3 Stocks With Upside Potential in the Near Term
The record-high inflation, the Federal Reserve's hawkish tilt, and growing recession fears have led to heightened volatility in the market. However, despite the concerning macro environment, Wall Street analysts see...
The record-high inflation, the Federal Reserve’s hawkish tilt, and growing recession fears have led to heightened volatility in the market. However, despite the concerning macro environment, Wall Street analysts see upside potential in VEON (VEON), Lumen Technologies (LUMN), and AbCellera Biologics (ABCL). So, these stocks could be worth adding to your portfolio. Read on….
Concerns over the Fed’s aggressive interest rate hikes to control surging inflation, geopolitical instability, and a potential recession have been driving immense market volatility of late. According to Labor Department data published this Wednesday, the Consumer Price Index (CPI) accelerated 9.1% from the year-ago value in June, exceeding the 8.8% Dow Jones estimate.
Considering the worse-than-anticipated inflation data, the Fed might lift a historic 100 basis-point hike this month to bring down prices. Therefore, the odds of a recession are increasing. These factors are expected to keep the stock market under pressure in the upcoming months.
Rob Morgan, Chief Investment Analyst at Charles Stanley, stated, “Falling markets are one of the biggest challenges faced by investors. But these testing periods are an inevitable part of investing. In the long term, they can also present good opportunities to acquire assets as others despondently sell.”
So, it is important to stay invested in fundamentally sound stocks possessing solid upside potential, which might perform well in the long run.
Despite the market turmoil, Wall Street analysts expect quality stocks VEON Ltd. (VEON), Lumen Technologies, Inc. (LUMN), and AbCellera Biologics Inc. (ABCL) to surge in the upcoming months. Moreover, these stocks are rated Buy or Strong Buy in our proprietary rating system. Thus, it could be wise to add them to your portfolio.
VEON Ltd. (VEON)
Headquartered in Amsterdam, the Netherlands, VEON provides mobile and fixed-line telecommunications services. The company offers voice, data, and other telecommunication services through wireless, fixed, and broadband internet services. In addition, it provides value-added services for corporations, operators, and consumers.
On June 14, VEON’s VEON Ventures division completed a $15 million investment as part of a Series A round for Dastgyr, a Pakistan-based B2B e-commerce marketplace platform.
“As part of VEON's transformation into a digital operator that delivers a growing range of services to our customers we are investing in leading digital companies like Dastgyr in the countries where we operate. These investments are the building blocks of the digital ecosystem that will enable us to deliver on our strategy,” said Mohd Khairil Abdullah, CEO of VEON Ventures.
On June 8, VEON announced the completion of an agreement to sell VEON Georgia LLC, VEON’s operating subsidiary in Georgia, to its former local partner for a valuation of $45 million. This transaction is another step toward streamlining the company’s group operations.
In the fiscal 2022 first quarter ended March 31, 2022, VEON's operating revenues increased 7.5% year-over-year to ₽83.61 billion ($1.43 billion). The company’s cash inflows from operating activities grew 58.5% from the prior-year period to ₽27.59 billion ($472.76 million).
As of March 31, 2022, its cash and cash equivalents stood at ₽11.04 billion ($189.17 million), compared to ₽10.31 billion ($176.66 million) as of December 31, 2021.
The $8.86 billion consensus revenue estimate for the fiscal year 2022 (ending December 2022) represents a 13.8% improvement from the last year. Analysts expect VEON’s EPS for the current year to increase 41.3% year-over-year to $0.39.
The stock has declined 5.1% over the past month and 23.2% over the past three months to close the last trading session at $0.45. However, analysts expect the stock to hit $2.35 in the near term, representing a 244.1% upside potential.
VEON’s POWR Ratings reflect this promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
VEON has a grade of A for Value and Quality. Within the A-rated Telecom - Foreign industry, it is ranked #7 of 46 stocks.
To access additional POWR Ratings (Stability, Sentiment, Growth, and Momentum) for VEON, click here.
Lumen Technologies, Inc. (LUMN)
LUMN is a facilities-based technology and communications company that engages in integrated communications with residential and business customers in the U.S. and internationally. It operates through five segments: International and Global Accounts Management; Enterprise; Small and Medium Business; Wholesale; and Consumer.
This week, LUMN announced investing in its global Edge network and expanding its Edge Computing Solutions into Europe. The company will provide its low latency platform that businesses need to extend their high-bandwidth, data-intensive applications out to the cloud edge.
Currently, Lumen Edge Computing Solutions can meet approximately 70% of enterprise demand within five milliseconds of latency in the UK, France, Germany, Belgium, and the Netherlands. There are additional locations planned by the end of the year.
In the fiscal 2022 first quarter ended March 31, 2022, LUMN's operating income grew 9.7% year-over-year to $1.08 billion. The company’s net income and earnings per share amounted to $599 million and $0.59, registering increases of 26.1% and 34.1%, respectively, year-over-year.
Its cash and cash equivalents and total current assets came in at $366 million and $11.77 billion, respectively, as of March 31.
The stock has gained marginally over the past month to close the last trading session at $10.63. Wall Street analysts see a marginal upside in the stock.
LUMN's POWR Ratings reflect this promising outlook. It has an overall grade of B, equating to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
LUMN has a grade of A for Value and B for Quality. Within the Telecom - Domestic industry, it is ranked #3 of 20 stocks.
Click here to see additional POWR Ratings (Stability, Growth, Momentum, and Sentiment) for LUMN.
AbCellera Biologics Inc. (ABCL)
Headquartered in Vancouver, Canada, ABCL operates an antibody discovery platform. Its full-stack artificial intelligence discovery platform searches and analyzes the database of natural immune systems to find antibodies that could be developed as drugs.
The company has nearly 156 discovery programs that are either completed, in progress, or under contract with 36 partners.
In May, ABCL and Empirico Inc. expanded their strategic multi-target discovery collaboration, which leverages Emporico’s Precision Insights Platform to discover genetically validated drug targets and ABCL’s technology to identify lead candidate antibodies against these targets.
Following the rapid progress of their collaborative program, which identified a lead candidate against an undisclosed G protein-coupled receptor (GPCR) target, the companies have expanded their partnership to include seven targets. This partnership is expected to boost ABCL’s business growth and profitability.
In the fiscal 2022 first quarter ended March 31, 2022, ABCL's revenue increased 56.2% year-over-year to $316.58 million. Its income from operations improved 42.3% from the year-ago value to $224.95 million. The company's net earnings and earnings per share attributable to common shareholders came in at $168.57 million and $0.54, up 43.8% and 46% year-over-year, respectively.
Analysts expect ABCL's revenue for the fiscal 2022 third quarter (ending September 2022) to come in at $69.42 million, representing a 1,160.4% rise from the same period in 2021. Also, Street expects the company's EPS for the ongoing quarter to grow 20% year-over-year. The company has surpassed the consensus EPS estimates in three of the trailing four quarters.
ABCL’s shares have gained 26.1% over the past month and 23.5% over the past three months to close the last trading session at $11.10. The 12-month median price target of $30.00 indicates a 170.3% potential upside. The price targets range from a low of $14.00 to a high of $43.00.
ABCL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall grade of B, equating to a Buy in our proprietary rating system.
ABCL has a grade of B for Growth, Value, and Sentiment. Within the Biotech industry, it is ranked #26 of 402 stocks.
Click here to see additional POWR Ratings (Stability, Quality, and Momentum) for ABCL.
VEON shares were unchanged in premarket trading Friday. Year-to-date, VEON has declined -73.68%, versus a -19.84% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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