Bank of America (BAC) this week unveiled the best stocks of its for next year among the 11 S&P 500 sectors. Though the bank may 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 utility 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 and MarketSmith. Vale carries a strong ninety five IBD Composite Rating.
The majority, however, are laggards. BofA appears to be betting 2021 is a season for left behind stocks to capture up. Airline Alaska Air (ALK) is down twenty six % this season. That means its stock this season trails the S&P 500’s 15.6 % gain by a whopping 41 percentage points. But it’s additionally 35 percentage points behind the Industrial Select Sector SPDR’s (XLI) 9 % gain this season. BofA didn’t choose a single big cap technology related S&P 500 stock.
“These stocks align with themes in our 2021 season ahead,” based on the report. Those themes are value stocks over growth, small stocks more than big ones, cyclical stocks more than 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. although 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 believe will acquire ten % or more in 2021.
Highest hopes are actually for Chevron. Analysts believe the big power stock will be well worth 101.90 in twelve months. If that is accurate, which would be nearly 16 % implied upside.
BofA, in its report, heralded Chevron’s measurement putting it in place to win if investors rotate back to value stocks. In addition, they applauded the company’s stable cash flow. Right after losing an estimated $4.7 billion in 2020, analysts assume Chevron will make $4.4 billion in 2021. What should you know before buying Chevron stock?
Allstate is another stock that S&P 500 analysts agree with BofA on. Analysts think the stock, which dropped almost six % this season, is going to rally nearly 12 % in the next 12 months. BofA holds the company out for its high ESG score as well as quality that is high. Street analysts also believe 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 45
Hilton Worldwide (HLT) -5.5% -1.9% Consumer Discretionary 45
Walmart (WMT) 22.9% 9.7% Consumer Staples 57
Chevron (CVX) -26.8% 15.6% Energy fourteen
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 36
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 22
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 is understandable investors may be skeptical of BofA’s picks. The bank mainly whiffed this season. But to the credit of its, it issued the own mea culpa of its and released its misses.
In fact, all eleven of BofA’s best stock picks of 2020 lagged their sectors. And most by quite a bit. In a season where technology shot the lights out, BofA’s choice in the field was dog Intel (INTC), which dropped sixteen % in 2020. That implies it lagged the Technology Select Sector SPDR (XLK) by a hard 56 percentage points, as soon as the sector ETF shot up forty %. Much preferable to stay with the best stocks, if you want to earn a living.
BofA also chose Exxon Mobil (XOM) as its top power pick in 2020. It’s difficult to think of many companies that have suffered 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 only Bank of America Stock | Fintech Zoom
pick for 2020 to defeat the S&P 500 is actually Disney (DIS). In a season of pandemic theme park closures, the stock acquired roughly 20 %. And that could explain the reason why Disney is the single 2020 BofA pick to land on its main list for 2021, too.