Written by Norman Isaac Mwambazi

These three “Strong Buy” transport stocks could soar at least 50% – JPMorgan analysts

So far, the 2021 stock market has not been as wild as it was last year, but it has had …

So far, the 2021 stock market has not been as wild as it was last year, but it has had a few events that have captured investor attention. Some of this includes the stimulus package that was passed early this year, the introduction of the infrastructure bill in July, the surge in COVID-19 infections caused by the delta variant of the coronavirus, the significant drop in unemployment claims and chip shortages, among others. With all this, the broader stock market has held on strong to weather the storm and to support this argument, the benchmark S&P 500 has grown 19% year to fate, and the tech-heavy NASDAQ is up 17% in the same period.

Marko Kolanovic, a strategist at financial services and investment bank JPMorgan (ticker: JPM), commented on the macro situation of the stock market in major economies like the U.S., Europe, and Asia, noting that activity indicators have passed their peak, and so growth is likely to stay significantly above trend into year-end.

While speaking to Yahoo Finance, Kolanovic said that improving global labour markets, positive shifts in China policy that has been strongly scrutinizing Big Tech in China and the planned implementation of the EU recovery fund to help European economies through the pandemic, will help improve the markets going forward.

Kolanovic also said that investors should not be worried about the cycle and the Federal Reserve Bank’s measures because they are independent factors. About the rampant delta variant, Kolanovic said that the government is unlikely to impose strict lockdown measures as they did at the pandemic’s peak last year.

With that in mind, analysts at JPMorgan have chosen three stocks that will thrive in the current market environment according to their performance in the past. These three stocks have “Strong Buy” recommendations from consensus analysts, and JPMorgan analysts think they will gain at least 50%.

Hyzon Motors (ticker: HYZN)

Hyzon Motors is a unique company in the ‘green’ automotive sector that is making sure it limits its carbon footprint to as low as possible. The company is using fuel cell technology as opposed to the common batteries used in cars. It produces trucks and commercial vehicles with a range of medium and heavy-duty trucks, full-sized urban busses, and long-distance bus coaches. Over 500 Vehicles have already been delivered from prototype and early-run production.

Hyzon Motors went public on July 19, 2021, through a SPAC merger with Decarbonization Plus Acquisition Corporation that saw Hyzon raise $550 in new capital and debuted on the Nasdaq stock exchange under the ticker symbol HYZN. The company said it is using the raised money to finance its expansion program, including a larger factory under construction that is projected to open in Rochester, New York, around June next year.

Hyzon Motors released its first earnings report since going public in August, highlighting the performance of its second quarter of the 2021 fiscal year (Q2 FY2021). The report, which didn’t disclose how much revenue it earned in that quarter, said it has $517 million in cash for operations.

JPMorgan analyst Bill Peterson, who now covers Hyzon Motors stock, has a “Buy” rating for Hyzon and believes that the company has a captivating risk reward. Peterson set Hyzon’s price target to $18, and if the stock hits or beats it, it will register a return of 78%.

Peterson’s positive outlook on Hyzon is backed by the company’s meaningful growth opportunities in the automotive sector and unique, differentiated product focused on producing hydrogen fuel cell vehicles.

Peterson says that Hyzon’s fuel cell technology has the potential to grow to rail transport, aviation and marine in the future. Currently, Hyzon has a market capitalization of $2.47 billion, and its stock is currently trading at $10 a share.

Blade Urban Air Mobility (ticker: BLDE)

Another stock JPMorgan analysts expect to register high gains is Blade Urban Air Mobility Inc. This New York-based company operates a platform that users can use to enjoy a luxurious flying experience by booking seats on scheduled flights throughout the Northeast and West Coast of the United States and arranging private charter flights.

Founded in May 2014, Blade has grown over the years to provide urban air mobility services to customers, mainly helicopter transit between the Manhattan and New York area’s airports. In addition to that, Blade also offers flights to other destinations like Long Island, and Massachusetts among others.

Yesterday, September 13, 2021, Blade announced that it would acquire Trinity Air Medical, a leading transporter of organs and tissues for transplant. In the announcement, Blade said it would pay up $23 million cash upfront for the deal; it is understood the company will recover this in less than two years because Trinity brings in a decent $16 million of revenue annually.

Just like Hyzon, Blade also went public this year through a SPAC merger with Experience Investment Corporation that saw the company raise $365 million in new capital. After closing the merger, Blade’s shares were listed on Nasdaq Stock Exchange under the ticker symbol BLDE on May 10, 2021.

Peterson also covers Blade for JPMorgan, and he has a “Buy” rating for the company with a price target of $16. If the stock hits this target, it will register a return of about 73%, and Peterson believes it has a strong growth momentum that should accelerate brand awareness.

With the new capital raised, Blade can expand into new destinations. The introduction of Electric Vertical Takeoff and Landing Aircraft (eVTOLs) by mid-decade could work in favour of the company. JPMorgan analysts aside, Blade has a “Strong Buy” rating from Wall Street analysts, with all four of them rating the stock a “Buy”. Blade’s stock is currently trading at $9.80, and it has a market cap of $679.70 million.  

Chindata Group Holdings (ticker: CD)

Just because Chinese regulators have been targeting Chinese Big Tech in the past few months does not mean you cannot pick up stock from that region that promises significant returns. JPMorgan analysts have their eyes stuck on Chindata Group, a major provider of carrier-neutral big data centre solutions in the Asia-Pacific region.

The company boasts big clients like leading tech companies in China, India, and Southeast Asian countries. Some of Chindata’s products and services in the IT sector include end-to-end project management, Research and Development (R & R&D), design expertise, data management, and supply chain management. All this is powered and housed at the company’s 578 megawatts server, and the company plans to deliver a 36-megawatt facility to the Chinese market in six months.

Chindata’s finances have transitioned from loss to profitability, with the company registering a net profit of $10 million for its second quarter of the 2021 fiscal year (Q2 FY2021) with a revenue of $106 million. This was a growth of 64% year over year.

Chindata stock is currently trading at $10.62 a share, and it has a market capitalization of $3.88 billion. JPM analyst Albert Hung covers this stock, gives it a “Buy” rating, and set its price target to $18. If Chindata hits this target in the next 12 months, it will have a return of 58%.

PS: This is not investment advice. This article only serves informational purposes. Stock prices quoted in this article are subject to change at any time.