The major indexes are in freefall ahead of the open on Thursday, as the markets appear to be digesting the impact of what Donald Trump has declared “Liberation Day” for the US.
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After imposing a 10 percent tax on all imported goods along with additional “reciprocal” tariffs on certain major trading partners amid an intensifying trade war, concerns are growing over its potential economic repercussions.
However, according to the investment office at UBS, it’s not all necessarily doom and gloom. The markets might be voting with a thumbs down to the most serious instalment to-date in Trump’s tariff crusade, but a recent note by the UBS investment team lays out reasons to keep a positive stance.
“Our economic forecasts do not call for a recession in the US,” says the note. “In our base case, a wide range of selective tariffs and counteractions are likely to lead to slower economic growth compared to last year, but they should not prevent the US economy from expanding by around 2%—its historical trend rate—this year. In addition, we expect the Federal Reserve to continue easing policy, with its Summary of Economic Projections last week indicating 50 basis points of interest rate cuts by the end of this year… We acknowledge that policy-driven uncertainty could pose further risks to the stock markets, and believe portfolio diversification and hedging strategies remain key. But we continue to expect the S&P 500 to end the year higher, and recommend phasing in and tactically buying the dip in US equities.”
In this situation, UBS suggests that investors go bargain hunting sooner rather than later. The bank’s analysts are running with that idea, having noted two stocks that have been on the backfoot recently but are poised for a rebound in today’s conditions.
Does the rest of the Street agree with the UBS view? This we can find out with some assistance from the TipRanks database. Let’s give these names a closer look.
Perimeter Solutions (PRM)
First on our list is Perimeter Solutions, a Missouri-based company that focuses on fire safety and prevention. Specifically, the company is a global producer of high-quality firefighting products and lubricant additives. Perimeter Solutions is proud of its reputation for quality, noting that in the firefighting industry there is no room for error – these are products that save lives, and so must work correctly the first time, every time.
Perimeter Solutions operates two main business segments, Fire Safety and Specialty Products. In the Fire Safety segment, this company is known for offering full-service solutions, including products, equipment, and personnel – and the logistic chain to support them. Perimeter Solutions markets its firefighting chemicals around the world, and its product list includes fire retardants and fire suppression foam applications. The company is well-known as an important supplier of firefighting products and services for the forestry industry, and can count such major names as the USDA Forest Service and CalFire among its customers. Brand names in the Perimeter Solutions product line include the Phos-Chek and Fire-Trol retardants, foams, and gels; the Auxquimia firefighting foams, and the fluorine-free Solberg foam products.
On the Specialty Product side, Perimeter Solutions is the only global-scale producer of phosphorus pentasulfide (P2S5) and is also known for producing the raw materials needed in anti-wear additives. The company’s P2S5 product is in high demand by manufacturers of engine oil additives around the world.
All of this is big business, and Perimeter Solutions generated $561 million in full-year sales for 2024 – up an impressive 74% from 2023. The Fire Safety segment, which made up $436.3 million of the total annual sales, was up 93% year-over-year. Narrowing our focus to the last reported quarter, 4Q24, we see that the company had quarterly revenue of $86.2 million, up 45% from the prior year, and an EPS figure of 90 cents, marking a strong turnaround from the 9-cent net loss reported in 4Q23.
We should note two facts here. First, Perimeter Solutions typically reports its strongest results during Q3 – which makes sense, as that covers the hot late-summer months and the height of the US wildfire season. And second, the company’s stock peaked in January of this year and is now down 24.5% from that high point.
Covering this stock for UBS, analyst Joshua Spector first explains why the current dip in share price is a buying opportunity, writing, “PRM has shown the power of its operating model, lifting recurring EBITDA by >70% on a similar fire season (2024 vs 2020/21). Yet the stock has declined [since] mid-January. We see this dip as a buying opportunity… 2025 is a reset year as we assume a ‘normal’ fire season vs above avg 2024, however this 2025 base is ~$100M above prior ‘avg’ years, and we model a ~7% CAGR off this higher base (w/o capital deployment). We think PRM stock is pricing in either no EBITDA growth from here or 2025 EBITDA ~25% below UBS 2025e.”
