UBS: As markets continue their upward trajectory, investor optimism remains high, bolstered by predictions of sustained growth. UBS, a global financial services company, is forecasting further gains, with chief US equity strategist Jonathan Golub adjusting his year-end S&P 500 targets.
This sentiment aligns with recent bullish predictions for a long-term market rally. Golub’s new projections point to a rise in S&P 500 targets to 5,850 by the end of 2024 and 6,400 by 2025, driven by expected growth in earnings per share (EPS) and improved financial conditions.
Amid these optimistic market conditions, UBS analysts have singled out two “Strong Buy” stocks poised for significant growth in the coming months. Both Allegro MicroSystems (ALGM) and Chord Energy (CHRD) have garnered attention for their strong performance and favorable outlooks.
Allegro MicroSystems: A Hidden Gem in Semiconductor Growth
Allegro MicroSystems, a semiconductor company specializing in integrated circuits (ICs), has seen a dip in its stock price due to recent slowdowns in the electric vehicle (EV) market. Despite these challenges, UBS analyst Timothy Arcuri remains bullish on the company, citing its insulated position in the automotive electrification space and its extensive client base, including over 50 automotive OEMs.
Allegro’s strong intellectual property portfolio, with over 650 US patents, and its market dominance in EV-related sensor technology, positions it well for future growth. Arcuri’s $30 price target suggests a 45% upside potential over the next year, reinforcing Allegro as a top pick for investors seeking to capitalize on the semiconductor recovery.
Chord Energy: Strong Performance Amid Oil and Gas Market Growth
Meanwhile, Chord Energy, an independent oil and gas operator in North Dakota and Montana, has impressed analysts with its solid fundamentals and growth prospects. The company’s recent acquisition of Enerplus has expanded its asset base, and its Q2 2024 earnings report exceeded revenue expectations, with oil production rising to 118.1 MBopd.
UBS analyst Josh Silverstein is optimistic about Chord’s potential, noting the company’s improving operational efficiency and the attractive valuation gap that exists in its stock. With a price target of $168, Silverstein sees a 32.5% upside in the next 12 months.
UBS’s Bullish Outlook for 2024 and Beyond
UBS’s bullish outlook on these two stocks comes amidst a broader market forecast that predicts a solid finish to 2024, bolstered by favorable economic indicators such as rising EPS and expectations for future rate cuts.
Investors are advised to keep a close eye on Allegro MicroSystems and Chord Energy as they continue to show resilience and growth potential in their respective sectors. With the market showing signs of strength and UBS’s guidance backing these recommendations, both stocks present attractive opportunities for investors looking to ride the next wave of market gains.
