Bank of America (BAC) this week unveiled the best stocks of its for next year with the 11 S&P 500 sectors. But the bank could wish its picks do much better than they did in 2020.
The $250 billion bank highlighted stocks it thinks will outperform in all the sectors. 3 of BofA’s 11 picks, consumer staples Walmart (WMT), materials firm Vale (VALE) and utility NextEra Energy (NEE) are today beating both the S&P 500 and the sectors of theirs this season, says an Investor’s Business Daily analysis of data 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 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. however, it’s also thirty five percentage points behind the Industrial Select Sector SPDR’s (XLI) nine % 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,” according to the report. Those themes are value stocks over growth, little stocks over big ones, cyclical stocks more than protective plus 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 favorite stocks. But 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 think will get 10 % or even more in 2021.
Highest hopes are actually for Chevron. Analysts feel the energy stock will be worth 101.90 in 12 months. If perhaps that is accurate, that would be almost 16 % implied upside.
BofA, in the report of its, heralded Chevron’s size placing it in position to win whether investors rotate back into value stocks. Additionally, they applauded the company’s healthy cash flow. Right after losing an estimated $4.7 billion in 2020, analysts think Chevron will make $4.4 billion in 2021. What should you know before buying Chevron stock?
Allstate is yet another stock that S&P 500 analysts agree with BofA on. Analysts believe the stock, which dropped almost six % this year, is going to rally nearly twelve % in the next 12 months. BofA holds the organization out for the high ESG score of its and excellent. Street analysts also think Allstate’s profit 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 45
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 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 general Year For BofA’s Picks It’s easy to understand investors may be skeptical of BofA’s picks. The bank mostly whiffed this year. But to the credit of its, it issued the own mea culpa of its and published its misses.
In reality, all eleven of BofA’s foremost stock picks of 2020 lagged their sectors. And some by a great deal. In a season where technology shot the lights out, BofA’s pick in the industry was dog Intel (INTC), which dropped sixteen % in 2020. That means it lagged the Technology Select Sector SPDR (XLK) by a hard 56 percentage points, once the sector ETF shot up forty %. Much better to stay with the best stocks, in case you want to earn a living.
BofA also chose Exxon Mobil (XOM) as its main power pick in 2020. It’s tough to think of many organizations that have suffered 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 sole Bank of America Stock | Fintech Zoom
pick for 2020 to defeat the S&P 500 is Disney (DIS). In a season of pandemic theme park closures, the stock gained nearly 20 %. And this could explain the reason why Disney is the sole 2020 BofA pick to land on the top list of its for 2021, too.