Investors have plenty to feel positive about. Inflation is easing, with probably the most recent data showing an annualized rate of two.4%, just shy of the Fed’s goal by lower than half a percentage point. Meanwhile, the stock market continues its bullish run, with the S&P 500 hitting a record high of 5,822 on Friday, marking a 22% year-to-date gain.
The naysayers have, to this point, been proven incorrect – the economy, at least up to now because the stock market is frightened, stays robust. Oppenheimer’s chief investment strategist, John Stoltzfus, echoes this positive sentiment, stating, “The S&P 500’s closing price suggests to us a bull market that persists bolstered by economic resilience supported by business and consumer activity with opportunity for stocks to maneuver higher into year-end… We remain positive on equities.”
How positive is Oppenheimer with reference to equities? Positive enough for the firm’s analysts to project massive gains for certain stocks – including one with a possible upside of as much as 740%.
We’ve dived into the TipRanks database to gauge Wall Street’s general view on two Oppenheimer picks. The consensus? Strong Buy rankings across the board, with substantial upside potential. Let’s take a greater have a take a look at the small print.
Rani Therapeutics (RANI)
Biologics made serious waves inside the medical world. These are a category of drugs that give attention to severe and chronic autoimmune, inflammatory, and metabolic diseases – conditions which have before now proven proof against traditional treatments and medications. The big problem with biologics is the delivery – they’re dosed through IV infusion, as they will’t withstand stomach acids. That’s where Rani Therapeutics, the first Oppenheimer pick we’ll have a take a look at, has made its great contribution.
The company has developed the RaniPill, a delivery system that allows biologic drugs to be dosed orally. The RaniPill capsule can move through the stomach and remain intact, allowing for the biologic drug inside to be effectively absorbed by the highly vascularized wall of the small intestine. It’s an revolutionary design that bypasses definitely certainly one of the most important ‘patient problems’ with biologics, improving each patient comfort and medicines compliance.
Rani has followed up the event of this recent delivery system with several clinical trials on recent drug candidates targeting several applicable metabolic or inflammatory conditions. Key drugs in its pipeline include RT-102 for osteoporosis and RT-111 for psoriasis, each of which have shown promising ends in early trials. RT-102 is slated to start out a Phase 2 trial in Europe by year-end, while RT-111, following positive Phase 1 results, is perhaps tested at higher doses to further assess safety and efficacy.
In addition to, the company is working with ProGen on the event and commercialization of PG-102, an obesity treatment, delivered with the RaniPill and designated RT-114. Development is specializing in convenient delivery through a once-weekly dose, and a Phase 1 study is planned for initiation next yr.
Oppenheimer analyst Andreas Argyrides sees great potential in Rani’s pipeline, noting that it could open the door to the worldwide biologics market, which was valued at $516 billion in 2022 and is projected to attain $856 billion by 2031. Argyrides estimates that Rani’s pipeline could generate $1.1 billion in total product revenue.
“We consider Rani Therapeutics a compelling investment opportunity based on its revolutionary RaniPill… The RaniPill’s ability to realize bioavailability comparable to or higher than subcutaneous injections while eliminating the discomfort and inconvenience related to needle-based delivery positions it as a possible game-changer inside the biologics market across multiple indications,” Argyrides opined.
Discussing each the stock and the clinical pipeline, the analyst adds, “While shares have been under pressure to this point this yr attributable to a scarcity of catalysts, we see a possibility for the stock to recuperate with the initiation of a Ph2 study with RT-102 in osteoporosis in Europe this yr followed by an IND inside the US. Positive Phase 1 results from RT-111 in psoriasis and from ProGen’s PG-102 hint on the potential to handle significant unmet needs across various therapeutic areas, including metabolic and inflammatory diseases. With strong IP covering the RaniPill, RaniPill HC and the delivery of assorted biologics and large molecules using the platform, we see Rani as a pioneer inside the oral biologics space and we recommend buying shares at current discounted levels.”
Backing this positive outlook, Argyrides gives RANI a Buy rating, with a $17 price goal, implying a sturdy one-year upside potential of ~740%. (To look at Ahmad’s track record, click here)
Overall, RANI has picked up 5 recent positive analyst reviews, for a unanimous Strong Buy consensus rating. The shares are trading inside the penny-stock range, at $2.02, and the $12 average price goal implies a one-year upside potential of 494%. (See RANI stock forecast)
Ultra Clean Holdings (UCTT)
The next Oppenheimer pick we’re is Ultra Clean Holdings, a tech firm that provides tools and services to the semiconductor chip industry. Ultra Clean develops the critical subsystems, components, parts, and high-purity cleansing services essential to indicate silicon wafers into microchips.
The company operates through two divisions – Products, which focuses on giving solutions for subassemblies, improved design-to-delivery cycles, prototyping, and high-precision manufacturing; and Services, which offers tool chamber parts cleansing and coating, along with micro-contamination evaluation. While these services are critical for the chip industry, they’ve also found use in other high-tech assembly niches, resembling the petrochemical industry, the pharmaceutical industry, and inside the manufacture of LCD displays.
In its 2Q24 earnings report, Ultra Clean posted revenue of $516.1 million, marking a 22% year-over-year growth and exceeding expectations by over $26 million. On the underside line, the company reported non-GAAP earnings of 32 cents per share, beating forecasts by 6 cents. Looking forward to its Q3 report, the company has projected revenues inside the range of $490 million to $540 million, with a midpoint of $515 million – comfortably above the consensus estimate of $490.5 million.
Oppenheimer analyst Edward Yang highlights that AI compute demand is doubling every six months, while hardware advancements, limited by Moore’s Law, only improve every two years. Consequently, Yang foresees a chronic shortage of advanced semiconductors and the tools required to offer them. He considers UCT a ‘picks-and-shovels’ investment that addresses this growing supply challenge.
Yang outlines several points which will lead the company to surpass expectations, stating, “UCT is: 1) highly leveraged to the semiconductor upcycle and can exceed estimates if wafer fab equipment (WFE) recovers as expected; 2) well positioned in AI growth areas, including nascent, but booming franchises in high-bandwidth memory (HBM), advanced packaging, and vacuum based EUV tools, all with leading Western OEMs; and three) uniquely hedged against the US/China ‘Chips War’ with a sturdy local presence supplying rising Chinese equipment makers. Currently, UCT is well on its solution to reclaiming its prior peak levels, but stays down 20% in quarterly revenue and gross margin, with operating margin and stock price halved, making it a coiled spring poised for upward movement.”
To this end, Yang rates UCTT shares as Outperform (i.e. Buy) with a price goal of $70, indicating a possible 76% upside inside the next yr. (To look at Yang’s track record, click here)
Overall, there are 3 recent analyst reviews of UCTT shares on record, they sometimes are unanimously positive – for a Strong Buy consensus rating. The stock’s $39.68 trading price and $65 average goal price together imply a one-year gain of ~64%. (See UCTT stock forecast)
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Disclaimer: The opinions expressed on this text are solely those of the featured analysts. The content is supposed to be used for informational purposes only. It’s quite essential to do your personal evaluation before making any investment.