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JPMorgan Chase’s favorite stocks list heading into August include two new picks — both of which are auto retail companies. The Wall Street firm added CarGurus and Carvana to its focus list, according to a Tuesday note. The focus list is a compilation of the firm’s best ideas across three investment strategies: growth, value and short ideas. CarGurus was named to the list as a growth idea. JPMorgan analyst Raj Gupta has an overweight rating on the stock. The $29 price target is roughly 27% above where shares closed Monday. “See favorable cyclical positioning with potential for upward revisions to both earnings as well as multiple on proven execution with time,” Gupta wrote. On the other hand, Carvana was added as a short idea. Gupta recently downgraded the stock to underweight, and said it has the greatest downside to its price target because of continued challenges for the firm. His $15 price target is 67% below where shares closed Monday. “Used car industry likely to remain tough for longer and recovery off of trough gradual and market share growth coupled with operating leverage still unproven at CVNA,” Gupta wrote. Separately, JPMorgan removed CMS Energy . Analyst Jeremy Tonet had an overweight rating on the stock, and continues to “look favorably upon CMS’s top-tier 7-8% growth outlook and generally constructive MI regulatory back drop.” However, he said the company’s stock price has recently “narrowed the gap” with premium competitors. Here are some names from the list. Caterpillar was on the list as a value idea. Tonet has a price target of $275, implying shares could rise about 3%. The stock is up 10% this year. Entergy is another value pick. The analyst’s $121 price target is 17% above where shares closed Monday. It’s down 8% this year. Amazon.com and HP are also on the list.
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