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Wells Fargo: these 2 stocks can rise at least 30%
After the January liquidation, the first week of February trading saw the stock market steadily back in bullish mode. All three major indices closed the week at an approximate distance from historic highs, with the market reacting favorably to the latest job data and the Democrats’ decision to move forward with a $ 1.9 trillion stimulus package. So, where does the market go next? The investment firm Wells Fargo expects a long-term appreciation for the stock markets. In an attempt to look into the future, Wells Fargo senior global equity strategist Scott Wren says: “Playing on our expectation of a significant recovery from last year’s pandemic-induced contraction are factors we discussed in the past and we believe we will continue to be drivers this year. Positive news about vaccines, easy money policies pursued by the Federal Reserve and anticipated additional government stimuli helped the stock market … ”In this scenario, Wells Fargo analysts are hitting the table with two stocks, noting that each can rise in at least 30% next year. After examining the two in the TipRanks database, we found that the rest of the Street is also in the bullring. Guild Holdings (GHLD) The stock market may receive more headlines, but the housing market is where most Americans keep their wealth. The two markets intersect when real estate companies go public. Guild Holdings is a mortgage company that originates, sells and services real estate loans in the United States residential mortgage industry. The company is present in most states and operates through retail channels and word of mouth. The San Diego-based company made its IPO last year, in the second half of October. The opening was only moderately successful, with the stock holding at or close to $ 15, below the planned $ 17. Guild Holdings sold 6.5 million shares, down from the forecasted 8.5 million. The IPO raised $ 97.5 million, and the company has a current market capitalization that reiterates our GHLD overweight rating. $ 972.6 million. Looking ahead, Wells Fargo analyst Donald Fandetti believes the company is well positioned to benefit from the current climate. “Despite the increase in interest rates, we believe that management has taken a confident stance that its business model should remain relatively well, given its buying / retail orientation. There is also an opportunity to fill your agency’s footprint in areas such as the 10-year increase in income for the year changed the investor’s sentiment even more negative for the originators “, said the analyst. In this environment, Fandetti continues to “favor value and buy market exposure”, hence his optimistic position on stocks. In line with these comments, Fandetti classifies GHLD as Overweight (ie, Buy), and its $ 22 price target indicates a 36% growth potential for the following year. (To see Fandetti’s history, click here) Likewise, the rest of the Rua is embarking. 4 purchases and 1 waiting attributed in the last three months add up to a strong buying analyst consensus. The stock is selling for $ 16.21, and its average target price of $ 19.30 implies a 19% increase in one year. (See GHLD inventory analysis at TipRanks) PDC Energy (PDCE) Next, PDC Energy, is a hydrocarbon producer based in Denver, Colorado. The company has operations in Wattenberg Field in its home state, as well as in the Delaware Basin of the Texas Permian oil formation. PDC produces oil, natural gas and natural gas liquids through an aggressive horizontal drilling program. PDC saw revenues drop in 1Q20 and even more in the second quarter – but net revenue advanced in the right direction in the third quarter. The company raised $ 303 million in that quarter and, on an adjusted basis, posted a profit of $ 1.04 per share. Looking at the fourth quarter report, which will be released in late February, the company is expected to show 92 cents per share in earnings. In some additional positive metrics, the PDC produced a total of 192,000 barrels of oil equivalent per day in the third quarter, for a total of 17.7 million Boe. The company generated net cash from operations of $ 280 million and saw a free cash flow of $ 225 million. During the third quarter, the PDC was able to pay $ 215 million in debt. Analyst Thomas Hughes, in his note on Wells Fargo’s shares, is impressed by the company’s free cash flow and the potential for future production. “The generation of FCF will take the absolute debt to less than US $ 1.5 billion at the end of 1Q21 according to our model, an important number, since the returns to shareholders (repurchases first) are based on this achievement … debt falls below $ 1.5 billion, the company is likely to take a stereotyped approach to distributing FCF … Although there is a high regulatory CO risk, PDCE has been successful in accumulating licenses and DUCs for future development, ”wrote Hughes . To that end, Hughes classifies the stock as Overweight (ie Buy), and its target price of $ 33 shows his confidence at a 30% rise for the next 12 months. (To see Hughes’ history, click here) It is not always that all analysts agree on a stock, so when it does, write it down. PDCE’s strong consensus rating is based on 10 unanimous purchases. The average target price of $ 27.90 suggests 10% and a change from the current share price of $ 25.35. (See the PDCE stock analysis on TipRanks) To find good ideas for trading stocks with attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all TipRanks stock insights. Disclaimer: The opinions expressed in this article are exclusively those of the analysts presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investments.