20 midcap stocks with 2024 upside ranging up to 62%, according to analysts
By Philip van Doorn
Healthcare names dominate the list of Wall Street's favorite medium-size companies
This is the third of a three-part series featuring lists of top stock picks among analysts working for brokerage firms. Part 1 screens large-cap stocks, led by Nvidia Corp. Part 2 screens small-cap stocks.
When investors think about whether to increase their exposure beyond the big companies that grab most of the headlines in the financial media, they are likely to look at small-cap stocks first. After all, the sky's the limit. Meanwhile, midcap companies can get lost in the shuffle.
But it is reasonable to consider medium-size companies that "have proven out their business model but have a lot of room to run," according to Josh West, who manages the highly rated Buffalo Mid Cap Fund BUFMX.
West recently discussed seven midcap tech stocks that he favors.
As discussed in Part 2 of this series, midcaps as a group are trading at relatively low price-to-earnings ratios when compared with the large-cap S&P 500 - screened in Part 1 - and a bit below their historical averages.
Index Return since end of 2021 Forward P/E Current P/E to 5-year average Current P/E to 10-year average Current P/E to 15-year average S&P Small Cap 600 -3% 14.3 98% 94% 98% S&P Mid Cap 400 1% 14.5 96% 94% 98% S&P 500 3% 19.6 102% 109% 121% Source: FactSet
To screen midcaps, we started with the S&P Mid Cap 400 Index MID and cut the list to 369 companies covered by at least five analysts polled by FactSet. Then we reduced the list to 83 companies with buy or equivalent ratings from at least 75% of the analysts.
Among those 83, here are the 20 with the most upside potential over the next year, indicated by consensus price targets:
Company Ticker Share buy ratings Dec. 22 price Consensus price target Implied upside potential Forward P/E Lantheus Holdings Inc. LNTH 91% $59.59 $96.64 62% 9.7 R1 RCM Inc. RCM 94% $10.64 $17.25 62% 33.7 Jazz Pharmaceuticals PLC JAZZ 78% $121.25 $190.38 57% 6.1 MP Materials Corp. Class A MP 92% $20.09 $30.00 49% 34.5 Iridium Communications Inc. IRDM 100% $40.66 $60.50 49% 135.0 Valaris Ltd. VAL 100% $68.41 $100.58 47% 17.0 Darling Ingredients Inc. DAR 81% $49.51 $71.00 43% 11.3 TKO Group Holdings Inc. Class A TKO 100% $78.84 $112.00 42% 25.3 Celsius Holdings Inc. CELH 81% $50.04 $70.85 42% 52.9 Perrigo Co. PLC PRGO 100% $31.70 $44.67 41% 10.5 Teradata Corp. TDC 75% $44.10 $62.09 41% 18.5 Frontier Communications Parent Inc. FYBR 82% $24.34 $34.00 40% N/A Civitas Resources Inc. CIVI 91% $69.69 $93.91 35% 4.8 HealthEquity Inc. HQY 100% $65.81 $88.33 34% 23.9 United Therapeutics Corp. UTHR 80% $218.93 $288.73 32% 10.0 Allegro MicroSystems Inc. ALGM 75% $30.90 $40.14 30% 22.9 Matador Resources Co. MTDR 88% $57.61 $74.60 29% 6.9 Essential Utilities Inc. WTRG 100% $37.14 $47.75 29% 18.7 Calix Inc. CALX 88% $42.76 $54.75 28% 26.0 Interactive Brokers Group Inc. Class A IBKR 80% $82.11 $104.44 27% 13.2 Source: FactSet
Click on the tickers for more about each company.
Click here for Tomi Kilgore's detailed guide to the wealth of information available for free on the MarketWatch quote page.
Don't miss: 13 stocks that are down for 2023 but may bounce back in 2024 or beyond
-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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12-30-23 0702ET
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