We all want a crystal ball, something that allows us to see a few months into the future and know how the markets will develop. Of course, that won’t happen, but it won’t stop investors from looking for clues.
In this endeavor, experts know the key lies in the data. Madison Faller, a global investment strategist at JP Morgan, looked for the repeating patterns and found at least one that seems informative for today’s investors.
“Over 100 trading days, the S&P 500 is up more than 10%. That is well above the historical average for a full year. While past performance isn’t indicative of future results, such strong gains also usually indicate more strength for the rest of the year. Since 1950, whenever the S&P 500 has risen at least 10% in the first 100 trading days, stocks have finished the entire year with an average return of about 25%. Sounds familiar? This time last year, the S&P 500 was up over 8% and later ended the year with a gain of almost exactly 25%,” Faller said.
Some of Faller’s colleagues among JPMorgan stock analysts have embraced the idea of strong gains this year, identifying two stocks with the potential for up to 220% upside.
In fact, it’s not just JPMorgan that favors these names. Using the TipRanks database, we found that both are also rated as ‘Strong Buys’ by analyst consensus. Let’s take a closer look at that.
Kyverna Therapeutics (KYTX)
Autoimmune diseases pose a challenge to the biotech industry. They tend to be both chronic and progressive, causing increasingly serious and/or uncomfortable problems for patients over time – but they are also notoriously difficult to treat and often resistant to the therapeutic agents tried against them. Kyverna, the first stock we’ll look at here, is a biopharmaceutical company with an autoimmune focus, working on novel chimeric antigen receptor T-cell (CAR-T) therapies designed to ‘reboot’ the immune system and induce treatment-free remission to initiate. .
CAR T-cell drug therapies have already proven successful in treating hematological cancers, and Kyverna believes the action of these agents can be used advantageously against autoimmune diseases.
Kyverna’s lead drug candidate is KYV-101, a CAR-T therapy that has demonstrated robust efficacy and well-tolerated safety profiles in several autoimmune diseases. Currently, KYV-101 is progressing in multiple clinical trials, including Phase 1/2 trials for lupus nephritis (LN) and systemic sclerosis (SSc), and Phase 2 trials for myasthenia gravis (MG) and multiple sclerosis (MS). As of May 14, the company has treated a total of 30 patients for all four targeted diseases, including 8 with myasthenia gravis, 7 with lupus nephritis and 4 with multiple sclerosis.
To fund the expensive series of these clinical trials, Kyverna conducted its initial public offering in February this year, becoming the fifth pharmaceutical startup to go public in 2024, raising $366.9 million in gross proceeds. In its Q1 24 report, Kyverna disclosed that it had $369.8 million in available cash and other liquid assets.
For JPMorgan analyst Brian Cheng, the key point is the solid progress of the company’s clinical program. The analyst is optimistic about the potential of Kyverna’s approach and looks forward to upcoming data releases from the clinical trials.
“We believe that Kyverna, armed with compelling clinical evidence to date, is at the forefront of deploying CAR T cell therapies across multiple autoimmune indications. The evidence to date is compelling and consistent with the results of academic research… We expect early insights from a handful of points – possibly from the Ph 1/2 KYSA-1 (USA) and Ph 1/2 KYSA-3 (Germany ). ) trials. We believe this will be an important milestone for the co. as the data evolves beyond the initial set of named patient cases.”
Cheng then rates Kyverna stock Overweight (i.e. Buy), along with a $39 price target, indicating his confidence in ~210% upside potential over the next twelve months. (To view Cheng’s track record, click here)
Overall, Kyverna’s Strong Buy consensus rating is based on four recent positive analyst ratings, making it unanimous, and the stock’s $42.75 average price target is even more bullish than JPMorgan’s view, indicating on a one-year gain of 241% from the current trading price of $12.53. (To see KYTX Stock Prediction)
Structure therapy (GPCR)
JPMorgan’s second pick is Structure Therapeutics, a global clinical-stage biopharmaceutical company committed to discovering and developing novel orally dosed therapeutics for chronic metabolic and pulmonary diseases. The company takes its name from its structure-based drug discovery platform, which has enabled the creation of a robust pipeline of drug candidates.
Two of these drug candidates are in human clinical trials: GSBR-1290 and ANPA-0073. Each is a small molecule compound created specifically to overcome the natural limits of biologics and peptide therapies. Structure’s pipeline is focused on the GPCR family of drug targets, hence the company’s stock price.
The lead drug candidate in Structure’s pipeline is GSBR-1290. This is a selective GLP-1R agonist that addresses obesity and has completed a Phase 2a study. The company expects to release topline this month. The data release will include complete 12-week efficacy data for 40 patients, as well as safety and tolerability data for all 64 patients. The company is preparing for later-stage clinical trials and says it is on track to initiate a global Phase 2b obesity study of GSBR-1290 in the fourth quarter of 2024. An additional Phase 2 study, in T2DM, is planned for the second half of this year.
Structure’s second lead drug candidate, ANPA-0073, is an oral small molecule apelin receptor (APJR). This drug candidate has completed a Phase 1 study with single and multiple ascending doses and is considered ready for Phase 2 for potential selective or muscle sparing weight loss. The company is also evaluating ANPA-0073 idiopathic pulmonary fibrosis (IPF). The completed Phase 1 study found that ANPA-0073 was generally well tolerated and patients in the study reported no serious adverse events.
Analyst Hardik Parikh, who follows JPMorgan stock, notes that there is a big opportunity in obesity treatment, and that even grabbing a small piece of that pie would be a solid achievement.
“We believe the opportunity for oral GLP-1s is undervalued and believe this market could generate $30 billion in sales by 2035. GPCR’s leading asset, 1290, is a pure option for this opportunity, and even a small stake could make a substantial contribution. according to our estimates). We expect the next generation of oral GLP-1s to gain significant market share over time, and at this point GPCR has some advantages over several other companies looking to enter the market (ex-LLY/Novo). These include 1) a small molecule formulation and 2) a small time-to-market advantage, and we believe 1290/Structure could be an attractive partnership opportunity for larger biopharmaceutical companies looking to participate in the T2D/Obesity market” , Parikh opined.
These comments support Parikh’s Overweight (i.e. Buy) rating on GPCR, and he gives the stock a $65 price target, implying 90% one-year upside potential. (To view Parikh’s track record, click here)
The broader market picture is even more bullish. There are eight analyst recommendations available for GPCR, and all are positive – for a unanimous Strong Buy consensus. The shares are priced at $34.20 and the average target price of $77.13 suggests ~125% upside in the coming year. (To see GPCR Stock Prediction)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important to do your own analysis before making an investment.
