Are you hoping for a better performance from your portfolio in the latter half of this year than you achieved during the first half? It may require a slightly different selection of stocks.
Here’s a closer look at three of the market’s better-known names with more near-term upside than most other tickers. Namely, each of these stocks is currently priced well below analysts’ consensus, although there’s far more working in their favor than just this relative discount.
CRISPR Therapeutics
Shares of gene-editing drug specialist CRISPR Therapeutics (CRSP) have been stuck in neutral since 2022. Although its first-ever approved drug Casgevy works well enough as a therapy for sickle cell disease, since each patient’s treatment is custom-built, it can take several months — even up to a year — to complete the process.
The treatment’s seven-figure price tag may also be slowing things down. That’s why the company hasn’t actually reported any real product revenue yet, despite the drug’s late-2023 approval.
It’s coming. though. As of the first quarter, over 500 people have begun the Casgevy treatment process, prompting analysts to expect $40 million worth of revenue this year, en route to over $160 million in sales next year. Simply moving in the right direction could get buyers off the sidelines and into the stock.
Analysts collectively say this ticker is worth $83.53 per share, up 75% from its present price.
Microsoft
It’s been a miserable past 12 months for Microsoft (MSFT) shareholders. The stock’s down 25% from last August’s peak, mostly due to worries over the company’s slowing cloud computing (and AI) business.
All this trouble, however, is arguably already priced into this stock (and then some), at a point when CEO Satya Nadella finally appears willing to acknowledge it, and then do something about it. The company announced in early July that it would be laying off nearly 5,000 employees, with a big piece of that reduced headcount coming from its soon-to-be-overhauled Xbox unit. Look for similar evolutions going forward, too.
Analysts seem to be expecting them, anyway, with a turnaround from the stock to soon follow. Their 12-month consensus price target of $554.77 is more than 40% above Microsoft shares’ price right now.
Recursion Pharmaceuticals
Finally, add Recursion Pharmaceuticals (RXRX) to your list of stocks with a great deal of near-term upside. Analysts say it’s worth an average of $7.25 per share, or over 100% more than the ticker’s current price.
It’s not a pharmaceutical company in the traditional sense. Rather, it’s a technology company that’s built an artificial intelligence platform to virtually test how a particular drug molecule might perform as a treatment for a particular disease. It doesn’t replace clinical testing, but it does help determine what’s worth pursuing, and what isn’t.
So far, its business has been modest — mostly upfront or milestone payments, and grants. Some of its drug developments are within sight of late stages, like the cancer drugs it helped Sanofi figure out. Meanwhile, look for updates on its own polyp-fighting REC-4881 and oncology drug REC-1245 later this year and/or early next year.
With the proverbial endzone in sight, investors soon might start taking interest in this stock again.
— James Brumley
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Source: The Motley Fool
