3 Stocks J.P. Morgan Just Upgraded and Why They’re Bullish

Key Points

• Analysts at J.P. Morgan Chase decided to take a similarly bullish view on the industrial and consumer discretionary sector with select stocks.
• These picks all have a strong fundamental thesis behind them that acts as potential tailwinds to carry them higher.
• With double-digit upside, a strong story, and also institutional buyers behind them, investors should take this list home.

Whenever analysts from Wall Street’s biggest banks decide to come together to boost a particular group of stocks, retail investors do well to watch the trends, attempt to reverse engineer their views and opinions, and, more importantly, where they stem from. Confident analysts often land on a bullish or bearish view of a particular industry, where select stocks will gain more market attention.

Today’s list of recent stock upgrades comes from a unified view from analysts at J.P. Morgan Chase & Co. NYSE: JPM and what one of the biggest banks sees for different industries in the United States economy. Starting with the industrial sector, a broader macro view has landed these analysts in a couple of household name stocks with attractive upside and a worthy mention in the consumer discretionary sector with just as much upside.

Stocks like Cummins Inc. NYSE: CMI are making this list as vital players in the imminent rebound in the transportation sector and a broader breakout in the manufacturing sector for the United States. Benefitting from this same tailwind in the industrial space, shares of Caterpillar Inc. NYSE: CAT also came on the radar for these analysts to start boosting ahead of a potential rally. Lastly, the recent dips in Celsius Holdings Inc. NASDAQ: CELH drove analysts to recognize its upside.

Why Analysts Suddenly Boosted Cummins Stock

Even though Cummins stock is already trading at 95% of its 52-week high, showing investors that bullish momentum is in its favor for starters, Wall Street analysts are still willing to boost the stock to a new high for the year, and it is all based on one simple view in the industrial space.

After a 25-month contraction in the manufacturing PMI index, some analysts expect a rebound in 2025, especially as the Federal Reserve (the Fed) suggests more interest rate cuts coming up. These cuts could create a potentially better business environment, bringing on more activity.

Activity means more demand for the transportation of raw materials and finished products across the United States, and investors shouldn’t be surprised to see the construction sector benefit from this trend as well. Because Cummins supplies diesel and natural gas engines to the transport and construction industry, it is relatively simple to connect the dots.

That is why analysts from J.P. Morgan decided to boost Cummins stock’s price target to $420 a share and also placed a more optimistic rating of Neutral for the company, up from its Underweight rating previously. Cummins stock would have to stage a 14.3% rally from where it trades today to prove these views right.

Caterpillar Stock’s Upside, a Byproduct of Expansion

As the manufacturing PMI attempts its rebound from this multi-year contraction, it won’t only be Cummins stock that makes a new test toward its high prices; Caterpillar is also in the same boat, not only as a domestic supplier of construction equipment and machinery but also as a net exporter.

Analysts from Morgan Stanley recently became bearish on the dollar, which aligns with J.P. Morgan's views on industrial stocks. A lower dollar would give foreign buyers more buying power for American-made exports, as their currencies would become relatively stronger.

That being said, Caterpillar and Cummins stocks stand in the middle of this potential export storm, which brings new orders and higher earnings per share (EPS). Looking into the future, analysts from J.P. Morgan decided this stock should be trading higher, so they placed a price tag of up to $515 alongside an Overweight rating for Caterpillar stock.

This valuation would call for a net rally of up to 35.3% from where it trades today, not an easy nor common feat for an industry behemoth with a $183.7 billion market capitalization.

Celsius Stock’s Discount Is Undeniable

After stocks like Coca-Cola Co. NYSE: KO and PepsiCo Inc. NASDAQ: PEP traded lower on the proposed changes from the new health administration head, Celsius was dragged down along with these other names even though it doesn't have half the ingredients that these changes targeted.

That's why analysts decided to give the stock an Overweight rating, and this time, J.P. Morgan initiated coverage of the stock at a $37 price target. Considering the stock now trades at 27% of its 52-week high, Celsius can be considered a great risk-to-reward setup for retail traders today.

Carrying a 16.3% upside potential from these new targets is one thing; another is to consider the recent 3.2% boost in holdings from State Street, an institutional investor who now holds up to 2.3% of Celsius stock through a $166.9 million position today, and another gauge for investors to consider when building their bullish outlooks.