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‘Stay long and strong’: Strategist expects S&P 500 to reach 5,750 by year’s end – here are two stocks tapping into that bullish sentiment

US stocks fell sharply yesterday, capping off Wall Street’s worst month of 2024. The downturn was fueled by better-than-expected labor data, raising investor expectations for the Federal Reserve’s upcoming interest rate decision.

Despite this setback, the S&P 500 can still post a gain of 5.5% this year. There’s even optimism from at least one strategist who thinks the index still has plenty of room to perform.

Jay Hatfield, CEO of Infrastructure Capital Advisors, believes the S&P will reach 5,750 by the end of this year, a potential gain of ~14% from current levels.

“We are optimistic despite the fact that our economy is strong, because Europe is very weak. And American investors have a very strong tendency to ignore the rest of the world, which makes a lot of sense when it comes to stocks, because you have NVIDIA. All the best companies are here. And everyone is looking to the US for equities,” Hatfield said.

Hatfield isn’t the only bull in town; All over Wall Street, experts select the stocks that are primed for future growth. We used the TipRanks database to identify two such picks, both Strong Buys, according to the analyst consensus. Let’s dive into the details.

Live Nation Entertainment (LYV)

We start in the entertainment industry, with Live Nation Entertainment. This company is a major player in the entertainment field and specializes in producing live events, especially concerts. The company is known for bringing live artists to stages around the world, playing every genre on every scale, from multi-day, multi-stage festivals to small local clubs.

The company has a market capitalization of over $20 billion, and some figures will show the size of Live Nation’s operations. The company produces approximately 44,000 concerts annually, including more than 100 festivals, in more than 45 countries. And – these events play to more than 121 million fans annually. It’s a huge base and the company sells more than 550 million tickets for its events.

Investors may be more interested in Live Nation’s financial performance. The company generated total revenue of $22.7 billion last year. Zooming in on the latest report, we see that Live Nation had Q4 23 revenue of $5.84 billion, up 36% year over year and more than $1 billion above analyst forecasts. Adjusted operating income increased 20% year over year to $116.9 million.

That’s the background. In the foreground we can look at the forecast for the upcoming Q1 24 earnings, scheduled for tomorrow (Thursday, May 2). Revenue is expected to be at or near $3.28 billion, which would represent 4.8% year-over-year growth.

In an interesting development, Live Nation is facing ongoing antitrust action from the US Department of Justice. The stock recently fell after a WSJ report revealed that the Justice Department is preparing to file an antitrust lawsuit against the company.

However, the recent share price drop could be a buying opportunity, at least as far as Deutsche Bank analyst Benjamin Soff is concerned. In support of his view, the analyst writes: “We believe the company will deliver consistent double-digit growth in adj. operating results in the coming years based on (1) strong secular fundamentals, including robust demand and increasing supply, combined with (2) a focus on developing specific value-added initiatives to drive revenue generation across the business to improve. In the meantime, (3) we believe that the most likely outcome of any potential regulatory investigation will be pro-consumer reforms to various business practices across the industry, which should not materially disrupt Live Nation’s business opportunities; and not a more drastic structural solution. In this context, we view the recent share price decline as a buying opportunity.”

For Soff, this amounts to a buy rating, and his $120 price target implies a one-year upside of 35% for the stock. (To view Soff’s track record, click here)

Deutsche Bank’s view isn’t an outlier: Live Nation’s fourteen recent stock reviews are all positive, giving the stock a unanimous Strong Buy consensus rating. The stock is trading at $88.91, and its average price of $121.07 suggests it will rise 36% in a year. (To see LYV stock forecast)

Janus International Group (JBI)

The second stock on our list, Janus International, deals with something so mundane that we don’t normally think about it: just doors. Janus works with commercial and industrial construction companies and contractors and provides solutions for doors and entrances. That sounds simple, but doors and entrances come in a wide range of types and models, and can incorporate advanced technology in both materials and electronics.

Janus’ product lines include steel roller doors, of the type commonly found in storage facilities, as well as smart entry systems, corridor systems and various doors and entrances for light industrial and commercial buildings. The company mainly focuses on business customers.

In addition to its doors and entrances, Janus stands out for its smart access systems, called Nokē, designed for the self-storage market. The smart access system includes a Bluetooth electronic lock, along with an operating system that allows full access to the user’s storage space from a connected smart device. For storage facilities, this means no longer having to worry about customers losing keys or gate codes. In addition, the system offers extra security through the use of motion sensors in each door.

In its latest earnings report, which covers the fourth quarter of ’23, Janus reported revenue of $263.7 million, down 5.7% from the year-ago quarter – and missing the forecast by more than $21 million . Ultimately, the company’s non-GAAP earnings per share of 24 cents per share was 2 cents below expectations, but also 2 cents higher year-over-year. The company will report first quarter 24 results on May 9.

Despite missing fourth-quarter earnings forecasts, Janus shares have caught the attention of Jefferies analyst Philip Ng, who outlines several reasons why the company is in a solid position to expand its business and in capture future profits. The five-star analyst writes of Janus: “We believe JBI is an undervalued small growth name and find the risk-reward attractive. With an organic growth profile of MSD and EBITDA margins of 27%, it compares favorably with its peers and transactions (8.7x 2024E EV/EBITDA) at a noticeable discount… JBI’s backlog remains solid, and with a storage occupancy rate ( 90%) above the mid-20th century. cycle (~85%), this stimulates demand for new capacity. Now that permitting and other construction delays during COVID are behind us, JBI has seen strong demand for new construction. As interest rates fall, this should support more new construction activity. Additionally, with 60% of self-storage facilities being over 20 years old, this should drive a solid pipeline of R3 projects.”

These comments support Ng’s buy rating on the stock, and his $20 price target shows his confidence in a 39% upside potential for the year ahead. (To view Ng’s track record, click here)

Ng’s view is consistent with other recent analyst ratings on the stock; all four submitted recommendations are positive, indicating a Strong Buy consensus view. The shares are currently trading at $14.41 and their average price target of $19.33 indicates room for a 34% upside over the next twelve months. (To see JBI stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important to do your own analysis before making an investment.