JPMorgan Chase & Co. (NYSE:JPM), the world’s largest publicly traded bank by market cap, issues market and stock predictions throughout the year. The bank has a cautious outlook on the economy for 2023, as it expects the Federal Reserve to raise the benchmark interest rates again in the near term.
While the inflation levels remained flat in October, raising hopes regarding a pause on further rate hikes, JPMorgan CEO Jamie Dimon expects the Fed to resume rate hikes next year.
“Personally, I think people are overreacting to short-term numbers — and they should stop doing that,” Dimon said. “I think inflation is probably a little stickier than that [data] shows.”
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Dutch Bros
Dutch Bros Inc. (NYSE:BROS), one of the most prominent coffee chains in the U.S., was recently upgraded by JPMorgan to Overweight. The multinational bank expects Dutch Bros stock to hit $35, indicating a potential upside of over 22%.
Investors have been optimistic regarding Dutch Bros stock after the company reported impressive revenue growth in the last quarter. In the third quarter, the company generated record revenue of $265 million, reflecting a 33% rise year over year. Dutch Bros’ net income rose by over 737% year over year to $13.4 million in the last quarter. Shares of BROS have surged by over 10.9% over the past month.
Dutch Bros also upgraded its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) outlook by $15 million to $150 million to $155 million for the current quarter because of stronger-than-expected year-to-date profitability. The company also raised its liquidity position in the last quarter, which should boost its long-term growth rate.
“During Q3 in a span of less than 45 days, we executed two transactions, an upgrade of our credit facility and a follow-on equity offering that unlocked a total of almost $500 million in incremental liquidity and positioned our balance sheet to support a long runway of growth. We intend to continue confidently pursuing high-quality investments in new shops on our path to 4,000,” Dutch Bros CEO Joth Ricci said in the company’s latest earnings release.
Hubbell
Hubbell Inc. (NYSE:HUBB), which specializes in electrical and utility products, has had a good year so far, with its shares rising by over 26% year to date. JPMorgan expects HUBB to rise further, as it upgraded the stock to Overweight on Nov. 17. The bank has a price target of $35 on the stock, indicating a potential upside of over 12%.
Hubbell agreed to purchase Northern Star Holdings Inc., also known as Systems Control, maker of substation control and relay controls, for $1.1 billion last month. This should boost Hubbell’s financials significantly, as Systems Control is expected to record sales worth $400 million in fiscal 2024.
“Systems Control has a strong track record of financial performance and is highly complementary to Hubbell’s portfolio, enabling us to deliver additional value to our core utility customers while enhancing our overall growth and margin profile for shareholders,” Hubbell President and CEO Gerben Bakker said in a press release.
Analysts expect Hubbell’s revenue to amount to $1.32 billion for the fourth quarter, indicating an 8.1% rise year over year. The consensus earnings per share (EPS) estimate of $3.54 for the ongoing quarter reflects a 36.2% rise over the same period.
VF Corporation
JPMorgan is bullish on Denver-based lifestyle apparel and footwear designer VF Corp. (NYSE:VFC), which operates brands such as Vans and North Face under its umbrella. JPMorgan raised its price target on VF Corp. from $15 to $19, indicating a potential upside of over 14%.
While the company’s sales margin plummeted in the second quarter, CEO Bracken Darrell has been taking steps to restructure the business, focusing on a “Vans turnaround.” This comes as Vans sales fell 23% year over year in the last quarter.
“I see four things that we need to do,” Darrell said. “And then we’ll have a bigger strategy that will follow.”
This involves cost-reduction strategies, establishing a global commercial structure, reducing debt levels and deleveraging the balance sheet as well as appointing a president for the Vans segment.
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