JP Morgan analysts say these three stocks are their top picks for 2025
JP Morgan analysts say these three stocks are their top picks for 2025
Anyone involved in the investment game will know that it's all about "picking stocks." Choosing the right stock to put your money behind is vital to ensure strong returns on investment. Therefore, when Wall Street professionals consider the name to be the "best pick", investors should pay attention.
Using the TipRanks platform, we searched for details of three stocks that recently received a "Top Pick" rating from analysts at banking giant JP Morgan.
So, let's dive into the details and find out what makes it so. Using a combination of market data, company reports, and analyst commentary, we can get an idea of what makes these stocks attractive choices for 2025.
Zoetis Inc. (ZTS)
The first JPM selection we're looking for is a biopharmaceutical company – but with a twist. Zoetis specializes in medicines and vaccines for veterinary purposes. We don't think about it much, just assuming there is a lot of overlap between human and veterinary drugs, but there are significant differences in active and inactive ingredients, dosages, and even delivery mechanisms. Veterinary medicine can interfere with human treatments, but it is not always so, and many of its treatments and medicines are species-specific. This is the world in which Zoetis operates.
Veterinary care, for pets and livestock, is a huge business, with implications for some of the most personal aspects of our lives, from the animals we take home to our own food supplies. Zoetis regularly generates revenues approaching $2 billion each quarter; the reported fourth quarter, the fourth quarter of year 22, showed revenue of $2 billion, adjusted net income of $539 million, or adjusted diluted earnings per share. Looking ahead, the company expects 2025 revenue to be between $8.575 billion and $8.725 billion, higher than Street estimates of $8.55 billion.
At the same time, Zoetis has maintained its small but very reliable dividend payments. The payment, of 0.375 cents per ordinary share, is converted annually to $1.5 and gives a 1% return. The company has maintained reliable payments for more than a decade now.
Against this backdrop, JPMorgan analyst Chris Schutt offers a logical explanation for retaining Zoetis as the top pick: "We see ZTS in a good position with an innovative and premium portfolio (derm, parasiticides, pain and diagnostics) that should translate into further upwards of numbers over time. And while the company faced supply issues in 2024, these issues appear to have been largely addressed with little or no impact expected on 2025 results... We see a very attractive stock setup in 2025. "
Seeing a healthy current position, and room for future expansion, Schott valued this stock as overweight (i.e., buy), and set its target price at $225 to indicate his belief that stocks are rising 31% for one year. (To see the Shot log,Click here)
Overall, this veterinary medical company received a strong buying rating from the consensus of analysts, based on 4 recent reviews that include 3 buys and 1 contract. The stock is selling for USD$171.64, and the average price target of USD$202.50 indicates an 18% gain by the end of this year. (seeZTS) Stock Forecast
Juniper Networks (JNP)
We will now switch gears and move into the technology sector, where Juniper Networks specializes in the development and commercialization of routers, switches, network management software, security products, software-defined networking technology – in short, all the things that need to be assembled and maintained by networking and cybersecurity solutions.
Networking has become an essential business in our digital world, and Juniper has consistently generated high revenues and profits from it. In 2022, the company reported $5.3 billion in total revenue, up from $4.73 billion a year earlier, for a 12% annual gain.
Preliminary data for the fourth quarter showed an 11% year-on-year rise in revenue, to $1.448 billion. GAAP's net income reached $180 million, or 55 cents per share, up 36% year-on-year, and according to non-GAAP metrics, income of $213 million (65 cents per diluted share) was up 16% year-on-year. The company has huge pockets, although cash reserves are lower than in 2021; Juniper ended 2022 with $1.23 billion in cash and liquid assets, compared to $1.69 billion at the end of 2021. Looking ahead, Juniper was guided by a 15% year-over-year gain for the first quarter of 23, reaching nearly $1.34 billion.
Notably, return-minded investors have authorized a 5% increase in joint dividends, starting with the March 22 payment. This brings the dividend to 22 cents per ordinary share, or 88 cents per year, for a yield of 2.77%.
Covering Juniper for JPMorgan, 5-star analyst Samik Chatterjee wrote, "We see recent earnings print more than confirms the rationale for Juniper being our top pick for 2023, driven by the company's flexible revenue/earnings, which we believe is supported by a large group sharing earning opportunities in Enterprise, strong accumulation, and vertical customer diversification."
Chatterjee supports a "chance to earn engagement" with an overweight rating (i.e. buy) and a $42 price target, which means a one-year rise of almost 33%. (To see a track record at Chatterjee,Click here)
Overall, there have been 11 analyst reviews on Juniper in recent weeks, broken down into 5 buys, 4 bookings, and 2 sells, for an average buy consensus rating. The shares are priced at $31.65, and the average target of $36.09 indicates a space of approximately 14% over the next 12 months. (seeJuniper stock forecast)
T-Mobile US (TMUS)
Last up is a company that probably doesn't need much introduction. T-Mobile is one of the largest wireless service providers in the United States, and one of the leaders in expanding 5G network coverage across the country. T-Mobile's 5G network covers more than 325 million people in North America, mostly in the United States. The company boasts about 2.65 million high-speed internet customers as of the fourth quarter of 2022, an increase of 25% from the third quarter – and up from just 646,000 customers at the end of 2021.
T-Mobile recorded strong subscriber gains in its report for the fourth quarter of 22, adding 1.8 million postpaid net customers and 927,000 postpaid phone customers in the first quarter. High-speed internet customer extensions have reached 524,000. Overall, the company posted fourth-quarter profit of $20.27 billion, down 2.5% year-over-year, and $390 million below consensus estimates. However, GAAP EPS jumped 247% year-on-year to $1.18, beating Street estimates of $1.07.
Cash generation was also striking. T-Mobile saw a jump in free annual cash flow of more than 35% year-on-year, from $5.65 billion in 2021 to $7.66 billion in 2022. It stood at $2.18 billion in conditioning from the fourth quarter of 22 an increase of more than 96% year-over-year.
These are strong numbers, according to JPMorgan analyst Phillip Cusick, who wrote: "T-Mobile is our top pick for 2023 across our coverage as we see significant synergies and operational efficiencies over the next several years leading to strong EBITDA growth, amortization and cash flow growth."
The company's cash flow growth is likely to support Cusick's Overweight rating on stocks, and its $200 target price proposes a 35% rise over the next year. (To see the Cusick log,Click h e re)
Overall, Wall Street was generally impressed with T-Mobile's performance, and this shows in analysts' ratings. Of the 16 on file, 14 should be bought against holding only 2, to get a strong buying consensus rating. The average price target for the stock of $179.92 indicates a rise of almost 22% from the trading price of $147.87. (seeT-Mobile Stock Forecast
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Disclaimer: The views expressed in this article are only those of discerning analysts. The content is intended for informational purposes only. It is very important to conduct your own analysis before making any investment.