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Wells Fargo: 3 stocks are now available to buy
Wall Street ran into some troubles last week. As the presidential election is only two days away, the number of COVID-19 has soared, while hopes for pre-election stimulus packages have diminished, and the stock market has had its worst week since the March pandemic. The three major US stock indexes also fell for the second consecutive month. According to experts on Wall Street, uncertainty is dominating the market. That said, some strategists pointed out that the Federal Open Market Committee meeting to be held from November 4 to 5 this month may help reassure investors. If more liquidity is provided, even if there are no other stimulus measures, stocks may also be able to gain returns in the medium to long term. What’s more, professionals believe that the recent sell-off may provide an opportunity to snap up compelling names at a more attractive entry point. With this in mind, we asked the professional stock pickers of Wells Fargo for some inspiration. This investment company is ranked in the top ten on TipRanks’ list of best research companies. After examining three stock quotes supported by Wells Fargo, we used TipRanks’ database to find out why the company’s analysts see everyone as such an exciting opportunity. RealReal (REAL) First of all, we own RealReal, which is the leader in online certified luxury consignment sales. After establishing an important new partnership, Wells Fargo has high hopes for the retailer. On October 5th, REAL announced a new partnership with Gucci. Gucci is one of the most popular brands on the REAL platform. Under the terms of the transaction, the two companies will develop an online platform to sell Gucci second-hand products, and the site will also promote the development of the luxury goods circulation industry. The platform will operate as one of the websites on the REAL platform and will host products mainly provided by third-party shippers and some products directly provided by Gucci. For every item sold, the company will plant a tree through the non-profit organization One Tree Planted. Analyst Ike Boruchow, representing Wells Fargo, saw some positive effects from this cooperation, which represented “a clear victory for the bulls in the short term.” He explained: “The fact that REAL is cooperating with one of the world’s most well-known luxury brands will greatly improve their reputation among consumers (and the luxury industry as a whole). Interestingly, Marco Bizzarri, CEO of the Gucci brand, said In an interview with Women’s Wear Daily, the increasing popularity of the resale market is very interesting for us.” In addition, the agreement also reflects another means of obtaining supply, which is crucial because Boruchow believes that “release Supply is one of the biggest growth drivers of REAL”. He further pointed out that even if Gucci only supplies a limited number of products, it will “increase the supply of REAL.” Boruchow believes that if this is not enough, this partnership can highlight the environmental benefits of the resale market. Analysts believe that this will continue to make the “resale market more attractive to consumers who are increasingly aware of sustainability and environmental factors.” In terms of business fundamentals, Borouchow believes that by 2020, supply has exceeded demand, especially during the COVID-19 pandemic. In other words, REAL has found a new supply method that can “help release REAL’s long-term growth potential.” To sum up, Boruchov commented: “Therefore, we believe that in the next few quarters, the total value of goods will continue to grow, and the long-term runway growth is very noticeable.” As a result, Boruccio stayed with the Bulls. In addition to giving an “overweight” rating, he also set a target price of $20 for the stock. If this goal is achieved within the next twelve months, investors may gain 59%. (To see Boruchow’s track record, click here.) When moving to other places on Wall Street, opinions are almost evenly distributed. In the past three months, 3 buys and 2 positions have been allocated. Wall Street’s view is that REAL is a medium buy. The average target price is $17.25, implying an upside potential of 37%. (See RealReal price targets and analyst ratings on TipRanks) JELD-WEN (JELD) Next, we are JELD-WEN, which is one of the largest door and window manufacturers in the world. Wells Fargo called JELD one of the company’s “favorite housing equity,” and he thinks something big might happen. Analyst Truman Patterson wrote an article for the company telling customers that according to his channel inspections, Windows and Interior Doors channel inventory is low, and the delivery cycle has been extended by 2-3 weeks. This led analysts to the following conclusion: “Industry manufacturers of both products are operating at or near full capacity.” It should be noted that in the past few years, JELD has to deal with the inefficiency of Windows. Sometimes it is caused by the inability to adapt to rapid changes in demand.” The analyst said that this has shaken investor confidence and led to a decline in valuation. Having said that, Patterson saw better days. “Despite an unexpected rebound in demand after the COVID, which caused JELD to increase its production capacity to a level close to full capacity, we believe that JELD has improved its Windows manufacturing business because contacts indicate that the company’s product quality control issues are a thing of the