Nasdaq Markets

(RTTNews) - Apache Corp. (APA) and Total S.A. (TOT) announced a major oil discovery at the Kwaskwasi-1 well drilled offshore Suriname in Block 58.

(RTTNews) - The Thai stock market has finished lower in back-to-back sessions, sliding more than 20 points or 1.6 percent along the way. The Stock Exchange of Thailand now rests just beneath the 1,340-point plateau although it may find traction on Thursday.

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MUMBAI (Reuters Breakingviews) - Just maybe, India’s financial capital can start to look beyond its Covid-19 lockdown. An antibody testing study has found that a whopping 57% of people sampled in densely populated slum areas of Mumbai had coronavirus antibodies.

Image source: The Motley Fool.

Image source: The Motley Fool.

(RTTNews) - Macquarie Group Limited (MQG.AX, MQBKY.PK) said that its operating groups were impacted by mixed trading conditions, with their contribution in the first-quarter of 2021 slightly down on the first quarter of the 2020 financial year. It is currently unable to provide

(RTTNews) - The Indonesia stock market has moved lower in consecutive trading days, easing 5 points or 0.1 percent along the way. The Jakarta Composite Index remains just above the 5,110-point plateau although it may halt its slide on Thursday.

Image source: The Motley Fool.

Image source: The Motley Fool.

Image source: The Motley Fool.

Image source: The Motley Fool.

Image source: The Motley Fool.

Image source: The Motley Fool.

Which stocks have been the stars of 2020? Biotechs. Amid the onset of the global health crisis, companies advancing COVID-19 vaccines, treatments and testing kits have seen their shares take off rapidly on an upward trajectory. That said, Wall Street focus has locked in on the space for a different reason, namely merger & acquisition (M&A) activity.

Sure, against the backdrop of the pandemic and the resulting economic downturn, some names have opted to put a temporary hold on deal activity given the uncertainty that remains. That’s not to say deals aren’t being made. Based on data from Refinitiv, in the first half of 2020, there have been 20,664 mergers announced globally, totaling $1.2 trillion as of June 30.

With deals still being inked, the Street’s pros argue that there’s an opportunity for investors, as buyouts represent one of the fastest ways to see returns. Why? If a particular name is snapped up by another at a premium, the former can see its shares notch a percentage gain that’s close to that of the premium.

Bearing this in mind, we used TipRanks’ database to take a closer look at two healthcare stocks that reflect strong M&A targets, according to Wall Street analysts.

Cellectar Biosciences (CLRB)

Using its patented phospholipid drug conjugates (PDCs) delivery platform to specifically target cancer cells, Cellectar Biosciences wants to improve the lives of patients battling the deadly disease. Should its CLR-131 candidate ultimately gain approval, some members of the Street believe it would make a great buyout target.

Writing for Oppenheimer, 5-star analyst Kevin DeGeeter tells clients that several factors are driving his bullish thesis. First and foremost, CLR-131 could get the FDA’s stamp of approval by the end of 2022 for lymphoplasmacytic lymphoma (LPL). To back up this prediction, the analyst stated, “There are no approved therapies for r/r LPL. Based on 100% response rate in four patients, including one CR, we expect management to advance CLR-131 into an abbreviated registration study by the end of 2020.”

On top of this, DeGeeter cites the therapy’s differentiated AE profile and competitive objective response rate (ORR) as suggesting that material off-label use could be a possibility. “While the market is highly competitive with potential for BCMA compounds to change SOC in early lines of therapy, clinical outcomes for triple refractory patients that account for about 15% of all cases remain poor with response rates of ~30% and PFS of four months,” he explained.

To this end, assuming a 60%/40% revenue split for the LPL and multiple myeloma markets, CLR-131 could generate peak sales of $290 million. If that wasn’t enough, development in rare pediatric cancers, including the potential for a priority review voucher, could drive even more upside.  

Speaking to the possibility of M&A, DeGeeter commented, “We view M&A following CLR-131's potential FDA approval as a likely outcome. Recent consolidation in the radiopharmaceutical market includes acquisitions of Advanced Accelerator Applications for $3.9 billion and of Endocyte for $2.1 billion (both in 2018). Given complex supply chains for radiopharmaceuticals, larger companies enjoy favorable economies of scale on distribution and cost of goods, in our view.”

To this end, DeGeeter rates CLRB an Outperform (i.e. Buy) rating, along with a $5 price target. This figure implies shares could soar 283% in the next year. (To watch DeGeeter’s track record, click here)

The rest of the Street agrees. Only Buy ratings, 3, in fact, have been issued in the last three months, which add up to a Strong Buy analyst consensus. At $3.67, the average price target puts the upside potential at 181%. (See CLRB stock analysis on TipRanks)

Immunomedics (IMMU)

With the goal of providing patients with better and more effective treatments, Immunomedics develops immunotherapeutics that target cancer, autoimmune and other serious diseases. Following a recent pipeline win that de-risked one of its assets, M&A discussions could be on the horizon.

