These winning stocks from 2022 can continue to soar in 2023, analysts say

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Seesaw trading and mixed messages – that’s been the market trend over the past few weeks, and last week was no exception. The week started with four days of straight losses, but ended with a gaining Friday session after a surprisingly strong jobs report. Even so, the S&P 500 was down 3.35% for the week, snapping a four-week rally. Overall, the index is down 21% for the year, in bearish territory, and the losses on the tech-heavy NASDAQ are even larger, at 33%.

Cross-currents make it difficult to put together a winning portfolio, but a tough-minded, risk-conscious investor can chart a course using proven market winners. We’re talking about stocks coming out of 2022 ahead of the game, with record-breaking gains in stock appreciation — in the range of 80% to 180% year-to-date — and positive analyst reviews for more. earnings in 2023 .

Using the TipRanks database, we researched the details of three such stocks and found that the Street pros see substantial upside potential, starting at 70% and rising from there. Let’s take a closer look.

NextTier (NEX) Oilfield Solutions

We’ll start with the oil sector and look at NexTier Oilfield Solutions, an oil services company, whose shares have gained 188% this year. Oil service companies enable giant hydrocarbon production companies to extract oil from the ground. Production companies typically focus on exploring energy reserves, locating likely well sites, and purchasing land and drilling rights; service companies specialize in engineering and technical skills in the geology, drilling, fluid and pumping technologies that extract oil and gas from the ground. NextTier operates in this niche.

In addition to these wellhead operational activities, NexTier also offers oil producers a range of complementary services, including digital equipment control, logistics and system monitoring.

This is big business, and in late 2021 the combination of rising oil prices and the post-COVID return of a more normal economic environment pushed NexTier into the black. The company has recorded quarterly net profits since 4Q21; in the most recently reported quarter, 3Q22, the company posted adjusted net income of $129.5 million, or 52 cents per diluted share. Compared to diluted EPS of $98.5 million and 39 cents in 2Q22, this is a strong turnaround from the net loss of $24.3 million recorded in 3Q21. Topping the list, NexTier reported revenue of $896 million, up an impressive 128% year-over-year.

On the balance sheet, NexTier is in a good position, with total liquid assets of $621.7 million, including $250.2 million in cash. The company recorded $163.8 million in net operating cash in the third quarter of this year, a total that included $132.6 million in free cash flow. NexTier has no term loans maturing before 2025.

NexTier management felt confident enough in these results to announce in the quarterly report the launch of a $250 million share buyback program to return capital to investors.

Covering Evercore ISI stock, analyst James West sees NexTier poised to continue posting gains – and continue to deliver those gains to shareholders.

“The combination of growing fracking demand, NEX’s strategic repositioning and counter-cyclical investments has improved its earnings capability and cash flow generation. The company continues to set new quarterly records for revenue and growth. ‘EBITDA.NEX remains focused on resuming all Covid-related price concessions and others pushing its vertical integration solutions.The fracking market is expected to remain supportive given a nearly depleted market operating at elevated levels of service intensity and a tight supply chain environment,” West said.

“NEX remains committed to capital discipline, maximizing shareholder returns and returning a significant portion of free cash flow to shareholders,” the analyst added.

Based on the above, West thinks this is a title worth keeping. The analyst rates NEX shares as an outperformer (i.e. the buy), and his price target of $18 suggests solid upside potential of around 76%. (To see West’s track record, Click here)

Overall, this oil company has garnered 6 recent reviews from Wall Street analysts, and these include 5 buy to 1 hold, for a strong buy consensus rating. The stock is selling at $10.21 and has an average price target of $15.83, indicating potential for 55% stock gains over the coming year. (See NEX stock forecast on TipRanks)

Verona Pharma (ARNV)

We will now step up a gear and move into the biopharmaceutical sector. Verona Pharma, whose shares have risen 80% since the start of the year, is working to develop and commercialize its drug candidate, ensifentrine, for the treatment of various respiratory disorders. The company has a series of clinical trials underway, testing ensifentrine as a treatment for asthma, cystic fibrosis (CF) and chronic obstructive pulmonary disease (COPD). With the exception of asthma, which is long-lasting and chronic, these are terminal conditions with no effective treatments; ensifentrine studies have moved into phases 2 and 3.