past. Footprint rationalization and the JEM plan are beginning to receive attention. This is a smooth flow for potential EBITDA of more than 200 million US dollars. We have brought doubtful benefits to management.” Most importantly, he believes that improving production and operations itself should lead to multiple expansions. Fortunately, the price announcements for both products are reliable. Patterson believes that after the unprecedented increase in interior door prices earlier this year, JEDL and its peer Masonite seem to be structurally increasing industry prices. In response, the analyst said: “In addition, JEDL seems to have announced a nationwide increase in window prices of 7%-11% (3 points higher than normal), and major competitors have also adopted similar increases. In view of the above two products With the shortage of the entire industry and the rapid rebound of New Res, we believe that JELD will be able to achieve at least the traditional 40%-50% of the announced price in its product portfolio.” Therefore, Patterson believes that JELD’s pricing in North America will reach 2021. In the 4.5% range, after experiencing SG&A/investment inflation after COVID, he expects the EBITDA margin to increase by 200-300 basis points. He said: “We don’t think the above market can be fully recognized by Wall Street, because JELD is only one of the three stocks in our 20 companies HB / BP coverage that are flat or so far.” The most important thing is that there is only one manufacturing problem. This is due to timing errors in the large Home Center and unexpected product line resets. “Given that the strong demand environment may depress inventory levels in home centers (HD/LOW SSS increases by 20%-30%), we believe that HC will ensure that it does not disrupt its supply chain and should be more receptive to price increases.” Patterson Say. So, it is not surprising that Patterson gave the stock an “overweight” rating and a target price of $32. For this reason, the upside potential is 52%. (To view Patterson’s track record, click here.) Other analysts are more cautious about JELD. The holding consensus rating is divided into 3 buys, 6 holds and 1 sells. The average target price is US$24.35 and the upside potential is 16%. (Please refer to the JELD-WEN stock analysis on TipRanks) Associated Bank (ASB) is the largest bank headquartered in Wisconsin. Its branch network covers more than 200 locations and provides services to more than 100 communities. Three communities have footprints in the central states of Wisconsin, Illinois and Minnesota. Although the company had to overcome some challenges, Wells Fargo believes that it has taken a step in the right direction. Company analyst Jared Shaw told clients that despite the mixed results in the third quarter, he has high hopes for the bankers. The higher-than-expected provisioning expense resulted in earnings per share of US$0.24, which was US$0.01 higher than the market consensus. For NIM, management believes that the 2.31% figure is a low point, and profit margins will start to increase from then on. Due to oil and gas (retained at 15.3%), the NCO increased from 44 basis points to 49 basis points, while the NPA increased by 24 basis points. This was due to the fluctuation of credit, which benefited from two aspects. Relocation of shopping mall REITs. However, “deferred is a bright spot”. In contrast, total deferral fell from the peak level by 69% to 2.1% of loans, while the average deferral of peers fell by 72% and loans fell by 2.8%. Xiao said: “So far, the postponed consumer loan cure rate has reached 97%, which makes us optimistic about the remaining balance.” In addition, the ALLL ratio increased by 8 basis points from the previous month to 1.60% before the PPP. Xiao said: “We expect that there will be almost no incremental construction from here, because we see that the most risky areas have been fully reserved and are encouraged by the postponement trend.” Fortunately, ASB is the number one in Shaw’s report. Bank, highlighting the cost-saving plan due to COVID-related shutdowns. With the reiteration of spending targets announced last month, these initiatives appear to be paying off. Expenditure in the fourth quarter is expected to be 175 million U.S. dollars, 2021 is expected to be 685 million U.S. dollars, and the estimated core expenditure in 2020 is 712 million U.S. dollars. If it reaches the figure of 685 million US dollars, this will be the lowest annual expenditure level since 2014. “Due to the tailwind of the spending plan, NIM may be improved, the stock trading price only accounts for 87% of the current TBV, and the dividend is only 5.1%,” Shaw believes that ASB stores things. In accordance with his optimism, Shaw and the bulls side by side, reiterated the “overweight” rating and $18 target stock price. This goal expresses his confidence in ASB’s ability to climb another 31% next year. (To view Shaw’s transaction history, click here.) According to the market consensus segmentation, 1 buy and 3 holds have been issued in the last three months. Therefore, ASB received a medium buy consensus rating. Based on an average price target of $15.67, the stock may rise 14% next year. (Please refer to the relevant Banc-Corp price targets and analyst ratings on TipRanks) Disclaimer: The views expressed in this article are those of featured analysts only. The content is for reference only. Before making any investment, it is very important to conduct your own analysis.
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