Bank of America (BAC) this week unveiled the top stocks of its for next year with the 11 S&P 500 sectors. Though the bank might hope the picks of its do much better than they did in 2020.
The $250 billion bank highlighted stocks it thinks will outperform in all of the sectors. 3 of BofA’s 11 picks, consumer staples Walmart (WMT), materials solid Vale (VALE) as well as utility NextEra Energy (NEE) are today beating both the S&P 500 and the sectors of theirs this year, states an Investor’s Business Daily analysis of information from S&P Global Market Intelligence as well as MarketSmith. Vale carries a strong ninety five IBD Composite Rating.
The rest, however, 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 season. Which means its stock this year trails the S&P 500’s 15.6 % gain by a whopping 41 percentage points. although it is also 35 percentage points behind the Industrial Select Sector SPDR’s (XLI) nine % gain this season. BofA didn’t choose a 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 worth stocks over growth, small stocks over large ones, cyclical stocks more than defensive plus ESG.
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Analysts Agree With Three BofA S&P 500 Picks Wall Street analysts don’t share BofA’s bullishness on most of its favored stocks. But they do agree on 3 of them.
Energy firm Chevron (CVX), financial Allstate (ALL) and real estate Realty Income (O) are the sole S&P 500 stocks that BofA’s analysts think will get ten % or perhaps 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 twelve months. If that’s correct, which would be almost 16 % implied upside.
BofA, in its report, heralded Chevron’s measurement putting it in place to win whether investors rotate back to worth stocks. In addition, they applauded the company’s healthy money flow. Right after losing an estimated $4.7 billion in 2020, analysts think 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 year, will rally nearly 12 % in the following 12 months. BofA holds the business out for its high ESG score and quality which 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 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 63
HCA Healthcare (HCA) 11.8% -1.7% Health Care ninety
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 may be suspicious of BofA’s picks. The bank basically whiffed this year. But to its credit, it issued the own mea culpa of its and released its misses.
In fact, all eleven of BofA’s foremost stock picks of 2020 lagged their sectors. And plenty of 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 means it lagged the Technology Select Sector SPDR (XLK) by a hard 56 percentage points, as soon as the sector ETF shot up forty %. A lot better to stay with top stocks, if you want to earn money.
BofA even chose Exxon Mobil (XOM) as its top power pick in 2020. It is tough to think of many companies that have suffered a lot more in 2020. It lagged the abysmal 33 % 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 year of pandemic theme park closures, the stock gained almost twenty %. Which could explain exactly why Disney is actually the sole 2020 BofA pick to land on its main list for 2021, too.