Thinking of selling stocks now? JPMorgan says that could be risky

Stocks are risky assets. Year to date, the S&P 500 is down around 10%. And as investor concern over the Russia-Ukraine conflict grows, it can be very tempting to hit the sell button and get out.

But according to JPMorgan, that could also be a risky move.

“If one is selling on the back of the latest geopolitical developments now, the risk is of getting whipsawed,” JPMorgan analysts write in a note to investors on Monday.

A whipsaw scenario is where a stock moves in one direction and then quickly moves in the opposite direction. In today’s market, it means the drop that many stocks experienced since the war in Ukraine started may not be long-lasting.

“Historically, vast majority of military conflicts, especially if localized, did not tend to hurt investor confidence for too long, and would end up as buying opportunities,” the analysts further explain.

Of course, that doesn’t mean every stock is worth holding during this uncertain time.

So let’s take a look at three companies that JPMorgan finds particularly attractive.

U.S. Bancorp (USB)

With $573 billion in assets, U.S. Bancorp is the fifth-largest banking institution in the country.

The company offers a wide range of products and services, including consumer and business banking, payment services, corporate and commercial banking, and wealth management and investment services.

In Q4, U.S. Bancorp earned a profit of $1.07 per share, representing a 13% increase from a year ago.

On Feb. 3, JPMorgan analyst Vivek Juneja reiterated an “overweight” rating on the company, citing its loan growth and sensitivity to higher interest rates.

Banks lend out money at higher rates than they borrow at, pocketing the difference. When interest rates increase — a very likely scenario this year given the Fed’s use of monetary policy to tame inflation — the spread earned by banks typically widens.

Trading at around $54 per share, U.S. Bancorp is down 5.2% year to date.

But a rebound could be on the horizon. Juneja has a price target of $72 for the bank stock — roughly 33% above the current levels.

Coinbase Global (COIN)

Bitcoin has been on a rollercoaster ride.

It traded around $32,000 at the start of 2021, surged to over $68,000 in November, but is now down to $43,700.

Unsurprisingly, as the largest cryptocurrency exchange in the U.S., Coinbase has experienced heavy volatility.

Shares traded at over $350 apiece last November. Today they are at $194.

That kind of volatility isn’t for everyone. But for those looking for exposure to the crypto world, note that Coinbase makes money whenever people buy and sell crypto on its platform, so it could be a pick-and-shovel play.

In Q4, Coinbase earned $2.5 billion in net revenue and $840 million in net income. The company ended the year with 11.4 million monthly transacting users.

The sell-off in bitcoin has prompted several Wall Street firms to lower their price targets on Coinbase, including JPMorgan.

Last month, JPMorgan analyst Kenneth Worthington reduced his target for the company from $345 to $296.

However, Worthington maintained an “overweight” rating for Coinbase. Given where the stock sits today, the analyst’s price target implies a potential upside of over 50%.

Zoom Video Communications (ZM)

Tech companies have had a hard time trying to impress investors this earnings season, with even mega-cap names like Netflix and Meta experiencing heavy sell-offs after they reported.

Zoom is among the latest to experience a post-earnings setback. The video communications company reported Q4 results after the closing bell on Monday. On Tuesday, the stock fell by 7.4%.