Will they call it Wild Wednesday? Yesterday was a remarkable day on Wall Street – and one for the record books. The S&P 500 skyrocketed 9.5% in a powerful reaction to Trump’s announcement of a 90-day halt on some of his ‘reciprocal’ tariffs.
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The S&P’s move was so strong, it would be considered a solid year under normal circumstances. The single-day leap ranks as the third-largest since World War II for the market benchmark, underscoring just how much Wall Street had been craving a break in the trade tensions. Earlier in the day, markets had been sinking again on fears that Trump’s trade war might tip the global economy into recession.
So, what happens next? Frankly, after the crazy recent action, no one really knows. In the meantime, the analysts at J.P. Morgan are going about their business and are recommending that investors start loading up on two stocks in particular.
We’ve opened up the TipRanks database, to get a look at the JPM picks and to get a feel for the broader market view on both. Each is Buy-rated, and each shows a double-digit upside potential. Here are their details, and the JPM comments on both.
Levi Strauss & Company(LEVI)
The first JPM pick we’ll look at here is Levi Strauss, the well-known global clothing brand whose iconic Levi’s jeans are always in style. The company got its start in California, in 1853, and to this day keeps its headquarters in San Francisco. The company started manufacturing denim jeans, as work clothes, in the 1870s, and despite the vagaries of fashion trends, has been a successful clothier ever since.
Today, the lineup of Levi’s apparel includes a wide range of denim jeans and jackets, other casual wear, khakis, and accessories for men, women, and kids. Levi Strauss products are found in over 110 countries, and are sold through a network of outlets. These include chain retailers, department stores and online sites, and the company complements this network with its own array of some 3,000 branded stores and shop-in-shops.
Levi Strauss sells its clothing lines under several brand names, including Levi’s, Levi Strauss & Co., Denizen, and Beyond Yoga. The Dockers brand, which was long associated with Levi Strauss, was reclassified as ‘discontinued operations’ during the recently concluded 1Q25.
In the financial results for 1Q25, Levi Strauss reported a total of $1.53 billion in revenues, a figure that accounted for the reclassification of the Dockers brand. This top line was up 3.4% year-over-year although it did miss the estimates by $10 million. At the bottom line, Levi Strauss realized a non-GAAP EPS of 38 cents, beating the forecast by 10 cents and growing 52% year-over-year.
Of interest to return-minded investors, the Levi Strauss company returned approximately $81 million to shareholders during Q1, through both dividends ($51 million) and share repurchases ($30 million). The 1Q25 capital return represented a 12% increase year-over-year. Looking ahead, the company has declared a 13-cent common share dividend for payment on May 9. The annualized rate of 52 cents per common share gives a forward yield of 3.8%.
Despite the recent bounce, LEVI shares are still down 24% over the past 12 months but the fall in share value forms the starting point for Matthew Boss’s write-up of the stock. The JPM analyst goes on to note several reasons why LEVI shares should start gaining over the coming months, writing, “We are upgrading LEVI to Overweight with the macro-driven pullback over the trailing 9 months providing an entry point to own a multi-year mid-teens(+) total return profile. More specifically, Levi’s total-addressable-market expansion as a denim lifestyle apparel brand under CEO Gass has translated to (i) accelerated global demand momentum for 4 straight quarters and new customer acquisition notably at the younger 18-30 year old customer demographic transacting at higher AURs w/ greater purchase frequency, (ii) gross margin expansion of +370bps TTM on structural mix tailwinds, product cost savings, and improved full-price selling, and (iii) a structurally improved profitability profile relative to 2019 following the exit of the lower-margin Denizen, European footwear, and Dockers segments providing amplified pricing power, w/ the combination of supply chain diversification and de-risked China profile bolstering LEVI’s ability to mitigate tariffs.”
That Overweight (i.e., Buy) rating is complemented by a $17 price target that implies a 17% share appreciation over the coming year. (To watch Boss’s track record, click here)
There are 12 recent analyst reviews on record for LEVI, and the 7 to 5 breakdown, favoring Buy over Hold, gives the stock its Moderate Buy consensus rating. The shares are currently trading for $14.93 and the $18.08 average price target suggests a one-year upside potential of 21%. (See LEVI stock forecast)
Nu Holdings(NU)
For the second stock on our list, we’ll shift to the world of fintech, where Nu Holdings, or Nubank, is an online digital bank serving the Brazilian market, along with Mexico and Colombia. The company is based in Sao Paulo, and offers its customers a wide range of services, including digital bank accounts, credit cards, personal loans, and cashback rewards. Additionally, the company also offers its customers access to a crypto investment platform.
Nu Holdings was founded in 2011, and since then it has built itself into a $52 billion player in the world’s digital banking industry. The company serves its customers in a purely digital format, allowing access through a mobile app. The company boasts that more than half of Brazilian adults are customers, and that its total customer count exceeds 114 million.
That customer count reflects new customers that the company brought in last year. The company’s quarterly results for 4Q24 show that 4.5 million new customers joined Nubank during the quarter, capping a year that saw solid customer gains of 20.4 million. This represented a 22% year-over-year increase in the customer count during 2024, and makes Nubank one of the world’s fastest growing digital financial services companies.
Looking at financial results, we find that Nu Holdings recorded revenue of $2.99 billion during 4Q24, a gain of 24.6% year-over-year – although it missed the forecast by $180 million. The company’s bottom line, reported as the quarterly adjusted net income, came to $610.1 million, up from $395.8 million in the prior-year period. Shares in NU are down 7.6% after 12 months of volatile trading. For the year-to-date, the stock has posted a modest gain of 5.4%.
This fast-growing fintech has caught the attention of JPM’s Yuri Fernandes, who explains why the shares should attract investors: “Nubank has many positive attributes: (i) execution and good management – it delivered 5x above our IPO expectation for 2024 earnings; (ii) competitive cost advantages in retail banking in Brazil; and (iii) a huge addressable market to explore… Even in our more conservative estimates we see Nu growing earnings >30% in next 3 years, something hard to find. Assuming Brazil is a relative winner in the global trade war, we believe Nubank should also be a relative winner for global/growth investors. A weaker USD and potentially lower rates globally may benefit the company.”
Quantifying this stance, the analyst has upgraded his rating on NU stock from Neutral to Overweight (Buy), and his price target of $13 points toward an upside of 19% on the one-year horizon. (To watch Fernandes’s track record, click here)
The six recent analyst reviews here include 4 Buys along with 1 Hold and 1 Sell, for a Moderate Buy consensus rating. The stock’s $10.92 selling price and $14.20 average target price together suggest that a 30% gain lies in store for the next 12 months. (See NU stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
