Bank of America (BAC) this week unveiled the best stocks of its for next year among the eleven S&P 500 sectors. But the bank might hope the picks of its do 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 firm Vale (VALE) and utility NextEra Energy (NEE) are already beating both the S&P 500 and the sectors of theirs this year, states an Investor’s Business Daily analysis of facts from S&P Global Market Intelligence and MarketSmith. Vale carries a strong 95 IBD Composite Rating.
The majority, 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 twenty six % this year. Which means the stock of its this season trails the S&P 500’s 15.6 % gain by a whopping 41 percentage points. But it’s also 35 percentage points behind the Industrial Select Sector SPDR’s (XLI) nine % gain this year. BofA did not choose a big cap technology-related S&P 500 stock.
“These stocks align with themes in our 2021 year ahead,” according to the report. Those themes are worth stocks over growth, little stocks over big ones, cyclical stocks over defensive plus ESG.
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Analysts Agree With 3 BofA S&P 500 Picks Wall Street analysts don’t 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) along with real estate Realty Income (O) are the only S&P 500 stocks that BofA’s analysts believe will get 10 % or perhaps more in 2021.
Highest hopes are actually for Chevron. Analysts think the big energy stock will be worth 101.90 in twelve months. If perhaps that is accurate, that would be nearly 16 % implied upside.
BofA, in the report of its, heralded Chevron’s size placing it in place to win whether investors rotate back to worth stocks. They also applauded the company’s healthy money flow. After losing an estimated $4.7 billion in 2020, analysts assume Chevron will make $4.4 billion in 2021. What should you know before you buy Chevron stock?
Allstate is an additional stock that S&P 500 analysts agree with BofA on. Analysts believe the stock, which dropped nearly six % this year, will rally almost 12 % in the next 12 months. BofA holds the company out for the high ESG score of its and high quality. Street analysts also think Allstate’s benefit per share will jump 19 % 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 45
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 general Year For BofA’s Picks It is clear investors may be suspicious of BofA’s picks. The bank mostly whiffed this year. But to its credit, it issued its own mea culpa and released its misses.
The truth is, all eleven of BofA’s top stock picks of 2020 lagged their sectors. And some by a great deal. 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 means that it lagged the Technology Select Sector SPDR (XLK) by a brutal 56 percentage points, when the sector ETF shot up 40 %. A lot better to stick with top stocks, if you wish to make a profit.
BofA also chose Exxon Mobil (XOM) as the main power pick of its in 2020. It is difficult to think of many organizations that have suffered a lot more in 2020. It lagged the abysmal thirty three % drop in the Energy Select Sector SPDR (XLE) by 4 percentage points. And it suffered the indignity of getting tossed out of the Dow Jones Industrial Average, also.
Meanwhile, the sole Bank of America Stock | Fintech Zoom
pick for 2020 to beat the S&P 500 is actually Disney (DIS). In a year of pandemic theme park closures, the stock acquired roughly twenty %. And this may explain the reason why Disney is actually the single 2020 BofA pick to land on the main list of its for 2021, also.