Merrill Lynch Out With 11 Top Stock Picks for 2018

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It’s that time of year again, the time when all the top firms that we cover here at 24/7 Wall St. start to make their stock picks and prognostications for 2018. This not only gives investors a bit of a head start on year-end portfolio reshuffling, but it also gives them a look at what the overall macro thoughts for the coming year are at the big brokerages and banks.

After another stellar year for the equity markets, the economy perking up, and the potential for growth the best in years, many investors are interested in the top picks for 2018 as the market has become very expensive. A new report from Merrill Lynch unveils the firm’s top picks for 2018. All are good choices for growth accounts with a degree of risk tolerance, and are investment picks for the full year, as opposed to trading ideas.

Andeavor

This large cap refining play could have big upside for 2018. Andeavor (NYSE: ANDV) is an independent refiner and marketer of petroleum products. The company operates seven refineries concentrated in the Western United States with throughput capacity of 1.1 million barrels per day.

The company’s retail marketing system sells gasoline and diesel fuel through retail stations, as well as through third-party dealers and distributors. This segment operates a network of 2,492 retail stations under the ARCO, Shell, Exxon, Mobil, USA Gasoline, Rebel, Thrifty and Tesoro brands. The company was formerly known as Tesoro and changed its name to Andeavor in August 2017.

Shareholders receive a 2.23% dividend. The Merrill Lynch price target for the stock is $119. The Wall Street consensus price target is $122.94. The shares traded at $104.43 by the end of Friday’s session.

BlackRock

Many on Wall Street love this firm’s growth potential near term and especially long term. BlackRock Inc. (NYSE: BLK) is the largest asset manager in the world, with roughly $4.9 trillion in assets under management. Its acquisitions of Merrill Lynch Investment Management (MLIM) and iShares transformed it from a fixed income manager into a multi-product and multi-channel giant, with roughly 40% of its assets under management overseas. It has leading franchises in exchange traded funds, institutional fixed income, alternatives and cash. It also operates Solutions, a leader in risk analytics.

The company’s strong historical and prospective dividend growth is underpinned by the high-quality and diversified business model. Dividends have increased 18% annually over the past 10 years. Dividend growth likely will moderate but remains solid in the low teens, consistent with expectations for earnings growth in the years ahead.

Shareholders receive a 2% dividend. Merrill Lynch has a $500 price objective, while the consensus price target is $520.92. Shares closed Friday at $502.08.

DowDupont

Some thought the blockbuster merger of Dow and DuPont would run into regulatory headwinds in 2017. But now DowDupont Inc. (NYSE: DWDP) is a diversified chemical company with $73 billion in sales as of 2016.

The company is organized in three principal divisions of Agriculture (20% of EBITDA), Material Science (55%) and Specialty Products (25%), and it intends to separate these into three public entities by 2020.

Shareholders are paid a 2.11% dividend. The $82 Merrill Lynch price objective compares with the consensus price target of $80.19. The stock closed Friday at $71.01 a share.

Equinix

This is one of the larger cap companies in the data center arena, and a top play for more conservative accounts. Equinix Inc. (NASDAQ: EQIX) provides data center services to protect and connect the information assets for the enterprises, financial services companies, and content and network providers primarily in the Americas, Europe, the Middle East, Africa and the Asia-Pacific.

The company provides colocation services and related offerings, including operations space, storage space, cabinets and power for customers colocation needs; interconnection services, comprising physical cross connect/direct interconnections, Equinix Internet Exchange, Equinix Cloud Exchange, Equinix Metro Connect and Internet connectivity services; and managed IT infrastructure services, including installation of customer equipment and cabling, as well as equipment rebooting and power cycling, card swapping and emergency equipment replacement services.

Investors receive a 1.71% distribution. Merrill Lynch has set its target price at $500, which is lower than the $520.17 consensus price objective. The shares ended the week at $469.16.

Idexx Laboratories

This is a top health care play that Merrill Lynch likes for 2018. Idexx Laboratories Inc. (NASDAQ: IDXX) is a leading provider of diagnostic and information technology products and services for pet and production animal health, water quality and milk safety, and human point-of-care diagnostics.

The Merrill Lynch price target is $175. The consensus target is $143, less than Friday’s close of $155.00.