Evercore offers to buy 2 shares

As fears of high inflation and the threat of a recession become the talk of the town, investors are turning to Wall Street experts for advice, namely Julian Emanuel, Evercore ISI’s chief equities and quantitative strategist.

Emanuel sees signs of a looming recession, pointing out that the last market downturn last fall occurred before the general economic data went down. According to him, “[No] a bear market has ever bottomed before a recession. So from that perspective, we don’t think October was the bottom.”

On the positive side, Emanuel foresees that the Fed’s anti-inflationary measures will take hold and reduce the rate of price growth to 3.1% by the end of the year, which will be positive for stocks. He believes that despite a likely “shallow and short” recession, the S&P will rise by 6.5% and reach 4150 points by the end of 2023.

With Emanuel’s outlook in mind, we wanted to take a closer look at the two stocks that received a storm of applause from Evercore, with the firm’s analysts predicting more than 100% upside potential for each. We used the TipRanks platform to find out what makes them work. Let’s take a closer look.

Fisker, Inc. (FSR)

Topping Evercore’s list is Fisker, the American electric car company founded by Henrik Fisker, who built his reputation designing luxury cars for BMW. Fisker began production of its first Fisker Ocean model last November and has confirmed plans to produce more than 42,000 vehicles this year. These products will go towards satisfying more than 63,000 of the company’s oceanfront bookings. In addition, last November Fisker unveiled a steerable prototype of its second PEAR car model. As of October 31 last year, the company has accepted 5,000 bookings on PEAR.

Although these developments – the start of production, high redundancy rates and the second prototype of the model – all bode well for the company, Fisker remains a speculative investment. The company is still at a preliminary revenue level and will remain so until it begins large-scale vehicle deliveries.

However, Fisker’s progress on these deliveries has been significant. The company has a detailed production plan for Ocean and is preparing assembly plants in Ohio, Georgia and India. Building up industrial assembly plants does not come cheap, but as of September 30, 2022, Fisker had $824.7 million in cash and liquid assets (as of the end of the latest period). This cash cushion compares to full-year 2022 non-GAAP operating expenses ranging from $435 million to $500 million.

Looking at Evercore stock, analyst Chris McNally sees FSR as an attractive risk reward. McNally rates the stock as “outperform” (i.e. “buy”) along with a target price of $15, implying about 112% annual upside potential. (To view McNally’s track record, Click here)

Maintaining his bullish stance, McNally writes: “Despite Fisker’s potential to meet short-term targets, by trading at a lower valuation (~6-7x 25 EPS), investors are still depreciating the business sharply. We see Catalysts start shipping ~ February and 23 results, which we think will beat consensus. With a 2023 ASP of ~$70k in priority higher trims, Magna is on track to produce ~40k-45k Ocean units (with room to grow to ~120k ’24). ), and demand will push reservations towards a YE target of 65K-75K, a 50% revenue upside potential.”

Overall, Fisker’s 7 recent analyst reviews include 4 buys and 3 holds, which translates into a “moderate buy” consensus rating. The shares are selling for $7.08, and their average target price of $13.17 implies an annual gain of 86%. (See FSR Stock Prediction at TipRanks)

Altus Power, Inc. (AMPS)

With Evercore’s second choice, Altus Power, we will shift our focus to the clean energy sector. Altus positions itself as a full-service solar company offering a wide range of solar energy solutions suitable for industrial, commercial and public market scales. Altus supplies solar power generation, energy storage and electric vehicle charging to make renewable energy affordable. Since its founding in 2009, Altus has generated more than 2.9 billion kWh of solar power, enough to power more than 400,000 homes for one full year.

Altus is always looking to expand its generating capacity and last month announced a $293 million deal to acquire 220 megawatts of solar assets, either newly developed or under construction, from True Green Capital Management. The agreement is expected to close during Q1 2023, bringing Altus’ total solar and storage assets to 690 MW.

The move comes just one month after the release of Q3 2022 numbers in November 2022, which showed a quarterly increase of 100 megawatts in the company’s power generation portfolio. Altus reported $30.4 million in revenue in the third quarter, a significant 51% year-over-year increase. The company posted a GAAP net loss of $96.6 million but still had over $290 million in unrestricted cash as of the end of the quarter.

Evercore analyst James West is impressed with Altus and writes, “AMPS has an existing positive EBITDA business supported by long-term contract earnings. The company also has the ability to raise rates on most of its contracts as utility rates continue to rise. Given its ownership model, it will continue to launch new products (storage, electric vehicle charging) to complement its core solar energy offerings.”

Looking ahead to the opportunities offered by the Altus business model, West sees reason for optimism. Analysts rate Altus stock as “good” (i.e. “buy”) along with a $15 target price, suggesting about 115% annual upside potential. (To see West’s track record, Click here)

With Altus, we get stocks that are rated “Strong Buy” based on analyst consensus based on unanimous 5 buy reviews. The current market price of the shares is $6.96 and the average target price is $12, which implies upside potential for this year by about 72%. (See AMPS Stock Prediction at TipRanks)

For good stock trading ideas at an attractive price, visit TipRanks Best Stocks to Buy, a tool that brings together all of TipRanks stock analytics.

Denial of responsibility: The opinions expressed in this article are solely those of selected analysts. The content is for informational purposes only. It is very important to conduct your own analysis before making any investment.

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