Coming up with a great trade idea is easier than most investors think. They just need to get their hands on the right tools and datasets to arrive at said ideas. After that, it all comes down to managing the price action that comes after placing the idea. Today, investors have a chance to reverse engineer the decision behind a boost in one manufacturing stock.
Specifically, this company provides solutions to the transportation sector, helping several industry names meet their demand schedules. The combination of manufacturing and transport will give investors the best odds of outperforming the market in the coming quarters, as these are the two places most of the so-called “Smart money” is looking to be positioned in.
There are technical as well as fundamental reasons why investors should pay attention to recent analyst upgrades in shares of Avient Co. (NYSE: AVNT), backed by these tailwinds to expose them to potential double-digit upside from where the stock trades today, a theme that will become clear through the following fundamental breakdowns.
Why Avient Stock?
Across the different chemical manufacturing stocks, one attractive setup differentiates Avient from all other peers. The company’s products act as a vital supporter of the packaging and transportation industry, which can extend from the more straightforward consumer and business shipping needs to commercial and aerospace transport.
Knowing that the transportation industry is starting to pick up in activity, as judged by the recent services PMI data, stocks like United Parcel Service Inc. (NYSE: UPS) and FedEx Co. (NYSE: FDX) have seen favorable price action and treatment from Wall Street as well.
Investors can see analysts from J.P. Morgan Chase boost FedEx stock to a high of $372 a share as recently as January 2025, calling for a 36.3% upside from today’s prices. United Parcel Service stock’s consensus price target of $151.1 a share implies a rally of 16.5% as well; this current sentient can be tied to the recent industry breakouts.
This is why Avient is starting to gain more attention from these same Wall Street analysts. More than that, the company is also exposed to the potential tailwinds behind a bigger name like Boeing Co. (NYSE: BA), and proper industry diversification will be key for Avient stock to make new highs.
The Market’s Take on Avient Stock
Starting with the price action, a low price of only 70% of its 52-week high would make rating this company easier for Wall Street analysts today, as the risk-to-reward ratio in this name favors the bulls. Those from Wells Fargo decided to take on this “low-hanging fruit” as recently as December 2024.
These analysts not only reiterated their overweight rating on Avient stock but also boosted their valuations to a high of $59 a share. To prove this new view correct, the stock would have to stage a rally of up to 38.8% from where it trades today, and investors now have a few tailwinds to consider behind this potential outcome.
The stacking bullish evidence in Avient stock might also be the cause behind the company’s 12.1% collapse in short interest over the past month, a clear sign of bearish capitulation for the bulls to consider in their bullish thesis buildup. Now, a couple of institutional buyers have come on the scene to replace some of these bears.
Those from State Street decided to boost their Avient stock holdings by 3% as of November 2024, bringing their net position to a high of $213.9 million today, or 4.6% ownership in the company. However, the buying sprees didn’t stop there, as buyers from J.P. Morgan Chase also decided to get some Avient stock exposure as well.
As of December 2024, this institution reported a 22.4% boost to its position, bringing its holding to a high of $30.6 million. Wall Street analysts and buyers seem to have agreed on the optimistic outcomes in Avient stock for the coming months.
More than that, some of these views can be further justified by the current earnings per share (EPS) forecasts being floated by analysts. The expectations are set for $0.87 in EPS for the same quarter next year, representing a net increase of 33.8% from today’s $0.65 reported EPS.
Using these bullish points, investors now have a better chance at aligning their portfolios with the winning picks out of Wall Street, with a great risk-to-reward ratio to make the first quarter of 2025 a winning one for investors.
