Top Line
With markets stirred by inflation, rising interest rates and concerns over Russia’s invasion of Ukraine, analysts at one of Wall Street’s biggest firms still see opportunities despite rising volatility, according to a list of the top stocks. Revealing the “perfect storm of headwinds” to help investors weather.”
Citi analysts say that even in a down market, stocks with strong earnings growth are still good bets.
Richard Drew/The Associated Press
important facts
Investors face a challenging environment in which inflation and its effects on supply chains “remain stubborn”, while Russia’s invasion of Ukraine has raised commodity prices such as oil, which has only exacerbated the situation. Scott Kronert, Citi’s managing director and US equity strategist, said in a recent note.
Citi strategists still see light at the end of the tunnel, identifying several stock picks with strong earnings growth expectations in sectors such as financial, retail, consumer goods and technology that they think have massive upside potential.
Citi’s favorite large-cap pick is legacy automaker General Motors: While many analysts are bullish about the company’s expansion into electric vehicles, shares have fallen nearly 28% this year amid a broader market sell-off.
The firm still predicts a rebound, however, with a $100 per share price target on GM’s stock — a potential increase of about 130% from the current price of about $44 per share.
Citi analysts also like financial services stocks like One Main Holdings, which they think can rally more than 100%, as well as investment bank Raymond James (up more than 30%) and broker-dealer LPL Financial (up more than 30%). above 50%).
Other top stock picks from Citi that the firm thinks can rally at least 30% from current levels include solar company Enphase Energy, entertainment giant Walt Disney, plastics maker Berry Global, travel company Trip Advisor and auto parts provider. Advanced auto parts included.
What to look for:
Despite the “adverse storm” in the markets today, Citi expects some of those pressures to ease by the end of this year. Analysts anticipate that the recent surge in commodity prices should eventually subside, which should help with inflationary pressures. The Federal Reserve forecasts seven rate hikes in 2022, meanwhile, next year should GDP growth be “sluggish but sustainable”.
tangent line:
With rising inflation and geopolitical uncertainty from Russia’s invasion of Ukraine dragging markets down this year, experts are now warning that inflation rates—high inflation and slowing economic growth—are under threat. Jefferies analysts said in a recent note that it is time to buy companies with high dividend yields and strong cash flows to combat inflation. Home Depot.
Further reading:
Stocks jump as investors prepare for big Fed rate hike to fight inflationForbes,
History shows that investors who buy during bear markets will see huge gains (Forbes,
Analysts Reveal Their Top Stock Picks to Beat Stagflation and Outperform Choppy MarketsForbes,
The Federal Reserve’s long-awaited rate hike is here: Powell announces a 0.25% hike (Forbes,