Recently, the market has sent mixed signals. As can be seen from the chartNASDAQThe climbing rate of the index has slowed recently, although it remains at an all-time high. At the same time, the S & P 500 holds just over 3200 points, bringing the gap between the index and its all-time high to less than 5 per cent.

At the same time, uncertainty rises. There is a "second wave" of the coronavirus, which once again triggered a government shutdown order, but with the exception of California, the scope of the shutdown is not as large as it was this spring. Riots continue in major urban centres, and political farce continues ahead of the quadrennial elections.

Investment bankJPMorgan Chase & CoMarko Kolanovic, a strategist at JPMorgan, looks at the overall situation from a broader perspective. Kolanovich pointed out that gross domestic product (GDP) shrank sharply in the second quarter, and the earnings situation in this quarter will be very grim. However, he said: "investors are likely to focus mainly on the overall weak performance in the second quarter and more on earnings guidance and comments on quarterly trends."

Kolanovic talked about the core of ambivalence in the second quarter: "as expected, US GDP contracted in the second quarter due to the popularity of covid19, and market watchers expect total earnings to fall by 45% compared with the same period last year, the worst performance since the 2008 financial crisis. But. When the coronavirus finally fades, the economy is expected to rebound sharply in the third quarter. "

With this in mind, we used TipRanks's database to conduct a more detailed study of the three stocks just approved by JPMorgan Chase & Co. In addition, in addition to getting a higher rating, the company expects the share prices of both companies to rise by at least 30 per cent in the coming year.

AutoNation (AN)

The one who ranks first isAutoNationA national retailer of new cars, used cars, parts and services. The company, which has more than 360 brick-and-mortar stores and an important online business, generated $21 billion in revenue last year.

With the implementation of the social blockade, car retailers are likely to run into trouble in the first quarter of fiscal 2020. However, AutoNation benefits from its online sales-customers can order their cars and pick them up only in brick-and-mortar stores. This is a sales model that minimizes social contact and is perfect during the COVID-19 crisis. The company reported strong profits in the first and second quarters, beating expectations in both quarters. Earnings per share rose continuously, from 91 cents in the first quarter to $1.41 in the second quarter. Revenue in the second quarter was $4.5 billion.

JPMorgan Chase & Co's Rajat Gupta was impressed by AutoNation's performance in the first half of the year and upgraded the stock. Gupta wrote, "brand-centric Automotive Retail spans multiple automotive areas through a coherent experience, including franchise core locations, exclusive use of retail dealerships, branded parts and accessories, and digital channels, as well as indirectly through auctions." We also see that recent deleveraging and improved implementation have been positive. "

In addition to upgrading a-share to buy, Mr Gupta has a target price of $70, suggesting the stock will rise another 30 per cent.

Overall, AutoNation has a moderate buy rating, with an eight-digit rating, including three buy, four hold and one sell. The stock is currently selling at $54.15, with an average target price of $58.71, showing 8% room for modest growth.

Marathon Oil Corporation (MRO)

Next comes another JPM upgrade. It has been independent since 2011. MRO is responsible for exploration and production, mainly in Eagle Ford, Texas, Permian, New Mexico, and Bakken, North Dakota. These are some of the richest oil fields in North America and have made the US a net exporter of petroleum products over the past decade.

The Corona crisis has dealt a heavy blow to the oil industry, and like its peers, MRO has felt the pain. Factory closures and an economic slowdown have reduced demand, creating a glut. The negative, even temporary, fall in WTI (the benchmark price of US crude oil) in April is a heavy shock to the oil industry, where oil prices have barely recovered. MRO's share price has more than halved from its peak in 2020. As part of its efforts to preserve capital, the company suspended dividend payments of 3.5 per cent in the first quarter.

But not all is bad luck and darkness. Despite negative earnings, MRO reported better-than-expected first-quarter earnings. Revenue was $1.23 billion, up from $1.2 billion a year earlier. MRO reports second-quarter results in August; we will have to wait until then to see if the company's efforts to improve capital and liquidity succeed.

Arun Jayaram, an analyst at JPM, upgraded the stock to buy from neutral. "We think the bearishness on the stock (downside risks to oil production and insufficient inventory depth) has been reflected in the stock," he said. We expect MRO to reiterate its 2020 oil production forecast of 1.87 million b / d (a decrease of 1.9 million b / d) and capital expenditure of less than $1.3 billion. "

Based on this outlook, Jayaram has set a target price of $8, which means there is room for strong growth of 42 per cent in the coming year.

Overall, however, Wall Street is not optimistic. Analysts have a rating of 1 buy, 10 hold and 3 sell. However, the average target price of the stock is $6.81, 20% higher than the current $5.63.

Apache (APA)

The last one is Apache, another oil and gas exploration company. The company was founded in Oklahoma in the 1950s and currently operates in Texas Permian basins, Gulf Coast and offshore areas of the Gulf of Mexico. Internationally, Apache operates in the deserts of western Egypt and the North Sea off the coast of Scotland. In 2019, Apache had revenue of $6.3 billion.

However, the company was hit hard in the first quarter, with quarterly revenue falling 21 per cent year-on-year to $1.28 billion. Earnings per share fell to a net loss of 13 cents. Looking ahead to the second quarter, the company expects a net loss of 97 cents a share.

An important factor for the oil industry is the Democratic Party's hostility to oil and gas exploration. Investors must take into account that the Democrats are committed to a green economy and that Joe Biden took the lead in the polls in November.

JPM's Arun Jayaram pointed this out, writing, "We believe APA will benefit if the federal government suspends mining of APA in the North Sea and Egypt." The underestimated side of the story is the company's ability to create bit value in Egypt after modern and old-fashioned 3D earthquakes in the new license area. "

Mr Jayaram upgraded Apache to a buy, with a target price of $18 indicating investor confidence that the stock would rise 32 per cent in the coming year.

Overall, Wall Street is not ready to give up.Oil exploration companyA cautious attitude. Apache's consensus rating comes from 18 reviews, of which five are buy, 12 are hold and one is sell. The average target price of the stock is $15.03, which means there is 10% upside potential from the current $13.65 share price.

The writer: Michael Marcus, American Stock Research (meigushe)