Here are 7 beaten-up global stocks that analysts expect to double
While stock markets worldwide have rallied this year on fading fears of a global recession, a number of stocks have been left behind. For some investors, these beaten-down equities could present an opportunity. CNBC Pro screened for stocks in the FTSE Developed Markets index — made up of about 4,000 large and mid-cap stocks — that have lost value this year, but are expected to rebound. All the stocks in the below table are expected to rise by more than 100% over the next 12 months, according to FactSet’s consensus price targets of at least five analysts issued within the past 45 days. Capita Shares of Capita , a business process outsourcing company, have fallen by nearly a fifth this year after it disclosed expenses incurred from a cyber data breach, repayment of Covid-19 pandemic furlough-related income, and increase in capital expenditure costs. However, the London-listed company’s stock is expected to rise by 143% over the next 12 months, according to the consensus price target of six analysts. “Lots of moving parts still and [free cash flow] remains weak. However, there are some encouraging signs re the pipeline, staff retention and [Net Promoter Score] whilst the group is also targetting a further £40m of cost savings by end 2024,” said RBC Capital Markets analyst Andrew Brooke in a bullish note to clients on August 4. Brooke expects the outperform-rated shares to rise by more than 150% to 50p (£0.50, or $0.64) over the next 12 months. U.K.-listed shares are typically priced in pennies, not pounds. CPI-GB 1Y line Vanquis Banking London-listed Vanquis has lost more than 40% of its value this year. Shares of the sub-prime lender fell by nearly a third after the company reported a 90% fall in earnings per share for the first half compared to the year before, despite a 32% rise in revenue. The 140-year-old firm, formerly known as Provident Financial, said it expected loan losses to improve in the second half relative to its first-half performance, assuming no further deterioration in the macroeconomic environment. Vanquis’ stock went another leg lower after it announced the departure of its CFO earlier this month. However, the median average of analyst price targets points to an upside potential of 148% over the next 12 months. VANQ-GB YTD line Helios Towers Shares of Helios Towers have lost nearly a quarter of their value this year over worries about its mounting debt pile. The London-listed firm builds and operates telecommunications towers and other passive network infrastructure across Africa and the Middle East. Helios has rapidly expanded the number of cell sites it operates over the past two years alongside an increase in revenue per site. But that growth has come with net debt rising by three quarters over the same period, according to the company. However, investment banks expect the stock to more than double from its current level and suggest the loans are manageable. “After 2 years of expansion, Helios is evidently now consolidating its position and yielding the benefits of its scale and commercial model,” said Jefferies analyst Giles Thorne in a note to clients on May 18. “We expect recurring leveraged free cash flow to increase by ~60% between 2022 and 2024 as Helios integrates newly acquired assets, expands its portfolio by delivering [build-to-suit] projects, and increases lease-up rates.” Thorne revised his price target to £1.75 on August 3, which indicates a 115% upside potential from current levels. HTWS-GB 1Y line
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