Bank of America (BAC) this week unveiled its best stocks for next year with the eleven S&P 500 sectors. But the bank may well 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. Three of BofA’s eleven picks, consumer staples Walmart (WMT), materials solid Vale (VALE) and utility NextEra Energy (NEE) are already beating the S&P 500 and the sectors of theirs this season, 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 rest, 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 26 % this season. That means the stock of its this year trails the S&P 500’s 15.6 % gain by a whopping forty one percentage points. But it is in addition 35 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 year ahead,” based on the report. Those themes are value stocks over growth, small stocks more than big ones, cyclical stocks more than defensive additionally ESG.
SPDR Sector ETFs: Intraday % Chg.
Supplied by Nasdaq Last Sale.
Real-time quote as well as trade rates are certainly not sourced from all marketplaces.
Analysts Agree With 3 BofA S&P 500 Picks Wall Street analysts do not share BofA’s bullishness on nearly all of the favored stocks of its. however, they do agree on 3 of them.
Energy firm Chevron (CVX), financial Allstate (ALL) and real estate Realty Income (O) are actually the sole S&P 500 stocks that BofA’s analysts think will get 10 % or perhaps more in 2021.
Highest hopes are actually for Chevron. Analysts think the big energy stock is going to be worth 101.90 in twelve months. If that’s correct, which would be almost 16 % implied upside.
BofA, in the report of its, heralded Chevron’s size placing it in spot to win whether investors rotate back into worth stocks. They also applauded the company’s stable cash flow. After losing an estimated $4.7 billion in 2020, analysts believe Chevron will make $4.4 billion in 2021. What should you know before buying Chevron stock?
Allstate is an additional stock that S&P 500 analysts agree with BofA on. Analysts believe the stock, which dropped almost 6 % this year, will rally almost 12 % in the next twelve months. BofA holds the business out for the high ESG score of its and quality which 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 63
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 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 clear investors could be skeptical of BofA’s picks. The bank mostly whiffed this year. But to its credit, it issued the own mea culpa of its and published its misses.
In fact, all eleven of BofA’s best stock picks of 2020 lagged their sectors. And lots of by a great deal. In a year where technology shot the lights out, BofA’s pick 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 brutal fifty six percentage points, when the sector ETF shot up forty %. Much better to stick with leading stocks, if you would like to earn a living.
BofA even chose Exxon Mobil (XOM) as its top power pick in 2020. It’s tough to think of many organizations 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, too.
Meanwhile, the only 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 gained nearly 20 %. Which may explain why Disney is the only 2020 BofA pick to land on the top list of its for 2021, also.