Analysts say these three stocks are their top picks for the rest of 2022

Farewell, July, it was a pleasure. Sentiment may finally turn to Wall Street after the stock market posted its best month since November 2020, buoyed by better-than-expected quarterly results from tech giants and the possibility that the Federal Reserve will facilitate future rate hikes.

Leading indicators are still down for the year, but we’re clearly in the midst of a rally.

Where this pool will go is anyone’s guess. Right now, Wall Street analysts are busy picking which stocks are the best place to make gains in the second half of this year. These “top picks” are an interesting group of buy-rated stocks with a strong upside forecast for everyone.

Does this make them the right stock for a muddled time? We can take a look at the latest details, drawn from the TipRanks database, and check out a recent analyst comment, to find out. Each of these three stocks has been given a “Top Pick” rating in recent weeks.

TechnipFMC Plc (FTI)

First on our list is TechnipFMC, a technology provider in the energy sector, serving both traditional producers and new energy customers. TechnipFMC offers a wide range of fully integrated projects, products and services, from onshore hydrocarbon exploration and extraction to offshore rigs and rigs to petroleum refining. The company operates a fleet of 18 technologically advanced ocean-going industrial vessels, has an active presence in 41 countries, and generated $6.4 billion in revenue in 2021.

A look at TechnipFMC’s revenue over the past two years shows a sharp decline from Q4 2020 to Q1 21 — but that’s one artifact in the company’s transformation of its petrochemicals and LNG business into a separate company. Since the split, revenue has stabilized between $1.53 and $1.68 billion. Until this past Q2.

For the second quarter of ’22, the company reported a $1.72 billion higher streak, a sequential 10% jump from the first of ’22, and a more modest 3% year-over-year gain. The increase in revenue was driven by strong gains in both major sides of the business, including 9.7% consecutive gains in Subsea revenue and 13% consecutive gains in the Surface Technologies segment.

The company’s strong performance has allowed for improvements to its capital structure, including reducing total debt by $530 million, which now stands at $1.5 billion. The company claimed $684.9 million in cash and liquid assets at the end of the quarter. In addition to improving the balance sheet, the company also announced a $400 million share buyback authorization, which translates to approximately 15% of total outstanding shares. The authorization marks the beginning of the policy of returning capital to shareholders.

Covering Piper Sandler, analyst Ian Macpherson points to Subsea’s increased momentum as a front-runner for FTI stocks, writing: “After booking $1.9 billion in the first quarter, we assumed an average of $1.6 billion inbound for the second and fourth quarters, and you wouldn’t be surprised to see Our fiscal year estimates of $6.7 billion have been dented. The volume of work the FTI did not bid for this year is unprecedented in the past decade. This in itself is a strong indication of pricing strength finally returning to sustainable levels. The cyclical tailwind, when layered with the embedded margin levers associated with FTI’s relentless business model innovation over the past five and two years, points to a plausible upside for the recently identified Subsea Margin Roadmap…”

Believing that this company will outperform in the future and that bookings and business will increase, MacPherson holds it as a “top pick,” and rates the stock as overweight (buy). Its price target, at $14.65 in US dollars, indicates a one-year rally of 81% in the coming year. (To watch McPherson’s record, click here.)

This player in the energy industry has 4 analyst ratings on record recently, and they agree this is a stock to buy, supporting the Strong Buy consensus rating. The shares are trading at $8.09, with an average price target of $11.91 indicating a gain of 47% for one year. (See TechnipFMC stock forecast at TipRanks.)

Legend Biotechnology Company (LEGEN)

Next on our list is Legend Biotech. The clinical-stage biopharmaceutical company is working on advanced cell therapies to treat leukemias and solid tumors. This is a common path for biopharma companies; Legend is distinguished by the advanced nature of its pipeline program, which currently features several Phase 2 and Phase 3 clinical trials. The company’s hematological malignancy program is the most advanced, with at least 6 late-stage trials underway.

In her clinical program, Legend made several significant announcements just this past June. The first of these announcements relates to a new program, LB1908. The FDA has just cleared Experimental New Drug Application (IND), paving the way for a Phase 1 clinical trial of LB1908 in the United States. A candidate drug is a CAR-T therapy designed to attack gastric and esophageal cancer and solid pancreatic cancer. A phase 1 trial of this candidate drug is already underway in China.

