With the first quarter of 2021 almost over, many top firms we follow on Wall Street are making some changes to their lists of high-conviction stock picks for clients. With all the major indexes hitting all-time highs recently, it makes sense to examine these lists. The rest of the year could have additional volatility, as the political and geopolitical cycle still could prove to be very explosive components.
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With fourth-quarter earnings reporting all but over, the analysts at BofA Securities are making some big changes to the firm’s US 1 List of top stock recommendations. One new company, Gartner Inc. (NYSE: IT), was added, and two that have performed admirably have been removed. They are Bristol-Myers Squibb Co. (NYSE: BMY) and Thomson Reuters Corp. (NYSE: TRI), which still retain Buy ratings at BofA Securities.
While covering the newest addition, we also screened the list for companies that pay solid dividends and could benefit from the big rotation we are seeing across Wall Street. We found three additional ideas that make sense for growth investors now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Gartner
This is the newest member of the US 1 list, and it is a very strong idea for investors searching for stocks to buy that are not overcrowded with momentum players. Gartner is a leading global research and advisory firm, helping senior executives in information technology, finance, human resources and other areas make better business decisions.
The company’s Research segment provides subscription research products and associated tools and analytics, and its smaller Events and Consulting segments are extensions of the research offerings that extend the value to clients. Research, Events and Consulting are 81%, 10% and 9% of sales.
BofA Securities has five specific reasons the firm is bullish on the shares now:
- The team expects a strong cyclical resurgence in 2021.
- The company’s commitment to margin expansion is a big positive.
- Rising stock buybacks combined with revenue acceleration and margins should equal 15% earnings-per-share and free-cash-flow growth.
- The analyst feels that if Gartner delivers on these metrics, the company’s valuation can expand to the peer average, which is higher.
- The team also feels that positive estimate revisions are likely in 2021.
The BofA Securities price target for the shares is $220, and the Wall Street consensus target is $215. Gartner stock closed Wednesday’s trading at $184.03 per share.
Citigroup
Shares of this top bank have rallied well off the lows and look poised to move higher in the rest of 2021. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations, governments a broad range of financial products and services.
Citigroup offers services such as consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. It operates and does business in more than 160 countries and jurisdictions.
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