Given the recent market moves, investors are looking for direction. Guidance from either the Federal Reserve or analysts may offer some credence, in terms of a sign. But it has ultimately become a stock-picker’s market. One major Wall Street firm believes it has found a few stocks that offer huge upside potential.
RBC Capital Markets issued a few calls recently, and though there is no particular focus in terms of sector or industry, the main idea is upside. Each call is fairly positive, forecasting upside in both the near term and long term, but one idea offers nearly 80% potential upside.
While market headwinds have put a damper on the markets in general over the past few months, RBC Capital Markets believes that 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.
Matthew Hedberg reiterated an Outperform rating on Couchbase Inc. (NASDAQ: BASE) but lowered the $27 price target to $25 to reflect peer group multiple contraction with earnings coming out later. The price target implies upside of 78% from the most recent closing price of $14.06. Hedberg noted that he would expect slight upside to consensus estimates and also believes that valuation on the stock is “attractive” at three times enterprise value to expected 2023 sales.
The 52-week trading range is $11.68 to $52.26, and shares traded at $14 Wednesday morning. The stock is up about 44% year to date.
Jonathan Atkin reiterated an Outperform rating on Cyxtera Technologies Inc. (NASDAQ: CYXT) and raised the price target to $16 from $14, implying upside of 8% from the most recent closing price of $14.76. Atkin said in the report that his recent discussion with CFO Carlos Sagasta at RBC’s Global Communications Infrastructure conference suggests that there is good demand visibility for one to three years and that an inflationary and recessionary environment actually will be a positive for Cyxtera.
The stock traded near $14 on Wednesday, in a 52-week range of $7.51 to $15.42. Shares are up over 13% year to date.
Dun & Bradstreet
Ashish Sabadra downgraded Dun & Bradstreet Holdings Inc. (NYSE: DNB) to a Sector Perform rating from Outperform but raised the $16 price target to $18. That implies upside of 9% from the most recent closing price of $16.56. Sabadra noted that the company’s investments this year are “front-loaded” and will weigh on EBITDA growth in the first half. He expects Dun & Bradstreet’s free cash flow to remain below most information services peers.
Dun & Bradstreet stock has a 52-week trading range of $14.31 to $22.88, and it traded near $16 a share early Wednesday. The stock is down about 21% year to date.
RBC’s Craig Wong-Pan upgraded ResMed Inc. (NYSE: RMD) to an Outperform rating from Sector Perform and raised the price target to $244 from $233, implying upside of 16% from the most recent closing price of $210.85. The stock has fallen significantly over the past three months because of revised sales guidance caused by raw material constraints. Wong-Pan believes ResMed shares are now “overly penalized,” creating a buying opportunity, considering its strengthening leadership position in the obstructive sleep apnea market and earnings upside risk associated with price increases.
The stock traded near $212 on Wednesday, in a 52-week range of $189.40 to $301.34. Shares are down over 17% year to date. It has a dividend yield of 0.8%.
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