Goldman Sachs likes these 2 stocks battered for a triple-digit rise


Stocks are down, evident in almost every corner of the market, with – broadly speaking – only the energy sector and some outliers reviving investors in 2022.

When will the tide turn? Anyone can guess, but until it does, investors will have to hang in there and hope that the blurry macro picture eventually clears up.

However, this does not mean that the opportunities have completely dried up; the good thing about the market-wide pullback is that some names have pulled back so much that they now offer exceptional value.

As a result, stock analysts at leading investment bank Goldman Sachs focused on two names that are down, but far from out. In fact, analysts see them both claiming triple-digit gains over the coming year. Using the TipRanks database, we can also find out how these names rank among other Street analysts. Let’s dive into it.

Rent the track (LEASE)

We’ll start with a company that does exactly what it says on the tin. At Rent the Runway, you can basically get your hands on high-end fashion items for a short time, use them for any occasion, and then return them. The company sees itself as a trillion-dollar fashion industry disruptor, offering its female clientele membership plans, with the platform offering a huge selection of items from top brands – which will also benefit expanding their scope. The company is also touting its Closet in the Cloud service as the world’s first and largest shared designer closet.

The world may be in the throes of rampant inflation, war in Europe and a slowing global economy, but consumers still want to slip into nice clothes, regardless of macroeconomic conditions. That could be the conclusion following the company’s latest quarterly statement – ​​for 1Q22.

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RENT beat both high and low estimates. Revenue doubled year-over-year to $67.1 million while EPS came in at -$0.67. Wall Street analysts expected $64.1 million and -$0.73, respectively. At the same time, active subscribers increased by 82% compared to the same period last year, while gross margins increased by 9%. Even better, the second quarter outlook called for revenue between $72 million and $74 million, above the consensus estimate of $70.46 million.

Nevertheless, RENT’s stock price has fallen 61% so far this year. That’s not to say the stock isn’t healthy, according to Goldman Sachs analyst Eric Sheridan.

“Looking forward, our view remains that RENT is building on broad economic re-opening momentum and could prove more resilient economically as luxury consumers seek more affordable and flexible options in a tougher economic environment. . Long-term, we still see RENT as the leader in the subscription-based effort to drive adoption of the sharing economy theme in the apparel industry,” Sheridan said.

“In our opinion, RENT has created a two-sided discovery engine on its platform that allows consumers to find/explore a wide range of clothing choices and allows brand builders to scale their businesses while finding a cohort of consumers who help their brands expand their audience,” the analyst added.

The verdict? Sheridan gives RENT a buy rating with a price target of $9. Based on this target, the shares are expected to climb around 187% over the one-year period. (To see Sheridan’s track record, Click here)

The rest of the street is equally confident; a house full of buys – 9 in total – makes consensus on this stock a strong buy. Based on the average target of $11.11, stocks will add 254% over the next 12 months. (See RENT stock forecast on TipRanks)

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Modern (mRNA)

Everyone knows Moderna by now, but go back to early 2020, and the vaccine giant was barely known beyond biotech circles. Then came the Covid-19 pandemic and made Moderna a household name. You could argue that it’s the greatest success story of the pandemic era and built entirely on a single product – mRNA-1273 (Spikevax), its post-only approved Covid-19 vaccine. approval only by the Pfizer/BioNTech offer.

The problem for Moderna in the post-pandemic world is twofold; one, which comes next because the Covid vaccine is still its only approved product and its only revenue generator. And second, with the pandemic on its back in most parts of the world, how many eggs does this golden egg hen still have in it?

As for the first, the company has a large pipeline with 46 mRNA-based drugs in development, with mainly vaccines and some therapies targeting 4 different areas – infectious diseases, immuno-oncology, rare diseases and autoimmune diseases.

Some are in advanced stages of development – ​​Covid program aside – and include the cytomegalovirus (CMV) vaccine candidate, mRNA-1647, which is currently being tested in the pivotal Phase 3 clinical trial CMVictory and the candidate seasonal flu vaccine, mRNA-1010, for which the first participants recently received a dose in a phase 3 study.

Regarding that last question, the company has just reported positive Phase 2/3 interim data for its COVID booster candidate containing Omicron mRNA-1273.214. Moderna is preparing the regulatory filing it is expected to submit in the coming weeks and will hopefully allow the vaccine to be used as a fall booster.

It is this anticipated tailwind along with the undervalued pipeline that informs the bullish thesis of Goldman’s Salveen Richter.

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“We expect stocks to rise on news of the US government’s purchase of new vaccines for the fall, as this would show the upside potential of Advance Purchase Agreements (APAs) estimated at around 21 billion dollars by MRNA,” the 5-star analyst explained. “Overall, we believe investors are underestimating the optionality of MRNA’s platform, which has been significantly mitigated by the billions of vaccinations delivered over the past two years using mRNA technology. .”

Following the huge gains made during the pandemic, investor concerns about Moderna’s future along with negative macro developments have sent shares tumbling – they are now down around 54% year-to-date.

Richter, however, anticipates a significant recovery; the analyst has a buy rating for the stock backed by a price target of $290. The implication for investors? 147% increase. (To see Richter’s list, Click here)

What does the rest of the street think of Moderna’s prospects? It’s a mixed bag; based on 5 buys and takes each, plus 1 sell, analyst consensus rates the stock as a Moderate Buy. However, most believe that stocks are now undervalued; going through the average target of $215, they are expected to appreciate by around 84% over the coming year. (See Moderna’s stock forecast on TipRanks)

To find great stock trading ideas at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ stock information.

Disclaimer: Opinions expressed in this article are solely those of the featured analysts. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.


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