Bank of America (BAC) this week unveiled the top stocks of its for next year among the eleven S&P 500 sectors. Though the bank could hope its picks do much better than they did in 2020.
The $250 billion bank highlighted stocks it thinks will outperform in all the sectors. Three of BofA’s eleven picks, consumer staples Walmart (WMT), materials solid Vale (VALE) and energy NextEra Energy (NEE) are today beating both the S&P 500 and their sectors this year, says an Investor’s Business Daily analysis of information from S&P Global Market Intelligence as well as MarketSmith. Vale carries a strong 95 IBD Composite Rating.
The rest, though, are laggards. BofA seems to be betting 2021 is a year for left behind stocks to get up. Airline Alaska Air (ALK) is down 26 % this year. Which means its stock this year trails the S&P 500’s 15.6 % gain by a whopping 41 percentage points. although it is in addition 35 percentage points behind the Industrial Select Sector SPDR’s (XLI) 9 % gain this season. BofA didn’t select a single big cap technology-related S&P 500 stock.
“These stocks align with themes in our 2021 season ahead,” according to the report. Those themes are value stocks over growth, small stocks more than large ones, cyclical stocks over protective plus ESG.
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Analysts Agree With Three BofA S&P 500 Picks Wall Street analysts do not share BofA’s bullishness on nearly all of the favored stocks of its. Though they do agree on three of them.
Energy firm Chevron (CVX), financial Allstate (ALL) and real estate Realty Income (O) are the only S&P 500 stocks that BofA’s analysts suppose will gain ten % or even much more in 2021.
Highest hopes are actually for Chevron. Analysts think the big energy stock is going to be well worth 101.90 in 12 months. If that is correct, that would be nearly 16 % implied upside.
BofA, in its report, heralded Chevron’s size placing it in spot to win if investors rotate back into worth stocks. They also applauded the company’s sound cash flow. Right after losing an estimated $4.7 billion in 2020, analysts believe Chevron will make $4.4 billion in 2021. What should you know before you purchase Chevron stock?
Allstate is an additional stock which S&P 500 analysts agree with BofA on. Analysts believe the stock, which dropped nearly 6 % this season, is going to rally almost twelve % in the following 12 months. BofA holds the organization out for the high ESG score of its and quality that is high. Street analysts also feel Allstate’s benefit per share will jump nineteen % in 2020.
BofA’s Top Stock Picks For 2021
Company Symbol YTD Gain Upside To Street Price Target* Sector Composite Rating
Walt Disney (DIS) 19.9% -0.8% Communication Services forty five
Hilton Worldwide (HLT) 5.5% -1.9% Consumer Discretionary forty five
Walmart (WMT) 22.9% 9.7% Consumer Staples 57
Chevron (CVX) -26.8% 15.6% Energy 14
Allstate (ALL) -5.2% 11.1% Financials sixty three
HCA Healthcare (HCA) 11.8% -1.7% Health Care 90
Alaska Air Group (ALK) 26.3% 7.2% Industrials thirty six
Qorvo (QRVO) 37.1% 2.8% Information Technology 95
Vale (VALE) 30.6% 5.1% Materials 95
Realty Income (O) -17.2% 12.5% Real Estate twenty two
NextEra Energy (NEE) 24.2% 4.9% Utilities 52
Sources: BofA, S&P Global Market Intelligence, * based on 12 month Wall Street target
2020 A rough Year For BofA’s Picks It’s understandable investors might be skeptical of BofA’s picks. The bank largely whiffed this season. But to its credit, it issued the own mea culpa of its and published its misses.
In reality, all 11 of BofA’s foremost stock picks of 2020 lagged their sectors. And many by a great deal. In a year where technology shot the lights out, BofA’s choice in the sector was dog Intel (INTC), which dropped sixteen % in 2020. Which would mean that it lagged the Technology Select Sector SPDR (XLK) by a hard 56 percentage points, as soon as the sector ETF shot up 40 %. Far better to stick with the best stocks, in case you would like to earn a living.
BofA also chose Exxon Mobil (XOM) as its main power pick in 2020. It is difficult to think of many companies that have suffered a lot more in 2020. It lagged the abysmal thirty three % drop in the Energy Select Sector SPDR (XLE) by four percentage points. And it suffered the indignity of getting tossed out of the Dow Jones Industrial Average, too.
Meanwhile, the sole Bank of America Stock | Fintech Zoom
pick for 2020 to beat the S&P 500 is Disney (DIS). In a season of pandemic theme park closures, the stock gained roughly 20 %. And that might explain exactly why Disney is actually the only 2020 BofA pick to land on its main list for 2021, too.