Bank of America (BAC) this week unveiled its top stocks for following year with the 11 S&P 500 sectors. But the bank may well wish its picks do better than they did in 2020.
The $250 billion bank highlighted stocks it thinks will outperform in all the sectors. 3 of BofA’s eleven 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 data from S&P Global Market Intelligence and MarketSmith. Vale carries a strong 95 IBD Composite Rating.
The majority, though, are laggards. BofA appears to be betting 2021 is a year for left-behind stocks to get up. Airline Alaska Air (ALK) is down twenty six % this year. That means its stock this year 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) nine % gain this year. BofA didn’t select a 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 worth stocks over growth, little stocks over huge ones, cyclical stocks more than defensive plus ESG.
SPDR Sector ETFs: Intraday % Chg.
Provided by Nasdaq Last Sale.
Real-time quote and/or trade rates are not sourced from all markets.
Analysts Agree With Three BofA S&P 500 Picks Wall Street analysts do not share BofA’s bullishness on most of the favored stocks of its. But they do agree on 3 of them.
Energy firm Chevron (CVX), financial Allstate (ALL) and real estate Realty Income (O) are the only S&P 500 stocks that BofA’s analysts believe will gain 10 % or even more in 2021.
Highest hopes are actually for Chevron. Analysts feel the big energy stock is going to be well worth 101.90 in twelve months. If perhaps that’s accurate, which would be nearly 16 % implied upside.
BofA, in the report of its, heralded Chevron’s size putting it in spot to win whether investors rotate back to value stocks. They also applauded the company’s stable money flow. Right after losing an estimated $4.7 billion in 2020, analysts think Chevron will make $4.4 billion in 2021. What must 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 almost 6 % this season, is going to rally nearly 12 % in the next 12 months. BofA holds the company out for its high ESG score and quality that is high. Street analysts also believe Allstate’s profit 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 45
Walmart (WMT) 22.9% 9.7% Consumer Staples 57
Chevron (CVX) -26.8% 15.6% Energy fourteen
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 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 An approximate Year For BofA’s Picks It’s easy to understand investors may be suspicious of BofA’s picks. The bank largely whiffed this year. But to the credit of its, it issued the own mea culpa of its and published its misses.
In reality, all 11 of BofA’s best stock picks of 2020 lagged the sectors of theirs. And many by a great deal. In a season where technology shot the lights out, BofA’s pick in the sector was dog Intel (INTC), which dropped 16 % in 2020. Which implies it lagged the Technology Select Sector SPDR (XLK) by a brutal 56 percentage points, as soon as the sector ETF shot up 40 %. Far better to stick with top stocks, in case you would like to make a profit.
BofA even chose Exxon Mobil (XOM) as its top power pick in 2020. It’s tough to think of many businesses that have suffered far 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, also.
Meanwhile, the only Bank of America Stock | Fintech Zoom
pick for 2020 to defeat the S&P 500 is actually Disney (DIS). In a season of pandemic theme park closures, the stock gained roughly twenty %. And this could explain the reason why Disney is the single 2020 BofA pick to land on the main list of its for 2021, too.