As markets figure out a direction over the course of this summer, economic headwinds may be holding back some gains. Investors are looking to safe havens to ride out this storm. Considering a potential recession is on the way (or already here), one major Wall Street firm believes it has found a couple companies that offer upside.

Wells Fargo issued a couple of calls recently, and although there is no particular focus in terms of sector or industry, the main idea is upside. Each call is incredibly positive, forecasting massive upside in both the near and long term.

While market headwinds have put a damper on the markets in general over the past few months, Wells Fargo believes that a couple of these stocks could provide solid upside in the coming months and years.

It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Ollie’s Bargain Outlet

Wells Fargo’s Edward Kelly reiterated an Overweight rating on Ollie’s Bargain Outlet Holdings Inc. (NASDAQ: OLLI) and raised the $65 price target to $70. That implies upside of 30% from the most recent closing price of $53.66.

Kelly noted in the report that company management struck a particularly bullish tone in its recent meetings and is clearly very optimistic about improving deal flow, benefit from trade down, stronger inventory positioning, and improved visibility around supply chain costs. The company sounded confident on a trajectory to more normalized gross margin 2023, which should support much stronger flow through on what they expect to be a robust top-line environment.

Ollie’s stock has a 52-week trading range of $37.67 to $95.43, and it traded near $52 a share early Monday. The stock is actually up about 5% year to date.

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Silvergate Capital

Wells Fargo’s Jared Shaw initiated coverage on Silvergate Capital Corp. (NYSE: SI) with an Overweight rating and $120 price target, implying upside of 62% from the most recent closing price of $74.01.

According to Shaw, Silvergate has created a strong network effect through its Silvergate Exchange Network, which is utilized by some of the largest exchanges and institutional clients in the crypto space. As rates rise, higher spread income will come from a zero-cost deposit base, and further growth in SEN Leverage and the rollout of a Silvergate-issued stablecoin payments network represent future opportunities.

Shaw further argues that continued institutional adoption of crypto and product innovation at the company should help maintain the bank’s growth profile. He concluded that much of the bear case is priced in at current levels, which makes for an attractive entry point.

The stock traded near $62 on Monday, in a 52-week range of $56.15 to $239.26. Shares are down over 50% year to date.

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