The broader market will finish the year below its current level, but there are plenty of stocks opportunities, according to the global equity team at BofA.
BofA’s U.S. equity call is for the S&P 500 (SP500) (NYSEARCA:SPY) to end the year at 4,000 with EPS down 9% year on year at $200. The bull case is 4,600 ane the bear case is for a drop to 3,000.
Strategist Anthony Cassamassino compiled a list of the top picks from the research team.
“The list below represents an informal survey of our Senior Research Analysts and is one of but many lists and screens that BofA Research regularly updates to satisfy a diverse spectrum of investment goals,” Cassamassino wrote in a note.
The top Materials (XLB) and Industrials (XLI) stocks (comments by covering analyst):
- Ball Corp. (BALL), price target $61 – “Despite risks from the combination of high retail pricing and lower promotional activity for its large beer/beverage customers, we continue to see the beverage can as well positioned versus other substrates and we’ll continue to evaluate industry volume trends in upcoming months.”
Seeking Alpha Quant Rating of Sell with a warning.
- Barrick Gold (GOLD), $25 – “We see robust free cash flow, a shareholder friendly capital allocation, a rapidly improving balance sheet and several key growth projects advancing.”
Quant Rating of Hold with top rating in profitability.
- CoStar (CSGP), $100 – “CoStar has six business segments that can power CSGP’s outsized and defensive compounding growth potential.”
Quant Rating of Hold with an F for for Valuation.
- Nutrien (NTR), $111 – “We believe US agriculture will improve due to lower corn acres and increased demand, which would particularly impact NTR.”
Quant Rating of Hold with a top grade for Growth.
- CNH Industrial (CNHI), $19.25 – “Now that the spin of On Highway is completed, we see room for more upside as CNH executes on its core long term ag strategy.”
Quant Rating of Strong Buy with an A+ for revisions.
- CP Rail (CP), $88 – “CP continues to execute on its operational overhaul, which has enabled its operating ratio to improve by 20 percentage points since ’09.”
Quant Rating of a Hold with a big disparity in valuation and profitability.
- Fortive (FTV), $87 – “We expect Fortive’s management team to be successful at sourcing and integrating accretive and synergetic acquisitions.”
Quant Rating of a Hold trending up in the last month.
- Raytheon Tech (RTX), $120 – “Both United Technologies and Raytheon are subsystems suppliers in their respective markets and the combined entity, as the third largest Aerospace & Defense company in the world, has significant breadth and depth across the industry.”
Quant Rating of a Hold with the bottom line keeping it higher.
See which names led Industrials this past week.