2 Fresh Ideas From JP Morgan With Up to 60% Upside Potential

By Chris Lange Published Jul 6, 9:48AM EDT

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2 Fresh Ideas From JP Morgan With Up to 60% Upside Potential — © danielvfung / iStock Editorial via Getty Images

Equities have been in free-fall over the past quarter, and some investors now are shopping around and bottom-fishing for any stock that could provide some upside or security. One major Wall Street firm believes it has found a couple that offer huge upside potential.

J.P. Morgan 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. What separates these two stocks from many others is that they actually have gains on the year so far.

While market headwinds have put a damper on the markets in general over the past few months, J.P. Morgan believes that these two 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.

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Alibaba

Alex Yao was the lead analyst on the Alibaba Group Holding Ltd. (NYSE: BABA | BABA Price Prediction) call, and he reiterated an Overweight rating and raised the $130 price target to $140. That signals upside of 21% from the most recent closing price of $116.00.

Yao sees room for a positive surprise to consensus second-quarter estimates on Alibaba’s cost optimization. On-the-ground observations and local news flow suggest a further scale-back of investments by Alibaba over the quarter. As a result, losses from the company’s multiple initiatives, like Taocaicai and local service, may improve more than expected sequentially.

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Yao expects Alibaba share price upside to be driven by positive earnings revisions, before rotating to multiple expansion when its earnings growth recovers to 20%-plus on a 6 to 12 months view. He is more positive on Alibaba’s margin outlook and notes the company remains one of his top picks in the China Internet universe.

Alibaba stock has a 52-week trading range of $73.28 to $216.60, and it traded near $119 a share early Friday. The stock is down about 1% year to date.

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Haliburton

Analyst Arun Jayaram reiterated an Overweight rating with a $50 price target Haliburton Co. (NYSE: HAL). The implied upside from the most recent closing price of $31.43 is 59%.

Overall, Jayaram sees an attractive risk/reward on Halliburton into the second-quarter print. He anticipates earnings upside in North America as well as “emerging optionality” to the company’s international footprint. He lifted second-quarter and second-half of 2022 estimates to reflect a positive view of pricing gains in recent months.

The stock traded above $28 early Tuesday, in a 52-week range of $17.82 to $43.99. Shares are up over 26% year to date.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.