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JPMorgan Predicts Potential Returns for These 2 Stocks in 2023

by The Custom Boxes
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The past year has been a difficult one for investors, as the stock market saw its 7th worst annual performance since 1929.
However, analysts at JPMorgan believe that the bearish trend has created some opportunities for investors. They have identified two stocks that they believe are currently undervalued and have potential for returns in 2023.

Palomar Holdings Inc. (PLMR:NSD):

The first stock is Palomar Holdings, an insurance company that focuses on providing coverage for unexpected events such as earthquakes, floods, and hurricanes.
The company uses data analytics and a technology platform to offer its customers versatile products and tailored pricing plans. Despite a strong start to the year, Palomar’s Q3 earnings report did not meet investor expectations, causing the stock to fall 47% from its October high.
However, JPMorgan’s Jimmy Bullard believes that this selloff is excessive, citing improvements in business trends and measures the company is taking to offset the impact of higher reinsurance rates. He rates the stock as an overweight (i.e., buy) with a 12-month price target of $75, which represents an upside of 56%.

Analyst Ratings:

Evercore ISI downgrades with an in-line rating and $52 stock price target.
Jefferies Financial LLC also target down the stock price to $52.
Keefe Bruyette Woods Capital targets down the stock price to $55.
Analysts rate Palomar Holdings Inc. stock with a consensus “Strong Buy” rating and an average stock price target of $76.08 per share over the next 12-months.

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Company Profile:

Palomar Holdings, Inc., an insurance holding company, provides specialty property insurance to residential and commercial customers.
The company offers personal and commercial specialty property insurance products, including residential and commercial earthquake, commercial all risk, specialty homeowners, inland marine, Hawaii hurricane, and residential flood, as well as other products, such as assumed reinsurance, commercial flood, real estate error and omission, and real estate investor products.
It markets and distributes its products through retail agents, wholesale brokers, program administrators, and carrier partnerships. The company was formerly known as GC Palomar Holdings. Palomar Holdings, Inc. was incorporated in 2013 and is headquartered in La Jolla, California.

Transunion (TRU:NYE):

The second stock is TransUnion, a US credit reporting agency that is considered one of the top three credit agencies in the country.
The company’s Q3 earnings report also fell short of expectations, but analysts at JPMorgan believe that this underperformance is not a reflection of the company’s long-term prospects.
They see TransUnion as a solid player in a growing market and rate the stock as a Moderate Buy with a 12-month price target of $75.40, which represents an upside of 57%.

Analyst Ratings:

Wells Fargo upgraded the stock price target to $88 from $70 and rates it as “Overweight”.
BNP Paribas initiates coverage on the stock with a “Neutral” rating and $64.5 price target.
Morgan Stanley lowered the price target from $80 to $78 and rates the stock as “Overweight”.
Analysts rate Transunion with a consensus “Strong Buy” rating and an average stock price target of $83.05 per share over the next 12 months.

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Company Profile:

TransUnion provides risk and information solutions. The company operates in three segments: U.S. Markets, International, and Consumer Interactive. The company was formerly known as TransUnion Holding Company, Inc. and changed its name to TransUnion in March 2015. TransUnion was founded in 1968 and is headquartered in Chicago, Illinois.

In Conclusion:

Overall, while the past year has been challenging for investors, JPMorgan believes that there are still opportunities to be found in the stock market. These two stocks may be worth considering for those looking for potential returns in 2023.