‘Stay Invested': Wells Fargo Suggests 2 Stocks to Ride the Market Recovery

Yahoo

24-05-2025

After a bruising spring that saw the stock market tumble under the weight of sweeping tariffs, stocks have mounted an impressive comeback. Since hitting a low on April 8, the S&P 500 has surged 17%, lifted by a temporary U.S.-China tariff truce and a powerful rally in mega-cap tech stocks, which have helped restore investor confidence.
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However, underlying risks remain. Elevated Treasury yields, concerns over the U.S. fiscal deficit, and the potential for renewed trade tensions could pose challenges to the sustainability of this rally.
Even so, Wells Fargo strategist Christopher Harvey is urging investors to stay the course. A consistent bull, Harvey hasn't wavered on his bold outlook – he's still targeting the S&P 500 at 7,007, a move that would add another 20% to today's gains. 'We felt [2H25] was always going to be much better,' Harvey said, referring to his prediction. 'We thought that tariffs were a negotiating ploy, which turns out mainly to be true. We thought the underlying economy and the strength of the consumer, while not pristine or stellar, were still solid.'
The stock analysts at Wells Fargo are running with Harvey's bullish theory, and are picking stocks to ride a market recovery.
We've used the TipRanks platform to pull up the broader Wall Street picture on two of the Wells Fargo picks; both have Buy ratings and double-digit upside potential. Here's a closer look at them.
Blueprint Medicines (BPMC)
The first Wells Fargo pick we'll look at is Blueprint Medicines, a biopharmaceutical company operating at both the commercial and clinical stages. Blueprint's work focuses on the invention of new medicines with life-changing potential for patients suffering from severe diseases. The company's medication portfolio is geared toward two fields – allergy/inflammation and oncology/hematology – each of which features large numbers of conditions with high unmet medical needs.
On the commercial side, Blueprint is the maker of avapritinib, which was approved by the FDA in 2020 for the treatment gastrointestinal stromal tumor (GIST) that is not suitable for surgical treatment and then in 2023 for the treatment of indolent systemic mastocytosis (ISM). Avapritinib is marketed under the brand names Ayvakit and Ayvakyt.
Currently, product sales of avapritinib make up Blueprint's revenue stream. For the first quarter of this year, Blueprint's product revenue came to $149.4 million, up 55% year-over-year – although it was $7.49 million below expectations. This figure included $129.4 million in US sales, and $20 million outside of the US. The company has raised its revenue guidance for this medication, and expects to bring in between $700 million and $720 million in global net product revenue from avapritinib (Ayvakit) in the full-year 2025. We should note that, along with the strong revenue growth, Blueprint saw a profit in 1Q25; the 1-cent EPS was 47 cents per share better than had been forecast.
Looking at the company's pipeline, we find that most of Blueprint's drug candidate programs are at early stages of development. The exception is elenestinib, which is the subject of the ongoing Phase 2/3 HARBOR study in the treatment of indolent systemic mastocytosis. In addition, Blueprint has initiated two proof-of-concept studies of BLU-808, a drug candidate described as 'a highly selective and potent investigational oral wild-type KIT inhibitor' and under investigation for the treatment of mast cell disorders.
While Blueprint has an active pipeline, it was the company's commercial potential that drew attention from Wells Fargo analyst Derek Archila. Archila notes an interesting catalyst on the horizon for Blueprint, namely that a competitor with a drug candidate that could compete with Ayvakit may soon report clinical trial data. Explaining this situation, Archila writes, 'We believe there is a high probability BPMC shares trade up +5-20% on COGT's bezuclastinib SUMMIT data in July, and view it as a clearing event. Why are COGT's bezu SUMMIT data important? COGT's bezu is also being developed in ISM, Ayvakit's largest mkt oppty, for which they have guided to ~$2B+ in revs by 2030. As a competitor, bezu could capture share and thus far its data updates have shown it is very active in ISM from its Part 1B trial with its reformulated version, though its safety profile remains a concern. For BPMC, COGT's SUMMIT trial has been a modest overhang, so we think getting through this event should be a clearing event.'
