The analysts of JP Morgan they present two stocks which, in their opinion, would be characterized by a potential upside margin of more than + 40%. The names of the two actions are Olin, con ticker OLN, e GFL Environmental (GFL).
The couple, it must be said, not only entered into the good graces of JP Morgan, given that, according to what emerges from the TipRanks platform, the securities generally benefit from a rating “strong buy” from the vast community of Wall Street analysts.
Olin is an American company that has its roots in 1892, when it was born as a gunpowder supplier company. Since then, Olin has come a long way, becoming group producer and worldwide distributor of chemical productsto the point that today it is officially the world‘s leading producer of chlorine, caustic soda and derivatives.
With a market share of around 6%, Olin holds the de facto first place in the ranking of active companies in the global chlorine and caustic soda market.
At the end of July, the group released its accounts for the second quarter of 2022, which showed revenue growth + 18% year-on-year, to $ 2.62 billion, against eps earnings per share of $ 2.76, better than the $ 2.57 expected by the consensus.
Beyond the quarterly report, what caught the interest of shareholders was above all the company’s buyback activity. Activity which materialized in the second quarter of the year with the repurchase of 7.4 million shares and which amounted in the entire first half of the year to $ 689.7 million.
The group then announced another $ 2 billion buyback plan, which adds up to the remaining $ 362.5 million from the previous program, which is a leading factor Jeffrey Zekauskas of JP Morgan to estimate that “Olin will spend $ 1.4 billion this year on share repurchases,” continuing with buybacks in subsequent years.
Among other things, the analyst explained, “Olin is pursuing these share purchases by tapping into cash flow, without using any leverage”. Also for this, “we do not see why these buybacks cannot continue at the same pace in 2023 or even in the next few years, should the value of the shares not become significantly higher. That said, we believe Olin may be comfortable buying back the stock at least as long as it is hovering around $ 65 ″.
A tal fine Zekauskas ha un ratimg su Olin pari a Overweightagainst a target price of $ 85, which it attributes to the quotes an upside margin of approximately 67%.
The other stock JP Morgan is particularly bullish about is GFL, a company that provides waste management services and whose name is an acronym that stands for Green for life.
The company provides services to families, companies, municipalities and institutional customers spread throughout Canada, with customers also in more than half of the US states.
With a workforce of more than 19,000 employees, GFL is the fourth largest company in the US operating in the environmental diversification services sector.
In the quarterly report just released, the group reported an adjusted EBITDA of 453 million Canadian dollars, beating the 427 million expected by the Wall Street consensus. The turnover amounted to 1.708 billion dollars, also in this exceeding expectations, which were for a value of 1.559 billion.
The outlook is even better, with the company that improved its 2022 revenue estimates by C $ 400 million at the midpointalso revising the adjusted EBITDA estimates of $ 20 million upwards.
Although JP Morgan’s Stephani Yee believes costs are impacting the group’s margins, the bullish view remains intact. So much to assign to the title an Overweight rating and a target price of $ 42, thus foreseeing an upside margin of + 47% from now to one year.