Goldman Sachs: These 3 stocks are expected to rise over 100%
The markets are volatile and unpredictable fluctuations turn the final sessions into something of a roller coaster ride. The major indices fell sharply late last week, but the release of economic data on Friday showing strong manufacturing activity provided a rebound that somewhat reduced market losses. The most recent earnings season also gave cause for optimism: The companies listed on the S&P posted a total of 46% profit growth in the first quarter compared to the previous year, compared to the expected 20%. Goldman Sachs strategist David Kostin sees the generally positive macro data as support for stocks in an uncertain market environment. “The combination of global reopening, increased consumer savings and strong corporate leverage will result in a significant recovery in economic and earnings growth. US equities will continue to gain, albeit at a slower pace than has been characterized over the past 12 months, compared to cash and bonds, ”said Kostin. With that in mind, we turned our attention to three stocks that Goldman Sachs believes have oversized growth prospects, with the company's analysts forecasting an upside potential of over 100% for each stock. Using TipRanks' database, we found that the rest of the road is on board as well, as everyone has a consensus rating of “Strong Buy”. Rain Therapeutics (RAIN) We're starting a newly listed biopharmaceutical company Rain Therapeutics. The company is developing a tumor-independent treatment strategy that selects patients based on underlying genetics rather than the histology of the disease. Rain has two drug candidates in the pipeline, RAIN-32, which is in multiple clinical trials, and RAD52, which is still in preclinical study. Upon closer inspection of the pipeline, we find that RAIN-32, an MDM2 inhibitor called milademetan, has a Phase 3 study for WD / DD liposarcomas scheduled to begin in the second half of this year. At the same time, a phase 2 study, an MDM2 basket study, is planned for 2H21. In addition to the WD / DD phase 3 and phase 2 basket studies, the company intends to start another phase 2 study in intimal sarcoma by early 2022. RAD52, the company's second pipeline candidate, is a novel approach to the treatment of breast, prostate, pancreatic and ovarian cancers. The drug is still in the early stages of research, but selection of lead candidates for clinical trials is expected to begin sometime next year. As mentioned above, Rain is a newly listed company. The IPO took place in April of this year. The company has placed 7,352,941 shares at $ 17 each in the American public markets. The IPO generated gross proceeds of approximately $ 125 million. Analyst Graig Suvannavejh, who opens coverage for this stock for Goldman Sachs, writes: “While we are optimistic about RAIN-32's prospects for LPS, the revenue opportunities appear modest as we forecast maximum risk for unadj./adj. Revenue of $ 612M / $ 428M (assuming a 70% POS) with an annual incidence of only approximately $ 3,000 in the US. However, our enthusiasm for RAIN is also based on the potential of RAIN-32 beyond LPS, including intimal sarcoma (an ultra-orphan cancer) and also MDM2-enhanced solid tumors, which we see as significant market opportunities. In these three cases, we forecast a maximum annual risk of $ 2.2 billion / $ 859 million. Sales in the US / EU5, with additional future indications for RAIN-32 (trials starting in 2022) and a preclinical RAD52 program (a synthetic lethality game) that represents the upside to our projections. “Consistent with its bullish stance, Suvannavejh is looking to buy RAIN and its target price of $ 56 implies room for a staggering upside of 252% over the next 12 months. (To see Suvannavejh's track record, click here.) Turning now to the rest of the road, other analysts echo Suvannavejh's opinion. As only buy recommendations were published in the last three months, RAIN achieved a strong buy analyst consensus. With an average target price of $ 33.75, stocks could gain 112% from current levels. (See RAIN stock analysis on TipRanks) Relmada Therapeutics (RLMD) The next stock on Goldman Sachs' radar, Relmada Therapeutics, is a clinical-stage pharmaceutical company focused on central nervous system issues. REL-1017, the company's lead candidate in the pipeline, is a novel NMDA receptor channel blocker currently in development for the treatment of depression. Mental health is a critical segment of the pharmaceutical industry, and the mental health antidepressant is expected to top $ 18.5 billion by 2027. Relmada started RELIANCE I, the first central study with REL-1017, the drug as an add-on treatment for major depression in December last year. Last April, two more studies were underway, RELIANCE II and RELIANCE-OPS. All three are currently ongoing, and a fourth Phase 1 study of REL-1017 as a monotherapy is scheduled to begin in the first half of this year. The publication of the most important data from the two central studies is planned for 1H22. Goldman Sachs analyst Andrea Tan has covered this stock with a buy rating and a target price of $ 78, which implies an uptrend of 103% over the next 12 months. (To view Tan's track record, click here.) “We are identifying a number of key events in 2021+ that could fuel diverting value: (1) Human Abuse (HAP) study against positive control oxycodone in 2Q21 and ketamine in 2H21 where we view the market as the price of too high a risk of a negative outcome (see scenario analysis inside); (2) topline data for REL-1017 monotherapy in 4Q21; and (3) topline pivot data for additional MDDs (GSe peak sales of $ 2.5 billion in 2033) in 1H22 followed by NDA filing, all of which improved efficacy given the differentiated profile that has a rapid onset of action and shows improved effectiveness, so far, good tolerability has been constructive, ”said Tan. What does the rest of the street have to say? 3 buys and no holds or sells results in a strong buy consensus rating. Given the average target price of $ 67.67, stocks could rise 76% over the coming year. (See RLMD stock analysis at TipRanks) Agiliti (AGTI) We'll conclude our look at high potential Goldman picks with Agiliti. The company is a medical device provider, providing hospitals and healthcare systems with a range of bariatric, beds, therapy mattresses, fall protection devices, ventilators, breast pumps, patient monitors, medically reclining chairs and surgical equipment – along with tech support, clinical engineering and on-site Management to properly use, maintain and customize the myriad of devices. In numbers, Agiliti has more than 90 service centers in the lower 48 states that support more than 800,000 medical devices in over 7,000 acute and alternative medical facilities. On April 23 of that year, Agility debuted its stock on the NYSE in an initial public offering that was originally valued at $ 14. The company launched over 26.3 million shares and had gross proceeds of approximately $ 431.5 million on the first day of its IPO. Last week, Agiliti released its first quarterly financial report as a public company. Revenue was $ 235 million, 31% higher than last year. Net income was $ 9.6 million, up $ 22.2 million from a net loss for the first quarter last year, and earnings per share were 9 cents per share. Looking at the company's future path, Amit Hazan, an analyst at Goldman Sachs, commented: “Although this was not reflected in the closing balance for the first quarter, management offered a pro forma leverage after the IPO of about 3.3 times . Although the management is somewhat constrained from a management standpoint due to Northfield's requirements, it expects both financial and management flexibility to conduct opportunistic mergers and acquisitions by the end of this year. “We see AGTI's end-to-end service model as differentiated and ideally suited to today's hospital operating environment. We see the current valuation as an attractive entry point …” To this end, Hazan gives AGTI shares a buy rating and its target price of 43 USD implies an upward trend of 151% for the coming year. (To see Hazan's track record, click here.) In its first few weeks in the public markets, AGTI shares received 9 valuations, including 8 purchases and 1 holding. The stock is selling for $ 17.12, and the average target price of $ 21.39 suggests it has upside potential of ~ 25% for a year. (See AGTI stock analysis on TipRanks.) Good ideas for trading stocks at attractive valuations can be found at TipRanks “Best Stocks to Buy”, a newly introduced tool that brings together all insights into TipRanks' stocks. Disclaimer: The opinions expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only, it is important to do your own analysis before making an investment.