5 BofA Securities Large-Cap Defensive Portfolio Stocks to Buy Before Earnings

Investing

Published: April 19, 2021 7:51 am

After a massive run since March of 2020, stocks are starting to look a little tired, even though most across Wall Street expect earnings for this quarter and the rest of the year to be very good. Many strategists and economists also expect the gross domestic product numbers for 2021 to come in as high as 7%. While the most recent AAII investor sentiment readings show bullishness, it makes sense to start to consider some portfolio caution as May approaches.
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BofA Securities made some recent changes to its Large Cap Defensive portfolio, so we decided to screen the stocks, looking for those that make sense for the rest of 2021. The following five look like good ideas in front of earnings reports and for the reopening theme.

All are rated Buy at BofA Securities, but it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Comcast

This top media and entertainment company remains a Wall Street favorite, and it is on the BofA Securities US 1 list. Comcast Corp. (NASDAQ: CMCSA) is the largest U.S. provider of cable services, with over 22 million basic and nearly 27 million broadband subscribers. Through its acquisition of Sky, Comcast now has direct customer relationships with 53 million subscribers has a foothold in the European market in addition to its U.S. operations.

Comcast owns NBCU (including the NBC TV networks, Telemundo, MSNBC, USA, SyFy, Bravo, E!, CNBC), Universal Films and Universal Theme Parks. The company has invested in technology to build an advanced network that delivers among the fastest broadband speeds, and it brings customers personalized video, communications and home management offerings.

Shareholders receive a 1.85% dividend. The BofA Securities price target for the shares is $65, while the Wall Street consensus target is $61.12. Comcast stock closed trading on Friday at $55.11 a share.

Costco

This has become the ultimate destination for the American consumer regardless of the economy. Costco Wholesale Corp. (NASDAQ: COST) has a unique business model. It operates membership warehouses and it buys the majority of its merchandise directly from manufacturers, essentially cutting out the middleman. Costco sells in bulk but also at a lower price, thus fueling its rapid growth. With consumers having more free cash to spend as gasoline prices have dropped, this major retailer may continue to see large revenue gains.

Costco remains one of the few conventional retailers where metrics like store traffic, market share gains and a validated model could bode well for international growth and expansion. The company is largely unharmed by e-commerce, and it continues to add stores in strategically mapped out locations.

Wall Street loves the company’s pricing authority on key items and the leading merchandising offerings, and the relatively new Costco co-branded card with Visa is a real positive. Add in the company’s growing online presence and the future looks bright.

Shareholders receive a 0.85% dividend. BofA Securities has a $415 price target, and the consensus target is $387.50. Costco stock closed at $370.72 on Friday.