JPMorgan Chase & Co. (NYSE:JPM), the world’s largest publicly traded bank by market cap, has shared its market and stock predictions for 2023. The bank’s outlook on the economy is cautious, as it foresees the Federal Reserve raising the benchmark interest rates again in the near future.
Inflation levels were flat in October, giving hope for a pause on further rate hikes. However, JPMorgan CEO Jamie Dimon believes the Fed will resume rate hikes next year.
“Personally, I think people are overreacting to short-term numbers — and they should stop doing that,” Dimon said. “I think inflation is probably a little stickier than that [data] shows.”
Don’t Miss:
Dutch Bros
Dutch Bros Inc. (NYSE:BROS), a prominent U.S. coffee chain, received an upgrade to Overweight from JPMorgan. The bank expects Dutch Bros stock to reach $35, indicating a potential upside of over 22%.
Investors have shown optimism in Dutch Bros stock after the company reported significant revenue growth in the last quarter. In Q3, the company achieved record revenue of $265 million, a 33% year-over-year increase. Dutch Bros’ net income in the last quarter rose over 737% year over year to $13.4 million, and the stock has surged by over 10.9% in the past month.
Dutch Bros also upgraded its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) outlook by $15 million to $150 million to $155 million for the current quarter due to stronger-than-expected year-to-date profitability. The company also improved its liquidity position in the last quarter, which should boost its long-term growth rate.
“During Q3 in a span of less than 45 days, we executed two transactions, an upgrade of our credit facility and a follow-on equity offering that unlocked a total of almost $500 million in incremental liquidity and positioned our balance sheet to support a long runway of growth. We intend to continue confidently pursuing high-quality investments in new shops on our path to 4,000,” Dutch Bros CEO Joth Ricci said in the company’s latest earnings release.
Hubbell
Hubbell Inc. (NYSE:HUBB), specializing in electrical and utility products, has seen a 26% year-to-date rise in its shares. JPMorgan expects HUBB to rise further, having upgraded the stock to Overweight. The bank has set a price target of $35 on the stock, indicating a potential upside of over 12%.
Hubbell agreed to purchase Northern Star Holdings Inc., also known as Systems Control, for $1.1 billion last month. This acquisition is anticipated to significantly enhance Hubbell’s financials, as Systems Control is expected to generate sales worth $400 million in fiscal 2024.
“Systems Control has a strong track record of financial performance and is highly complementary to Hubbell’s portfolio, enabling us to deliver additional value to our core utility customers while enhancing our overall growth and margin profile for shareholders,” Hubbell President and CEO Gerben Bakker said in a press release.
Analysts project Hubbell’s revenue for the fourth quarter to reach $1.32 billion, indicating an 8.1% year-over-year rise. The consensus earnings per share (EPS) estimate of $3.54 for the ongoing quarter reflects a 36.2% increase over the same period.
VF Corporation
JPMorgan is optimistic about Denver-based lifestyle apparel and footwear designer VF Corp. (NYSE:VFC), operator of brands like Vans and North Face. The bank raised its price target on VF Corp. from $15 to $19, signaling a potential upside of over 14%.
While the company’s sales margin declined in the second quarter, CEO Bracken Darrell has been restructuring the business, focusing on a “Vans turnaround.” This initiative comes as Vans sales dropped 23% year over year in the last quarter.
“I see four things that we need to do,” Darrell said. “And then we’ll have a bigger strategy that will follow.”
This encompasses cost-reduction strategies, establishing a global commercial structure, reducing debt levels, deleveraging the balance sheet, and appointing a president for the Vans segment.
Read Next:
“ACTIVE INVESTORS’ SECRET WEAPON” Supercharge Your Stock Market Game with the #1 “news & everything else” trading tool: Benzinga Pro – Click here to start Your 14-Day Trial Now!
This article JPMorgan Upgraded These Stocks Last Week — Should You Buy Now? originally appeared on Benzinga.com
.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
