicle price competition, new competitors, evolution of government policy and “dilutive or disruptive” acquisitions.
Sponsored: Tips for Investing
A financial advisor can help you understand the pros and cons of investment properties. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool connects you with up to three financial advisors who serve your area, and you can interview your matching advisors for free to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, start now.
Investing in real estate helps diversify your portfolio. But expanding your horizons can come with additional costs. If you are an investor looking to minimize your expenses, consider checking out online brokers. They often offer low investment fees, which helps you maximize your profits.