US mid-cap stocks are on pace to outperform their large-cap peers for the second year in a row. The S&P 400 is down 13% year-to-date, a margin of about 400 basis points. S&P 500.
Mid-Cap land has long been considered the ‘sweet spot’ for equity investors. The companies are well established in their respective markets, but often have more room for growth than mature large caps. With mega caps out of favor in 2022, investors are finding winners a little further down the capitalization spectrum.
Another explanation for income inequality is relative sector weights. Technology dominates the S&P 500 with a 26% weighting, double that of the S&P 400. The industrials sector accounts for the largest portion of the mid-cap index at 19%, but only 8% of the large-cap index. Tech is the worst performing team this year. The industry is well positioned and has largely outpaced the energy sector alone.
At the individual stock level, only one S&P 500 component has doubled year-to-date. Warren Buffett Choose Occidental Petroleum. A ditto for the S&P 400 was oil and gas refiner PBF Energy, which quadrupled before a sharp pullback.
Whether or not mid-caps will perform well again in 2023 is anyone’s guess. A better risk-reward trade-off is more tangible – smaller firms generally have higher earnings potential. Allocating more resources to mid-caps comes with more risk, but can help a portfolio recover faster.
Here are three mid-caps that Wall Street sees as two-packers over the next 12 months.
What is the outlook for Intellia Therapeutics?
Intellia Therapeutics, Inc. (NASDAQ: NTLA) Developing therapeutics based on widely adopted CRISPR-Cas9 Gene editing technology. It has several in vivo and ex vivo applications for the treatment of lung disease, liver disease, cancer and other indications. Intellia’s most promising candidate is NTLA-2001, which is being developed with Regeneron Pharmaceuticals as a treatment for ATTR amyloidosis.
With no commercialized products, Intellia’s revenues are low and its losses are steep — but Wall Street is anticipating an inflection point. The pipeline is progressing well, and an Investigational New Drug (IND) application is expected to be launched next year Clinical studies On the lung disease candidate. The potential for marketed products is at least a few years away, but clinical success could be a major catalyst.
Analysts are largely bullish on Intel’s move to a new 52-week low. A $100 average price target equates to 150% upside.
Will traders raise the elevator in 2023?
Lyft, Inc. (Nasdaq: LYFT) It continues to find support from the street, and that makes sense. The A ride sharing company Year-to-date has delivered 30% higher revenue and rebounded from steep headwinds to record six straight profitable quarters. Yet the stock is down more than 70% this year.
Despite the financial recovery, Lyft faces numerous challenges. Ridership is below pre-Covid levels and the impending economic downturn points to fewer nights and need for lifts in the city. The company laid off another 700 employees last month as it faces a challenging 2023.
However, the long-term outlook is positive, which is why sell-side analysts see Lyft trading at all-time lows as an opportunity. Price targets are all over the map but an average of $22 is a 100% return from here.
The prevailing thesis is that the current challenges will subside and lead to an early secular trend towards on-demand, cashless transport by car, scooter or bike. Volatile gas prices And expensive repairs and a desire for convenience are expected to shift consumers from car ownership to transportation-as-a-service (TaaS). In turn, a lot of money could shift from car dealers to ride-hailing apps. It’s a long road for Lyft, but growth investors may want to come along for the ride.
Is there good progress for Samsara stock?
Samsara Inc. (NYSE: IOT) The Internet-of-Things (IoT) company picked the wrong time to go public. It is the creator of Connected Operations Cloud, which enables businesses to gain actionable insights and improve operations based on IoT data. The Street is mostly bullish on the $13 stock, thinking it could return to mid-$20s in December 2021 IPO levels.
Samsara focuses on video-based security solutions for the transportation industry that detect driver cellphone use and seatbelt non-use. Together with telematics and AI-powered video search, its subscription-based products generate strong recurring revenue.
Due to its 2,828% three-year revenue growth, Deloitte recently named Samsara one of the fastest growing. Technology companies In North America. It was a buoyant and upbeat quarter that showed end-market demand remained firm despite macro weakness.
Not all enterprise SaaS companies have it this well, nor are they moving towards profitability like Samsara. Management forecasts top-line growth of 49% this year and a narrow net loss. If this under-the-radar IoT play can deliver such results in a weak economy, the future is certainly bright.
Before you consider Intellia Therapeutics, you need to ask this.
MarketBeat tracks Wall Street’s top-rated and best-performing research analysts and the stocks they recommend to clients on a daily basis. As MarketBeat identified Five stocks Top analysts are quietly whispering to their clients, buy now before the broader market catches up… and Intellia Therapeutics is off the list.
While Intellia Therapeutics currently has a “moderate buy” rating among analysts, top analysts believe these five stocks are great buys.