The clock is ticking on 2016, and what a year it’s been. With the S&P 500 looking like it may be a double-digit winner, as it is currently up over 10%, investors and portfolio managers are turning their eyes to 2017. With the holidays right around the corner, you can expect volumes on Wall Street to grind lower. We also expect capital gains to be more likely taken next year, as many expect the Trump administration to offer some relief in that area, which could push the market higher into January.
A new research report from the outstanding Savita Subramanian and her team at Merrill Lynch presents the firm’s 11 top stocks to buy for 2017. They chose one from each sector that tend to align with the big price themes and quantitative work the analysts have done. All are rated Buy at Merrill Lynch.
The search giant continues to expand and is even working on a driverless car now. Alphabet Inc. (NASDAQ: GOOGL) provides online advertising services in the United States, the United Kingdom and rest of the world. It offers performance and brand advertising services, and it operates through Google and Other Bets segments. The Google segment includes principal internet products, such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome and Google Play, as well as technical infrastructure and newer efforts, such as virtual reality.
The Google segment also sells hardware products, comprising Chromecast, Chromebooks and Nexus. The Other Bets segment includes businesses such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X and other initiatives.
The Merrill Lynch price objective for the stock is $1,025, and the Wall Street consensus target is $966.88. Shares closed Friday at $809.84.
Citizens Financial Group
This is Merrill Lynch’s top financial pick for 2017. Citizens Financial Group Inc. (NYSE: CFG) operates 1,200 branches, primarily throughout 11 states across the New England, Mid-Atlantic and Midwest. It has consolidated total assets of $137 billion, ranking as the 13th largest bank in the United States by assets. It offers a broad range of retail and commercial banking products and services to more than 5 million individuals, institutions and companies.
Shareholders receive a 1.36% dividend. Merrill Lynch has a $38 price objective, and the consensus target is $32.86. Shares closed Friday at $35.40.
This company is expected to have a substantial portion of its total 2016 production in natural gas, and it also resides on the Merrill Lynch US 1 list. Devon Energy Corp. (NYSE: DVN) an independent energy company, primarily engages in the exploration, development and production of oil, natural gas and natural gas liquids (NGLs) in the United States and Canada. It operates approximately 19,000 wells. It also offers midstream energy services, including gathering, transmission, processing, fractionation and marketing to producers of natural gas, NGLs, crude oil and condensates through its natural gas pipelines, plants and treatment facilities.
Devon Energy’s third-quarter results set the tone for a very solid November after the company reported core earnings that were nearly double what Wall Street analysts were expecting. Fueling that result was the company’s continued ability to push down operating costs, which are now 37% below peak rates.
Shareholders receive a 0.5% dividend. The Merrill Lynch price target is $61, and the consensus target is $50.69. Shares ended Friday at $47.02.