In the second announcement, Legend released new data from the ongoing large-scale CARTITUDE clinical trial program for ciltacabtagene autoleucel. This is a new treatment for severe multiple myeloma of the blood, which has no effective treatments and high unmet medical needs. The new data show ‘profound and lasting’ treatment responses among patients in several of the CARTITUDE trials, with an overall response rate of 98% after 2 years.

However, the most exciting development was the Food and Drug Administration’s approval in February of Carvykti, one of Legend’s new treatments for multiple myeloma. The US Food and Drug Administration’s move in May was followed by European Commission approval to begin marketing activities. Carvykti is a T-cell autoimmune therapy directed by BCMA, also called CELTA-Cell. Legend has an exclusive global licensing agreement with Janssen to market the Carvykti.

In addition to these clinical updates, Legend reported significant first-quarter financial results. This included $40.8 million in revenue, derived from development stages in licensed research programs. Legend also has $796 million in cash and cash equivalents available, compared to first-quarter R&D and general distribution expenses of $94 million, giving the company a cash path through 2024.

It was all enough for BMO analyst Kostas Belloris to make Legend one of his top picks in the biotech sector, and to determine an Outperform (buy) rating on the stock. Its price target, $77, means a one-year rise of 63%.

In support of his position, Pelioris points to several strengths of this company: “1) Marketing of Carvykti in Multiple Myeloma (MM) as the best first-line late CAR T treatment is expected to confer a significant revenue stream, providing negative protection; (2) will result in Continued expansion of the Carvykti population that can be addressed through approvals in ex-line treatments and areas outside the US drives incremental growth, resulting in long-term value appreciation; (3) readings of data coming from previous line treatments could lead to a short-term uptick and (4) the diversified pipeline provides optional and opportunity for further ascent.” (To watch Peleoris log, click here.)

Once again, we’re looking at a stock that has a consensus rating of Strong Buy; Legend 4 has received positive reviews from analysts recently. The average price target for LEGN shares is $72, which indicates a 52% increase from the current trading price of $47.24. (See Legend’s stock forecast at TipRanks.)

avipoint (AVPT)

The last stock we’ll look at here is AvePoint, one of the major players in the software industry. The company offers a cloud-based SaaS platform that provides solutions to migrate, manage, and protect data in conjunction with Microsoft 365. The New Jersey-based company was founded in 2001 and has adapted to the changing computing environment over the years, expanding its reach. A range of software products and solutions.

Looking at some numbers, AvePoint is proud to have managed over 125 petabytes of data, and its most recent quarter, Q1 22, showed 45% SaaS revenue growth and 30% year-on-year recurring (ARR) growth, bringing the total to 167.4 Million dollars.

The company’s increased revenue in SaaS brought the segment’s total to $26.6 million in the first quarter, from $50.3 million in the top line total. While revenue was on course to rise, earnings came in negative, with a diluted loss of 6 cents per share, although this compares favorably to the same quarter last year, when the EPS loss came in at 14 cents. AvePoint has good cash holdings, with $260 million in cash and short-term investments available.

5-star analyst Nihal Chokshi of Northland Capital Markets chose this stock as the top pick after a deep dive into the company’s performance. He was impressed with AvePoint’s future potential, writing: “We view the new long-term compound annual revenue growth rate of 25% as very conservative given our work highlights a highly differentiated capability for the core collaborative player MSFT and that our work validating AVPT is addressing The full $6.5 billion identified from TAM…. Other key parameters in our DCF system include 30% non-GAAP OM, which is 500 basis points over the minimum management guidance of 25%+ but corresponds to 30%+ Terminal OM. Which we’re assuming with other high-quality SaaS names under cover…”

These comments support Chokshi Outperform’s (buy) rating, while the $12 price target suggests a 138% rise in the next 12 months. (To watch the log of the Chukchi tale, click here.)

Both recent analyst ratings for this stock are positive, making it a unanimous moderate buy rating. The shares are selling for $5.03, and the average price target of $9.50 indicates a rise of 89% this year. (See AvePoint stock forecast at TipRanks.)

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Disclaimer: The opinions expressed in this article are only those of our featured analysts. The content is intended for informational use only. It is very important to do your own analysis before making any investment.

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