BofA Securities Makes Big Summer Changes to US 1 List of Top Stock Picks

By Lee Jackson Published Jun 30, 7:09AM EDT

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BofA Securities Makes Big Summer Changes to US 1 List of Top Stock Picks — © Thomas R Machnitzki / Wikimedia Commons

With the second quarter of 2021 all but over and the latter half of 2021 right around the corner, many of the top companies we follow on Wall Street are making some changes to their lists of high-conviction stock picks for clients. With the market hitting all-time highs recently on all the major indexes, it makes sense to examine the lists as the rest of the year could have some additional volatility, as the political and geopolitical cycle could still prove to be very explosive components.

The analysts at BofA Securities have made some big changes to the firm’s US 1 list of top stock recommendations. One new stock was added, and four that have performed admirably were removed.

While covering the newest addition, which is of course rated Buy, three of the four that were removed still carry a Buy rating, while one was removed from coverage. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Activision Blizzard Inc. (NASDAQ: ATVI) was removed from the list as coverage of it has been suspended for now. Equinix Inc. (NASDAQ: EQIX), Neurocrine Biosciences Inc. (NASDAQ: NBIX) and Union Pacific Corp. (NYSE: UNP) are also removed, but as we noted, the BofA Securities analysts retained their Buy ratings on all three of these top-performing stocks.

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The newest addition to the list is FedEx Corp. (NYSE: FDX | FDX Price Prediction), which provides transportation, e-commerce and business services worldwide. The company’s FedEx Express segment offers express transportation, small-package ground delivery and freight transportation services, as well as time-critical transportation services and cross-border e-commerce technology and e-commerce transportation solutions.

Its FedEx Ground segment provides day-certain delivery services to businesses and residences. The FedEx Freight segment offers less-than-truckload freight transportation services. The FedEx Services segment provides sales, marketing, information technology, communications, customer service, technical support, billing and collection and back-office function services.

The company’s Corporate, Other and Eliminations segment offers integrated supply chain management solutions, specialty transportation, customs brokerage and global ocean and air freight forwarding services. It also offers an array of document and business services and retail access to its customers for its package transportation businesses.

The analysts said this when adding the company to the US 1 roster:

Add FDX to US1, a top transport pick. The company trades at 13.6x our fiscal 2022 earnings-per-share estimate, the low end of its range and 5.1x discount to UPS . We see significant tailwinds, led by pricing gains, margin improvement, continued e-COMM growth, and the return of business-to-business volumes . Set fiscal 2022 target for 13%-18% earnings growth. Shares traded down 4%, in a reaction to higher capex, which should support returns.

Investors receive a 1.02% dividend. The BofA Securities price target is at a whopping $372, while the consensus target is just $345.63. Tuesday’s closing print was $297.89 per share.

One outstanding new company joined the US 1 list, while four stocks were retired but remain solid ideas for more aggressive growth stock investors. With FedEx backing up recently, the current entry point is offering good levels to start buying shares on this industry leader.

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About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.