J.P. Morgan Forecasts Massive Surge for These 2 Promising Stocks

Two promising stocks forecasted for substantial growth by J.P. Morgan analysts. Learn about Annexon Biosciences and EverQuote's potential.

Mar 13, 2024 - 02:45
Mar 13, 2024 - 02:53
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J.P. Morgan Forecasts Massive Surge for These 2 Promising Stocks
J.P. Morgan Forecasts Massive Surge for These 2 Promising Stocks

As we journey into 2024, the momentum from last year's market surge persists, with the S&P 500 already up by 8.5% this year. Interestingly, the pace of growth among the 'Magnificent 7' mega-cap tech giants has eased, offering investors an opportunity to diversify their portfolios while still reaping rewards.

Madison Faller, global investment strategist at JPMorgan, shares insights on the current market landscape: "We anticipate further upward movement in the markets. While big tech may continue its ascent, we expect other sectors, such as consumer-related industries, healthcare, and small to mid-cap companies, to participate in the rally."

Faller highlights a notable shift from the previous year, noting, "In 2023, the Magnificent 7 accounted for 60% of the S&P 500's total return, with the remaining 493 companies contributing only 40%. However, this year, the trend has reversed, with other sectors now driving nearly 60% of the S&P's return."

Following this assessment, JPMorgan analysts have pinpointed two small-cap stocks poised for significant growth potential, with projections of up to a 140% surge in the coming months. These stocks have garnered 'Strong Buy' ratings from the analyst consensus, according to data from TipRanks. Let's delve into the details.

Annexon Biosciences (ANNX)

Topping JPMorgan's list is Annexon Biosciences, a clinical-stage biopharmaceutical company dedicated to developing innovative treatments for complement pathway-mediated disorders affecting the brain, body, and eye. Annexon's unique approach focuses on halting C1q and all inflammatory aspects of the complement pathway before activation occurs, making it the sole biopharmaceutical company concentrating solely on C1q. Its flagship programs target various conditions, including Guillain-Barré syndrome (GBS), geographic atrophy, and other autoimmune disorders.

At the forefront of Annexon's pipeline is ANX005, a potential treatment for GBS, an autoimmune disease characterized by sudden muscle weakness, which can be life-threatening in severe cases. ANX005 has garnered Fast Track and Orphan Drug designations from the FDA, with Phase 3 pivotal clinical trial results expected in Q2 of this year. The company also aims to submit the Biologics License Application (BLA) in the second half of 2024.

Additionally, Annexon's ANX007 program, targeting geographic atrophy, is slated to commence Phase 3 trials this year. The company's robust pipeline, particularly the advanced stage of its ANX005 program, has earned praise from JPMorgan's biotech expert Anupam Rama, who predicts substantial success for Annexon.

Rama maintains an optimistic outlook, giving Annexon shares an Overweight (Buy) rating, accompanied by a price target of $11, indicating a potential 140% increase. The consensus among analysts echoes this sentiment, with a Strong Buy rating based on unanimous analyst reviews and an average price target of $14.80, suggesting a remarkable 222% upside potential.

EverQuote (EVER)

Next on the radar is EverQuote, an online insurance marketplace connecting insurance buyers with agents across various sectors, including life, auto, and home insurance. Founded in 2011, EverQuote leverages digital technology to simplify the insurance market and provide personalized solutions to customers, ultimately leading to cost savings through better risk management.

The company's performance has been promising, with its stock witnessing a 49% increase year-to-date. In its latest quarter, EverQuote reported revenues of $55.7 million, surpassing expectations by nearly $6 million. Despite a GAAP EPS loss of 19 cents per share, which improved compared to the prior year, EverQuote delivered a solid performance, reflecting its resilience in the market.

JPMorgan analyst Cory Carpenter remains bullish on EverQuote's prospects, foreseeing continued robust results driven by improved auto carrier spend and structural enhancements made during economic downturns. Carpenter maintains an Overweight (Buy) rating on EVER stock, setting a price target of $25, implying a potential upside of ~37%.

The analyst consensus on EVER shares is overwhelmingly positive, with 6 Buy ratings and 1 Hold. With the stock currently trading at $18.30, the average price target of $24.33 indicates a potential gain of ~33% over the next year.

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