5-star analyst Michael Schmidt, of Guggenheim, points to the recent FDA approval of Trodelvy in triple-negative breast cancer (TNBC) as reflecting a “major de-risking pipeline event,” and as such, he thinks “IMMU could potentially be perceived as a theoretical acquisition candidate by investors.”

Expounding on this, Schmidt stated, “In addition, we think IMMU is well-positioned as a potential acquisition candidate based on our analysis of 69 new chemical entities and new biologics US-approved in the past 12 months given that it ranks #3, only after Vertex Pharmaceuticals’ Trikafta and Seattle Genetics’ Padcev in terms of product revenue potential, while being the smallest among these three companies.”

After assessing the clinical pipelines and commercial presence of 19 large-cap biopharmaceutical companies for potential synergies and strategic fit with IMMU, Schmidt argues several have significant overlap with Trodelvy’s potential target markets. Scoring each name based on their late-stage clinical pipeline in breast cancer, bladder cancer and lung cancers as well as their existing commercial footprint in those indications and revenue growth rates, the analyst concluded Pfizer, Merck, Rogers and Eli Lilly are the most likely to acquire IMMU.

How much would IMMU actually be worth in an M&A scenario? $50-$60 per share, in Schmidt’s opinion. That being said, even if IMMU isn’t ultimately acquired, the analyst still likes what he’s seeing.

“We currently value IMMU at $41/share as a standalone company, based on probability-of-success (PoS) adjusted peak U.S. sales of Trodelvy of $790 million, $354 million, and $1,465 million, in 3rd-line TNBC, 2nd/3rd-line bladder cancer, and 4th-line HER2-/HR+ breast cancer, and 100%, 50%, and 80% PoS, respectively... Other signal finding studies are exploring opportunities in multiple tumor types, including NSCLC, endometrial, earlier lines of metastatic breast cancer and bladder cancer, as well as early stage breast cancer, which represent potential sources of upside for the stock,” he explained.

In line with his optimistic take, Schmidt stayed with the bulls. In addition to reiterating a Buy recommendation, he left the price target at $52, which implies nearly 23% upside from current levels. (To watch Schmidt’s track record, click here)      

The bulls represent the majority on this one. Out of 9 total reviews published in the last three months, 8 analysts rated the stock a Buy, while 2 said Hold. So, IMMU gets a Strong Buy consensus rating. The $46.44 average price target suggests shares could rise nearly 10% in the next twelve months. (See IMMU stock analysis on TipRanks)

To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

This summer has seen policies and economic forecasts move in see-saw fashion, as state economies opened up, restrictions were lifted – and then the dreaded ‘second wave’ of COVID-19 showed signs of appearing, prompting new lockdowns in California and a mask mandate in Texas.

Investment bank Goldman Sachs, which had been forecasting a gangbusters growth rate of 33% in Q3, now sees the economy beginning to slow. The firm is guiding toward 25% growth in third quarter, and a July-August ‘pause’ in consumer services.

Still, according to Goldman’s chief economist Jan Hatzius, “The recent declines are minor compared to the collapse in activity in March and April, but they clearly indicate a break from the steady upward trend since mid-April.”

Even though the bank, and its strategists, are turning more cautious on the markets as we head into late summer, they are also pointing out stocks to buy. It’s a contradiction, but squared by the stock analysts’ approach. They are now taking a more selective look at the markets, to find the less-visible opportunities hidden behind the pandemic

We’ve used the TipRanks database to pull up the details on three stocks that Goldman Sachs recommends. These stocks all offer over 30% upside potential in a difficult investing climate. Let’s see what else brought them to the analysts’ attention.

Albertsons Companies (ACI)

America’s second largest grocery chain, Albertsons, went public this past June. The chain’s management saw opportunity in the pandemic chaos – with more people cooking at home, a grocery chain basing its brand on fresh meat and seafood would have a chance to build on changing consumer habits. The grocery chain is profitable, with revenues of $62 billion in fiscal year 2019 and net income of $466 million.

Goldman’s Kate McShane, a 5-star expert on retail stocks, is bullish on groceries. In a recent note, she writes, “[We] note eating at home trends continue to hold up well, with food growth above where it was pre-pandemic and grocery app downloads still above average. We believe that demand will remain higher than average for the longer term driven by a more value conscious consumer and possibly due to behavioral changes of eating out.”

