J.P. Morgan Says These 2 Beaten-Down IPO Stocks Could Rebound

Geopolitical tensions in the Middle East have escalated in recent days, reviving concerns about oil prices, inflation, and the global economic outlook. Although the uncertainty has added another source of volatility, the S&P 500 remains within 2% of its all-time high, suggesting investors expect the broader economic impact to remain contained.

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That view is shared by JPMorgan’s Head of Global and European Equity Strategy, Mislav Matejka, who believes investors should continue using market weakness linked to geopolitical events to add to equity positions while keeping their focus on longer-term market fundamentals.

“We have consistently argued since 2nd half of March to use the equity weakness brought on by the Iran conflict to buy into, as the off ramp and the eventual deal were likely, in our view. To be clear, the risks of renewed flareups remain, but we believe one should keep using any dips on the back of adverse geopolitical headlines in order to add. If the conflict impact keeps getting priced out, as we suspect, then oil price, inflation rates, inflation expectations, bond yields, central banks rate projections, and even eventually USD, could all reverse their upmove that was seen during Q2,” Matejka noted.

The stock analysts at JPMorgan are following this thread – but with a twist. They’ve found two stocks that got off to a rocky start following their recent public market debuts, but are primed to rebound. How much upside does JPMorgan see ahead, and does the rest of Wall Street agree? Let’s give both stocks a closer look and find out, using data drawn from the TipRanks platform.

ERock (EROC)

We’ll start with a power company, but one with a twist. ERock is not a traditional grid power producer; rather, the company focuses on providing online power solutions at utility-grade scale for customers in a wide range of industries, including data centers, utilities, healthcare systems, manufacturers, and even government agencies. What these entities have in common is a need for energy that is independent of the regular power grids. ERock is a reliable delivery agent, offering its customers scalable energy infrastructure that fits the needs of a fast-growing market.

What makes ERock stand out is its status as a turnkey provider. It does not just provide power generation capacity – the company also provides the design, engineering, and testing that allows power generation installations to operate in line with existing networks.

The company has been in business since 2006 and today is known for its natural gas generators and modular power blocks that help businesses maintain critical operations during outages. The ability to deploy reliable backup power is more important than ever as electricity demand rises and grid reliability comes under increasing pressure. ERock’s power systems are built to proprietary standards, and are designed to support key advantages: rapid deployment, long-duration reliability, low local emissions, and scalable performance.

ERock went public through an IPO on June 10. The company sold 27,906,977 shares at $21.50 each, raising about $600 million in gross proceeds. Since then, the stock has fallen about 42% as investors have taken a cautious view despite the company’s exposure to the fast-growing AI data center market. Much of that caution reflects concerns over persistent net losses, uncertainty about how quickly its roughly $1.3 billion contracted backlog will convert into revenue, and customer concentration risks. In addition, about 80% of the company’s sales come from Texas, while roughly half of its 2025 revenue was generated by just three customers, raising questions about the durability and diversification of its growth.

Despite those concerns, there is reason for optimism about EROC’s long-term prospects, and JPMorgan analyst Mark Strouse believes the company is well positioned for the years ahead.

“We believe EROC’s modular, natural-gas fired power solutions are ideally positioned to benefit from structural demand for bridge power solutions that can supply power before a grid connection is available, a market we believe particularly attractive for data centers. Given EROC’s ability to also provide grid services in addition to serving as back-up or dispatchable power once a grid connection is made, we also expect EROC to gain share from competing diesel generators that are more limited to back-up only. We believe contracted backlog supporting visibility into above-average growth off a low base should buoy the company’s valuation as earnings ramp,” the 5-star analyst opined.

Reflecting that confidence, Strouse rates EROC shares Overweight (i.e., Buy) and assigns a $24 price target, implying a 122% upside over the next 12 months. (To watch Strouse’s track record, click here)

The rest of Wall Street is similarly bullish on the stock. EROC has earned a Strong Buy consensus rating based on 8 unanimous Buy recommendations, while the average price target of $22.63 points to about 109% upside over the next 12 months. (See EROC stock forecast)

Wise (WSE)

Next up is fintech company Wise, a leading provider of cross-border money transfers and multi-currency accounts for both consumers and businesses. Founded in 2011 and headquartered in London, the company now serves around 19 million customers worldwide. During fiscal 2026, Wise processed more than $243 billion in cross-border payment volume, up 31% year over year, while nearly half of its net revenue came from products beyond cross-border transfers, highlighting the company’s expanding ecosystem.

Wise boasts several advantages for investors. These include long-term plans for expanding the business while continuing to grow profits, as well as a $43 trillion annual cross-border payments market and a strong track record of execution. The company has steadily grown its customer base while maintaining industry-leading pricing, with an average fee of just 0.52% per transaction.

On May 11, Wise began trading on the Nasdaq after moving its primary listing to the U.S. exchange while continuing to trade on the London Stock Exchange. The move is intended to raise the company’s profile among U.S. investors while supporting its long-term expansion in one of its largest growth markets. Since then, however, the stock has fallen 18%.

The share-price decline is tied to Wise’s disclosure on June 1 that Belgian prosecutors are investigating whether its European operations were used to launder proceeds from fraud, corruption, and drug trafficking, with more than €500 million ($582.5 million) in suspicious transactions under scrutiny. Belgium is now the third regulator or authority to scrutinize Wise’s compliance controls, following a 2023 UK sanctions breach finding and a 2025 U.S. state-regulator fine over Bank Secrecy Act shortcomings. No charges have been filed, and Wise disputes that the investigation implies wrongdoing.

Despite these regulatory challenges, Wise’s underlying business has continued to deliver solid growth. In fiscal year 2026, reported last month, Wise generated $2.5 billion in net revenue, up 19% year over year. The company’s before-tax income reached $660.4 million, representing a healthy 26% margin.

That combination of strong operating performance and a weakened share price has caught the attention of JPMorgan analyst Craig McDowell, who remains optimistic about the company’s long-term outlook.

“We rate Wise as an Overweight, on the view that Wise can continue to grow cross-border volumes and revenues by taking share as it exploits its competitive (cost) advantage which we view as sustainable, but requiring continued investment in technology, marketing and price. Wise should see multiple expansion as the market appreciates its evolution towards a financial services infrastructure provider – with corresponding longer duration and more efficient growth and higher multiple,” McDowell wrote.

That Overweight (i.e., Buy) rating comes with a target price of $17.50, indicating room for a one-year share price gain of 37%. (To watch McDowell’s track record, click here)

The rest of the Street largely agrees with McDowell’s outlook; WSE sports a Moderate Buy consensus rating based on 11 recent analyst reviews, including 9 Buys, 1 Hold, and 1 Sell. With shares trading at $12.62, the average price target of $16.04 suggests about 27% upside over the next 12 months. (See WSE stock forecast)

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.

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