For Archila, Blueprint is worth buying, and he puts an Overweight (i.e., Buy) rating on the stock. His $143 price target implies that BPMC will gain 42.5% in the next 12 months. (To watch Archila's track record, click here)
This stock has 15 recent analyst reviews, breaking down to 11 Buys and 4 Holds for a Moderate Buy consensus rating. The shares are priced at $100.34 and their $125.50 average target price points toward a one-year upside potential of 25%. (See BPMC stock forecast)
Cisco Systems (CSCO)
From biotech we'll shift to networking tech, where Cisco is a global leader. The company is known for its varied product lines that bring the latest technology to life in networking, connectivity, and even AI applications. Cisco's technology hardware portfolio has found use in a wide range of industries, providing safe and secure collaboration, cloud management, networking, and security features.
These varied product lines offer solutions to the tech issues that Cisco's customers face – in fields such as government and financial services, education, retail, and healthcare, and in hard industrial areas like the oil and gas industry, mining, and utilities. Cisco has been around since 1984, and today is one of Silicon Valley's major names.
The company continues to innovate, keeping its products and services relevant to the changing tech environment. Prominent among Cisco's more recent developments are its AI-capable products, including Agile Services Networking, which simplifies network architecture while providing the flexibility that AI needs in order to operate, and the company's hypershield security, which is purpose-designed to defend the large-scale data centers that make up the physical support for AI technology.
On the financial side, Cisco's last reported quarter – fiscal 3Q25 – showed some solid results. The company's quarterly revenue, of $14.1 billion, was up 11% year-over-year and came in $90 million better than had been anticipated. At the bottom line, Cisco's 96-cent non-GAAP EPS was 4 cents per share ahead of the forecast.
Within these results, Cisco reported that its product orders, across all of its relevant geographical and customer markets, were up 20% year-over-year. The company's AI infrastructure showed particularly strong results – AI-relevant orders from webscale customers were more than $600 million, and passed the company's target of $1 billion one quarter ahead of expectations.
Cisco's results fully supported the company's dividend, which was declared on May 14 at a rate of 41 cents per common share. At this rate, the dividend annualizes to $1.64 per share and gives a forward yield of 2.6%. The dividend is scheduled for payment on July 23.
Covering this stock for Wells Fargo, 5-star analyst Aaron Rakers starts by noting Cisco's success with AI tech and goes on from there. He writes, 'Our OW rating reflects: 1. Ongoing/accelerating AI order momentum, surpassing $1B+ cum order target for FY25 exiting F3Q25; expected cont'd AI diversification – e.g., large scale sovereign AI opportunities, & LT traditional enterprise adoption. 2. Capitalize on a broadening enterprise campus/branch networking upgrade cycle. 3. Sustainable 30%+ non-GAAP Op. margins with strong & consistent FCF supporting capital return (divs + share buyback); 4. Expanding recurring subscription rev contributions.'
Outlining his positive stance, Rakers, who ranks amongst the top 1% of Street stock experts, adds a bullish outlook: 'With increasing confidence in a normalizing order growth recovery, we see Cisco as presenting a continued EPS upside + value rerate story… We think increasing confidence in a return to sustained growth + AI traction should support a 16-18x NTM P/E.'
Along with that Overweight (i.e., Buy) rating, Rakers puts a $75 price target on CSCO shares, suggesting a one-year gain of 18% for the stock. (To watch Rakers' track record, click here)
This venerable tech company has a Moderate Buy consensus rating from the Street's analysts, based on 16 recommendations that include 9 to Buy and 7 to Hold. Cisco's stock is priced at $63.36 and its $70.77 average price target implies an upside of 12% for the year ahead. (See CSCO 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.
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