The most advanced of these studies is the Phase 3 ENHANCE-2 trial of ensifentrine as a treatment for COPD. Verona last month announced that, in the study, the drug reduced exacerbation rates – the severity and progression of the disease – by an average of 42% across all study subgroups. Ensifentrine is administered via a nebulizer in this trial, and these results will be included in the company’s new drug application to the FDA, currently scheduled for 1H23.

Also of note for investors, Verona is making progress on the ENHANCE-1 trial of the ensifentrine nebulizer as a maintenance treatment for COPD, and expects to complete the trial before the end of this year. The company completed enrollment of more than 800 patients last June.

On other tests, Verona has ongoing Phase 2 studies of ensifentrine as a dry powder inhaler/metered-dose inhaler for the treatment of COPD, asthma and cystic fibrosis.

Among the bulls is Wedbush analyst Andreas Argyrides, who has an optimistic view of Verona. He writes: “With its novel mechanism of action as a PDE3/4 inhibitor, ensifentrine is poised to usher in the next generation of dual-effect bronchodilator and anti-inflammatory inhaled therapies. We view Verona’s stock as an opportunity to invest in a new class of inhaled treatment not only for COPD, but also for cystic fibrosis and asthma.

Argyrides does not just write optimistic commentaries on Verona; he backs it with an outperform (i.e. buy) rating and a price target of $27 that suggests solid upside potential of 122% year over year. (To see the Argyrides list, Click here)

Overall, this emerging biotech company has caught the eye of 5 Wall Street analysts and their reviews are all positive, giving VRNA shares a consensus rating of Strong Buy. The stock is selling for $12.13 and its mid-price target of $27 matches Wedbush’s view, for upside potential of 122% over the coming year. (See VRNA’s stock forecast on TipRanks)

Lantheus Enterprises (LNT)

The final 2022 winner we will be looking at is Lantheus, a biopharmaceutical company that develops and commercializes a series of products in the imaging, diagnosis and treatment of various oncology and cardiac conditions. Additionally, the company maintains an active research pipeline, with new products in preclinical, early clinical and late clinical stages.

Lantheus’ lead product is Pylarify, a radiopharmaceutical treatment for prostate cancer. According to the company’s recently released 3Q22 financial results, Pylarify’s sales were $143.75 million, well over half of total quarterly revenue. The company’s other major revenue generator was Definity, an injectable ultrasound enhancement used in cardiovascular echocardiography. Definity sales were $60.74 million in the third quarter, up 5.4% from the year-ago quarter.

Overall, Lantheus recorded third quarter revenue of $239.29 million, up 134% from the third quarter of 2021. For the nine months ending September 30, 2022, revenue of the company hit $671.89 million, a 127% year-over-year gain.

On the earnings side, Lantheus posted adjusted diluted net earnings of 99 cents per share. That was up from just 8 cents reported a year ago. Lantheus had $93.6 million in cash from operations in the third quarter, including $87.5 million in free cash flow.

Given these results, it is not surprising that the stock has attracted investors. Lantheus shares are up 110% this year. But would you believe that it could still increase by 80%?

Roanna Ruiz of SVB Securities does. The analyst notes that LNTH shares an outperformance (i.e. buy), as well as a price target of $110. (To see Ruiz’s track record, Click here)

Considering the profitable product mix and revenue growth as key points for this company, Ruiz says, “We reiterate our view that Lantheus could sustain a revision of around 45% 2020-23E. CAGR, as it leverages its diverse portfolio of diagnostic image enhancement solutions, all of which cover unique and significant market opportunities in cardio/oncology. After a 3rd consecutive quarter and a new competitor in the market, investors continue to scrutinize Pylarify’s growth trajectory through 2023, and the good news is that management remains confident in its ability to maintain a leadership position with Pylarify. in prostate cancer imaging. space.”

Overall, this profitable biotech company has outperformed the market and also garnered 4 recent reviews from analysts. All agree that the stock is a buy – for a strong buy consensus rating. The average price target of $105.25 suggests an upside of around 74% from the current trading price of $60.60. (See Lantheus stock forecast on TipRanks)

To find great stock trading ideas at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ stock information.

Disclaimer: The views expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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