Bank of America (BAC) this week unveiled its best stocks for following year with the eleven S&P 500 sectors. But the bank may hope its picks 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 eleven picks, consumer staples Walmart (WMT), materials solid Vale (VALE) as well as energy NextEra Energy (NEE) are already beating 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 95 IBD Composite Rating.
The majority, though, are laggards. BofA seems to be betting 2021 is a season for left-behind stocks to catch up. Airline Alaska Air (ALK) is down twenty six % this year. That means the stock of its this season trails the S&P 500’s 15.6 % gain by a whopping 41 percentage points. Though it’s in addition thirty five percentage points behind the Industrial Select Sector SPDR’s (XLI) 9 % gain this season. BofA did not 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 worth stocks over growth, small stocks over large ones, cyclical stocks over defensive additionally ESG.
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Analysts Agree With 3 BofA S&P 500 Picks Wall Street analysts do not share BofA’s bullishness on most of its favored stocks. however, 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 suppose will gain ten % or perhaps much more in 2021.
Highest hopes are for Chevron. Analysts believe that the energy stock will be worth 101.90 in 12 months. If that is accurate, that would be almost 16 % implied upside.
BofA, in its report, heralded Chevron’s size putting it in place to win if investors rotate back to worth stocks. Additionally, they applauded the company’s healthy money flow. Right after losing an estimated $4.7 billion in 2020, analysts assume Chevron will make $4.4 billion in 2021. What must you know before you buy Chevron stock?
Allstate is yet another stock that S&P 500 analysts agree with BofA on. Analysts believe the stock, which dropped almost 6 % this season, is going to rally nearly twelve % in the following twelve months. BofA holds the business out for its high ESG score as well as 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 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 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 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 understandable investors may be suspicious of BofA’s picks. The bank largely whiffed this season. But to the credit of its, it issued its own mea culpa and published its misses.
The truth is, all eleven of BofA’s top stock picks of 2020 lagged the sectors of theirs. And a number of 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 16 % in 2020. That would mean that it lagged the Technology Select Sector SPDR (XLK) by a hard fifty six percentage points, as soon as the sector ETF shot up forty %. A lot preferable to stay with top stocks, in case you want to earn a living.
BofA even chose Exxon Mobil (XOM) as its top energy pick in 2020. It’s difficult to think of many companies that have suffered far more in 2020. It lagged the abysmal 33 % 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 only Bank of America Stock | Fintech Zoom
pick for 2020 to conquer the S&P 500 is Disney (DIS). In a year of pandemic theme park closures, the stock gained almost twenty %. And that might explain exactly why Disney is the only 2020 BofA pick to land on the main list of its for 2021, also.