Regarding ACI, McShane notes “Our framework focuses on operating income dollar growth, market share gains, defensiveness, execution, SSS sales growth, and EPS growth in the context of valuation. ACI scores the highest on all these measures versus SFM and KR. Further, ACI scores only slightly lower than high quality names such as WMT, COST and ORLY, further underscoring our Buy rating.”

Along with her Buy rating, McShane sets a $22 price target on ACI that implies an upside of 45%. (To watch McShane’s track record, click here)

Overall, Wall Street agrees with the Goldman Sachs stance on Albertsons. The stock has 16 reviews, including 13 Buys and just 3 Holds. Shares are trading for $15.20, while the $19.64 average price target suggests a one-year upside of 29%. (See ACI stock analysis on TipRanks)

Kimco Realty (KIM)

From groceries, we move to Kimco Realty, a real estate investment trust that focuses on shopping centers. The company’s portfolio includes 422 properties, with more than 70 million square feet of leasable space.

The collapse in retail activity during 1H20 hurt Kimco’s share price, but not the company earnings. KIM fell 56% in March, and has recovered only slightly. The stock is still down 40% from pre-crash levels. At the same time, earnings have been steady and stable. Q1 EPS came in at 37 cents, beating the 36-cent forecast – and matching the previous two quarters. Revenues, at $289.7 million, were in-line with the forecast and the year-ago numbers.

The May earnings helped support Kimco, but the company got a stronger shot in the arm last month. At the end of June, Kimco announced that it has realized over $71 million from an investment in a major grocery chain that anchors many of the company’s retail properties. The investment – which has totaled $207 million since 2006 – has brought the REIT at total of $569 million over the years. And the grocery company that has brought Kimco these gains? Albertsons.

Covering this stock for Goldman Sachs, analyst Caitlin Burrows noted, "As of June 30, 2020, the company had collected 66%, 65%, and 72% of pro-rata ABR for April, May, and June 2020, respectively. This is slightly higher than our prior estimate of 2Q collections, of 66%. In 2Q20, the company expects to increase its allowance for doubtful accounts receivable (AR) by $45-$55 million (consisting of $35.5-$40.5 million of allowance against AR and $9.5-$14.5 million against straight line rent receivables). We acknowledge this reserve reflects KIM’s approach to accounting, but will likely vary by REIT in the near-term due to each company’s own assumptions and accounting practices."

To this end, Burrows rates KIM a Buy, along with a $15 price target. This figure implies a strong upside of 38% for shares. (To watch Burrow’s track record, click here)

Wall Street is naturally wary of a major retail property owner right now, so the analyst consensus, a Hold, is sharp contrast to Burrows’ upbeat outlook. The consensus rating is based on 3 Buys, 10 Holds, and 1 Sell given in recent weeks. KIM shares have an average price target of $12.96, suggesting – despite the caution – a 15% upside potential in the coming year. (See KIM stock analysis on TipRanks)

Citrix Systems (CTXS)

From groceries, we move to tech. Citrix is a software company, offering SaaS and cloud systems for desktop virtualization, security, and networking. The company’s shares have been rising steadily through the pandemic period, as its products are a fine fit for the mass move toward remote work. CTXS is up 17% since February, strongly outpacing the broader markets.

Earnings in Q1 were strong, growing sequentially from Q4 and beating the analyst forecasts. Q2 was disappointing, however, with EPS sliding from $1.46 to 99 cents – although it was still well above the estimates. Q2 revenues, at $799 million, were also above the forecast, and up 6.8% year-over-year.

With a presence in over 100 countries, a customer base more than 10,000 strong, and annual revenues exceeding $3 billion, along with digital products well suited to today’s work environment, Citrix stands in an enviable position.

Heather Bellini, Goldman’s 5-star analysts, notes this when she writes, “We continue to view Citrix as well positioned to capitalize on long-term secular growth tailwinds, including workforce mobility and security, within its digital workspaces business. We believe the debate going forward will likely center on the durability of recent strength following work from home initiatives enacted post COVID-19…”

Bellini’s bullish outlook and Buy rating on the stock come with a $189 price target, indicating her confidence in 36% growth for the year ahead. (To watch Bellini’s track record, click here)

Overall, the analyst consensus here is a Moderate Buy, based on 11 reviews, including 5 each Buys and Holds, along with 1 Sell. The average price target, $166.57, suggests room for 16% growth from the current trading price of $139.35. (See Citrix stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

(RTTNews) - The Malaysia stock market has climbed higher in three straight sessions, collecting almost 25 points or 1.4 percent along the way. The Kuala Lumpur Composite Index now rests just above the 1,610-point plateau and it's looking at another green light for Thursday's tra

Image source: The Motley Fool.

Image source: The Motley Fool.

Image source: The Motley Fool.