Looking ahead, the analyst sees recent high-profile fire activity as a likely factor in boosting the company’s profile, and he adds, “PRM is a leader in fire retardants used to fight wildfires. We believe recent memory of L.A. wildfires will increase the call for more ability to fight, contain, and prevent wildfires. This should catalyse growth in PRM’s volumes, absent growth in acres burned, and provide more firepower to PRM’s earnings algorithm.”
These comments support Spector’s Buy rating on the shares, while his $14 price target implies that PRM will gain 33.5% in the next 12 months. (To watch Spector’s track record, click here.)
There are only 2 recent analyst reviews on record for this stock, both are positive – making the consensus view a Moderate Buy. The stock is trading for $10.49, and its $16 average target price suggests a 52.5% gain in the year ahead. (See PRM stock forecast.)
Cryoport, Inc.(CYRX)
Next on our list is Cryoport, a global leader in the field of cold storage and transport, as applied in the world of biotech. The company is a specialist in cryogenic storage systems, biostorage and sample processing, and life science-focused courier activities. Cryoport’s expertise in cooling systems, cold storage, and cold transport has made it a global leader as a provider of support services for biomedical clinical trials and for commercial therapies for regenerative medicine. The company is based in Tennessee and operates from 50 facilities in strategic locations around the world. When the biotech field needs mission-critical support in bio-logistics, bio-storage, bio-processing, and cryogenic cooling, Cryoport has become a go-to name.
Cryoport operates through several business units, each with a particular focus. The company’s eponymous unit, Cryoport Systems, handles a globally integrated, temperature-controlled supply chain specialized for the Life Sciences field. The CRYOPDP segment is another logistics specialist, partnering with biopharma and clinical trials companies on the global scene. The company’s MVE segment is a preferred player in the global field of cryogenic storage and shipping. And finally, CRYOGENE is a US-based medical biorepository, providing secure cold storage for biological specimens and related supplies.
In all, Cryoport employs over 1,100 people in 50 facilities across 17 countries. This network serves customers in a wide range of specific applications, including biopharmaceuticals, reproductive medicine, and even animal husbandry. Other important users of Cryoport’s services include government agencies, research institutions, and universities.
When we turn to the financial side, we see that Cryoport generated $59.5 million in revenue during the 4Q24, for a 4% gain year-over-year and beating the forecast by $1.03 million. At the bottom line, the company’s earnings came to a net loss of 42 cents per share, missing the estimates by 13 cents per share. The company saw full-year 2024 revenue of $228.4 million, which was in line with the previously published guidance figures. We should note here that CYRX shares have fallen by 66% in the past 12 months.
For UBS analyst Dan Leonard, however, this share price weakness presents a chance to buy in. He explains why he is positive on CYRX, noting that the company has long-term strengths that should outweigh nearer-term headwinds, writing,
“Our Buy rating on CryoPort reflects our view that scaling cell and gene therapy service offerings provide a credible pathway to low-double-digit+ (~10%+) mid-long term sales growth and positive free cash flow. Headwinds in MVE and broader biopharma market weakness have depressed sales, but these challenges are well understood, appear to be stabilizing, and provide an attractive entry point, in our view.”
Along with that noted Buy rating, Leonard gives CYRX shares a price target of $11, suggesting a handsome 78.5% upside potential on the one-year horizon. (To watch Leonard’s track record, click here.)
For the Street as a whole, this stock gets a Moderate Buy consensus rating, based on 8 recent reviews that include 5 to Buy and 4 to Hold. The shares are priced at $6.16, and their $10.64 average price target implies a one-year upside potential of 73%. (See CYRX stock forecast.)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
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.
