BofA Securities Makes Some Very Surprising Changes to US 1 List of Top Picks

Investing

Published: April 24, 2020 7:18 am

With earnings for the first quarter coming in hot and heavy, and the second quarter of 2020 well underway, many of the top companies we follow on Wall Street are making some changes to the lists of their high-conviction stock picks for clients. With the market displaying historically high volatility, it makes sense for the major firms to examine the lists and make some changes, as the rest of the year could add additional volatility, as the political and geopolitical cycle could prove to be very explosive components, in addition to the ongoing remarkable coronavirus issues.

In a recent research note, the analysts at BofA Securities make a big move by removing Walt Disney Co. (NYSE: DIS) from the firm’s well-respected US 1 list of stocks to buy. While keeping a Buy rating on the stock, and a $123 price target, the closure of the theme parks, declining advertising and a host of other issues probably all contributed to the removal. The consensus price objective across Wall Street for the entertainment giant is $129.29. The last Disney stock trade on Thursday came in at $100.90 a share.

In addition, the US 1 team also announced that Salesforce.com Inc. (NYSE: CRM) is being maintained on the list for a new 12-month term. Salesforce offers enterprise cloud computing applications and platform services, including Sales Cloud, which enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.

BofA Securities has a $180 price objective for Salesforce.com stock. That compares with the higher consensus target of $195.45 and Thursday’s close at $151.72.

We also screened the current US 1 list stocks looking for companies that are solid choices for long-term growth accounts looking to put some capital to work. Three look especially intriguing now.

Bristol-Myers

This is the only large-cap pharmaceutical on the US 1 list of top stock picks. Bristol-Myers Squibb Co. (NYSE: BMY) is a global pharmaceutical company focused on discovering, developing, licensing and marketing chemically synthesized drugs or small molecules and biologics in various therapeutic areas, including virology comprising human immunodeficiency virus infection (HIV), oncology, neuroscience, immunoscience and cardiovascular.

Bristol-Myers reported strong fourth-quarter results that were largely ahead of Wall Street consensus estimates, given the recognition of revenue from Celgene, which the company bought last year in a massive $74 billion acquisition. Bristol-Myers is expected to report first-quarter results on April 30.

Shareholders receive a solid 2.94% dividend. The BofA Securities price target is $75, while the consensus target is $70.45. Bristol-Myers stock closed trading on Thursday at $60.94.