Wall Street likes to peer into the fog of the future and guess where a stock is headed. While these stock price predictions are based on educated estimates, often based on information and models unavailable to regular investors, they are nonetheless guesses.
Analyst price targets are short-term in nature. They tend to look out for 12 months or so. Investors shouldn’t weigh too much on these opinions as stock prices can be volatile over such short periods. An investor should seek to own a stock for at least three to five years, preferably a decade or longer.
Still, when analysts peg high-growth stocks to double or more in a year, it is worth noting. After all, even if they are wrong by half, it could amount to some serious gains. But that also means if you have chosen a stock because you think it has long-term potential, I wouldn’t sell it just because it reached an analyst’s arbitrary price target. Letting your winners run is solid investment advice that has proven its worth over time.
Below are three high-growth stocks Morgan Stanley (NYSE:MS) analysts see growing by 100% over the next year. Let’s see if these are grounded expectations or just wishcasting.
Li Auto (LI)
Chinese electric vehicle manufacturer Li Auto (NASDAQ:LI) is the first high-growth stock that more than one analyst sees doubling in value. Morgan Stanley analyst Tim Hsiao has a market-high target price of $53 per share despite his lower outlook of $65 per share.
LI stock is down 47% in 2024 as the slowing EV market even hit China’s automakers. Yet June deliveries across the industry surprised the market with its strength. Second quarter numbers were much more robust than anticipated.
The EV maker delivered 47,774 vehicles in June, up 47% from last year and slightly ahead of expectations for 47,000. Li also reported selling 108,600 EVs in the second quarter, better than the midpoint of the range it provided in May of 105,000 to 110,000 vehicles. With Li expected to report its financials in late August, Hsiao said he cut his price target to reflect “Li Auto’s strategic product pipeline changes.”
That is based on Li’s decision to delay releasing a pure electric SUV this year. The automaker has pushed back the timeline to the first half of 2025.
Still, Hsiao believes the selloff in LI stock was overdone. So, although he lowered his price target, it still implies a 168% upside potential in the stock.
Silence Therapeutics (SLN)
British biotech Silence Therapeutics (NASDAQ:SLN) is the second high-growth stock with triple-digit percentage return potential. Morgan Stanley analyst Michael Ulz has an overweight rating on the stock and raised his price target last month from $45 per share to $49, implying a 129% upside. Yet that is somewhat below the consensus outlook on the stock, with a price target of $61.50 per share or 186% above current levels.
Silence wants to use precision-engineered medicines using RNA interference (RNAi). It is the body’s natural mechanism of “silencing” the expression of genes that cause disease. Its lead drug candidate is zerlasiran (SLN360), currently in Phase 2 clinical trials. Silence recently reported positive results from a 48-week study of 178 patients with elevated lipoprotein(a), which indicates a high risk of atherosclerotic cardiovascular disease. It said Zerlasiran was well tolerated and had no serious safety concerns.
Biotech’s stock has been up 23% this year but has tripled over the last 12 months. In February, it received a $10 million milestone payment from AstraZeneca (NYSE:AZN), which is collaborating on various cardiovascular, renal, and metabolic diseases. As part of the collaboration, it can pursue 10 targets. Silence is eligible for up to $140 million in development milestones and up to $250 million in commercialization milestones. It will also receive tiered royalties on net sales when they occur.
Viking Therapeutics (VKTX)
Another biotech with high-growth potential is Viking Therapeutics (NASDAQ:VKTX). It is making a name for itself in the obesity drug market, which was popularized by Ozempic and Wegovy from Novo Nordisk (NYSE:NVO) and Monjouro and Zepbound from Eli Lilly (NYSE:LLY).
Viking seeks to stake out a new path by making a therapy in pill form. Because the competition requires regular injections, pills are a less optimal treatment for diabetes and obesity. Weight loss in a pill is something of the Holy Grail in public acceptance, and Viking’s GLP-1 treat called VK2735 could open it to a massive opportunity.
Morgan Stanley’s Ulz also covers Viking, and he set a $105 per share price target for biotech. That suggests a 121% upside for VKTX stock.
Shares are down 47% from the highs they hit on early positive results from VK2735, but they remain 182% higher in 2024 and are more than 240% above where the stock stood a year ago.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
