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Market legend Warren Buffett has said of investing, “If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.” Like most of his bon-mots, this quip embodies a basic fact about the stock markets: it’s a long-term game.

There are serious headwinds in the market today, ranging from worries over the persistently stubborn inflation and the Fed’s high-interest rate policy to a steadily worsening geopolitical situation, and investor sentiment is getting wobbly in response.

But covering the situation from the investment bank J.P. Morgan, global investment strategist Madison Faller sees a reason for investor optimism. Acknowledging the headwinds, she meets them head-on, describing these uncertain times as times of opportunity – if investors will play the long game.

In her words, “When markets are volatile, it can help to re-focus on what you want from your portfolio in the long run. The world is in transition – from pretty much any lens you look: the economy, policy, world order, technology and climate. Navigating that uncertainty can be overwhelming, but it can also be empowering… Despite the headwinds, a world in transition may offer an attractive entry point for long-term investors.”

We can follow Faller’s lead, and look for a bright side despite today’s market headwinds, taking a cue from the JPMorgan stock analysts. They’ve been pointing out two stocks they see primed for gains; we are talking returns of at least 40% over the next 12 months.

We ran them through the TipRanks database to see if there’s widespread agreement on the Street that these are both worth leaning into right now. Let’s take a closer look.

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PVH Corporation (PVH)

We’ll start with PVH Corporation, a soft goods company and the owner of two of the fashion world’s best-known brand names: Calvin Klein and Tommy Hilfiger. Both are already giants in the industry, and PVH is always working to fine-tune the brands’ image and expand market share. The company’s goal is to make Calvin and Tommy the world’s most desirable lifestyle brands.

By the numbers, PVH has come a long way toward that goal. The company operates in more than 40 countries around the world and brought in nearly $9 billion in global revenue in the full year 2022. The company’s plan includes winning with its product, its customer engagement, and its digital marketing, and it does not shy away from using controversy to catch attention – as shown by its history of risqué ads for Calvin Klein.

PVH has been in business since the 1880s and today operates more than 1,000 clothing factories and approximately 6,000 retail locations. In its last quarterly financial release, for 2Q23, the company reported results described as ‘strong,’ with $2.2 billion in revenue. That was up 3.8% year-over-year and came in $20 million ahead of the forecast. The firm’s bottom-line figure, a non-GAAP EPS of $1.98, was 23 cents better than had been anticipated. For 2023 as a whole, PVH is guiding toward a revenue increase in the range of 3% to 4%. PVH’s results were supported by an 11% increase in the company’s ‘direct-to-consumer’ revenue.

In his coverage of PVH for JPMorgan, analyst Matthew Boss bases his upbeat view on the company’s demonstrated ability to deliver on its plans. He writes, “We rate PVH Overweight – with a multi-year brand ‘unlock’ underway in our view as mgmt focuses on driving increased desirability of the Calvin Klein and Tommy Hilfiger brands w/ incremental opportunity in N. America (brand whitespace & bolstered partnerships, increasing Hero product focus, and inventory reduction).”

These comments back up Boss’s Overweight (i.e. Buy), and is price target, now set at $119, implies a 64% upside by this time next year. (Watch Boss’s track record)

Overall, there are 11 recent analyst reviews on file for PVH, and their breakdown of 7 Buys and 4 Holds leads to a Moderate Buy consensus rating for the stock. The shares are trading at $72.31 with a $102.18 average price target, for a 41% upside potential in the coming year. (See PVH stock forecast)

Walgreens Boots Alliance (WBA)

Now we’ll switch from clothing to the pharmacy industry, where the Illinois-based Walgreens Boots holding company is a major player in the retail pharmacy sector in both the US and the UK. The company name reflects its makeup; it is the owner of the US-based Walgreens chain and the UK-based Boots chain of retail pharmacy stores. In addition, the company owns several pharmaceutical manufacturing and distribution centers.

In all, Walgreen Boots has more than 13,000 retail locations across 9 countries, employing over 331,000 people – of whom more than 31,000 are pharmacists. The company’s largest presence is in the US, where it has 8,886 retail locations; there are another 3,989 locations in the international market.

This company has taken a hit in recent months due to the continued fading of the COVID pandemic emergency and related measures. In the firm’s recent report for fiscal 4Q23 and the full fiscal year 2023, the quarterly bottom line was down year-over-year and missed the forecast. The earnings figure, reported as 67 cents per share in non-GAAP measures, was down 18% from the year-ago period and was 2 cents below the estimates.

The earnings miss came even as Walgreens Boots reported a solid gain in revenue. Quarterly revenue, at $35.4 billion, was up more than 9% year-over-year and came in $580 million over the forecast. For the full fiscal year, which ended on August 31, the company’s top line rose ~5%, to $139.1 billion.

Walgreens Boots pays out a solid dividend to shareholders, and on October 26 declared the next payment, set to go out on December 12, at 48 cents per common share. This annualizes to $1.92 per share, and gives a yield of 9%. In an impressive metric that dividend-minded investors should note, Walgreens Boots, and its predecessor, Walgreens Co., has not missed a dividend payment in 91 years.

5-star analyst Lisa Gill covers this stock for JPMorgan, and her positive outlook is based on a combination of factors, including good risk-reward, improved management, and a favorable valuation.

“We see the new leadership team and FY24 guidance as creating a relatively favorable risk/reward balance. Our rating is predicated on an upgraded management team executing vs an achievable bar from trough results and a valuation that appears to more than incorporate the uncertainty of the current situation. While this does require that WBA executes on a proof-of-concept and shows consistency and credibility in its guide, we think that there is upside to the current range based on this as the company progresses through FY24 and clears some overhangs around debt and the dividend,” Gill opined.

Quantifying this stance, Gill rates WBA an Overweight (i.e. Buy), and sets a price target of $30 to point toward a ~42% upside for the next 12 months. (Watch Gill’s track record)

While Gill’s outlook is bullish, the consensus from the Street is more cautious. WBA shares have a Hold (i.e. Neutral) consensus rating, based on 9 recent analyst reviews that include 2 Buys, 6 Holds, and 1 Sell. However, the $26.89 average target price suggests a potential one-year upside of 27% from current levels. (See WBA 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.