With the holidays behind us, all the traders and Wall Street professionals are back at the trading desk. After a spectacular 2021 when we saw a huge 28.68% gain for the S&P 500 and the 22.21% gain for the Nasdaq, many investors are a little worried about the path forward. Given the spike in inflation, the Federal Reserve’s hand has been forced. After years of the lowest interest rates in history, and ongoing stimulus like the massive quantitative easing, the tide could be ready to turn.
Given the potential for volatility this year, it may make sense to take a long look at the best ideas from the top brokerage firms on Wall Street. BofA Securities is among the first out with their top ideas for the first quarter of 2022. The firm has nine stocks to buy and one that is expected to underperform. We focus on the long ideas, and at first glance, they look like outstanding stock picks for growth investors. However, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This top bank has rallied off its lows but looks poised to move higher in 2022. 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 in North America, Latin America, Asia and elsewhere.
Trading at a still very cheap 8.2 times estimated 2022 earnings, this company looks very reasonable in what remains a volatile stock market and in a sector that has lagged dramatically.
Citigroup stock investors receive a 3.38% dividend. BofA Securities has a $100 price target. The consensus target is just $82.62, and shares closed trading on Tuesday at $63.59.
This huge corporation might be a big beneficiary of an infrastructure build-out. Carrier Global Corp. (NYSE: CARR) provides heating, ventilating and air conditioning (HVAC), as well as refrigeration, fire, security and building automation technologies, worldwide.
The HVAC segment provides products, controls, services and solutions to meet the heating and cooling needs of residential and commercial customers. Its products include air conditioners, heating systems, controls and aftermarket components, as well as aftermarket repair and maintenance services and building automation solutions.
The Refrigeration segment offers transport refrigeration products and services, including refrigeration and monitoring systems for trucks, trailers, shipping containers, intermodal and rail, as well as commercial refrigeration solutions, such as refrigerated cabinets, freezers, systems and controls.
The Fire & Security segment provides various residential and building systems, including fire, flame, gas, smoke and carbon monoxide detection; portable fire extinguishers; fire suppression systems; intruder alarms; access control systems; video management systems; and electronic controls. Its other fire and security service offerings comprise audit, design, installation and system integration, as well as aftermarket maintenance and repair and monitoring services.
Investors receive a 1.12% dividend. The BofA Securities target price on Carrier Global is $70. The lower $59.47 consensus target is closer to Tuesday’s closing share price of $53.82.
This is a good play on agriculture in a world with a growing need for food and construction. CNH Industrial N.V. (NYSE: CNHI) is the world’s second-largest farm equipment company, with a primary listing in the United States and secondary one in Milan. It is also a leading producer of construction equipment, trucks and commercial vehicles, and powertrains.
The company designs, produces, markets, sells and finances agricultural and construction equipment, trucks, commercial vehicles and buses worldwide. It also offers specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for its vehicles.
Shareholders receive a 0.80% dividend. The $21 BofA Securities price target compares with an $18.55 consensus target. CNH Industrial stock closed at $16.57 a share on Tuesday.
This cybersecurity giant’s stock has had a stellar run but still offers solid upside potential. CrowdStrike Holdings Inc. (NASDAQ: CRWD) is a leader in the endpoint protection platform (EPP) market. EPP solutions help protect enterprises’ internet-connected devices from cyberattacks, and there is a market shift from signature-based on-premises solutions to cloud-based platforms that use machine learning.
CrowdStrike’s platform is one of the few 100% cloud-based architectures and is uniquely positioned to displace incumbents with its platform breadth, including advanced detection and remediation capabilities.
Many analysts feel that the company is well positioned for sustainable success in a market in which the share leaders have failed to innovate. Outside of core endpoint security, most expect CrowdStrike can continue to drive strong multi-module adoption, leading to increased stickiness and better long-term positioning.
BofA Securities has set a gigantic price target of $315. The lower consensus target for Crowdstrike stock is $294.31, and shares closed at $189.19 on Tuesday.
This is an off-the-radar idea for those looking for solid consumer staples ideas. Lamb Weston Holdings Inc. (NYSE: LW) produces, distributes and markets value-added frozen potato products worldwide.
The company also offers commercial ingredients and appetizers under the Lamb Weston brand, as well as under various customer labels. The company offers its products under its owned or licensed brands, such as Grown in Idaho and Alexia, and other licensed brands, as well as under retailers’ brands. In addition, it engages in the vegetable and dairy businesses.
The company serves retail and foodservice customers; grocery, mass, club and specialty retailers; and businesses, independent restaurants, regional chain restaurants and convenience stores, as well as educational institutions.
Shareholders are paid a 1.55% dividend. The BofA Securities price target of $80 is higher than the $73.14 consensus target. On Tuesday, Lamb Weston stock closed at $63.30.
This energy company made huge news in 2019 with the purchase of Anadarko Petroleum. Occidental Petroleum Corp. (NYSE: OXY) is an oil-levered multinational organization with principal business segments in oil and gas and chemicals. The oil and gas segment explores for, develops, produces and markets crude oil and natural gas, primarily in the U.S. Permian Basin, Colombia, Bolivia, Libya, Oman, Qatar and Yemen. The chemicals segment manufactures and markets basic chemicals, vinyls and performance chemicals.
The shares have underperformed since the Anadarko acquisition, and the company essentially eliminated its dividend. However, the stock has had a solid rebound over the past year and remains an excellent idea for investors looking to add energy to portfolios in 2022.
The dividend yield is a tiny 0.14%. The BofA Securities target price is $47, and the consensus target is $40.60. Occidental Petroleum stock closed over 7% higher on Tuesday, at $33.38 per share.
Rexford Industrial Realty
This stock could really take off if the economic expansion picks back up in 2022. Rexford Industrial Realty (NYSE: REXR) acquires, redevelops, owns, manages and operates industrial warehouse properties in Southern California infill markets. The company plans to grow its portfolio and earnings through market rent and occupancy growth, and a large pipeline of acquisitions in the same region.
Just this week, the company announced the acquisition of eight industrial properties for an aggregate purchase price of $270 million. The acquisitions were funded using cash on hand and proceeds from forward equity settlements. For the full year 2021, the company acquired $1.9 billion of industrial properties, bringing its total portfolio to 296 properties, comprising approximately 37.1 million square feet within prime infill Southern California “last-mile” submarkets.
Investors receive a 1.18% dividend. The $90 set by BofA Securities compares with an $83.13 consensus target. The last trade for Tuesday was reported at $79.32.
With the NFL playoffs right around the corner, this is a top pick for investors looking to own a solid broadcasting idea. ViacomCBS Inc. (NASDAQ: VIAC) is an American multinational media conglomerate based in New York City. It was formed via the re-merger of CBS and the second incarnation of Viacom on December 4, 2019, the two of which were created from the split of the original Viacom in 2005.
ViacomCBS’s portfolio of brands includes the CBS network, TV production studio, international broadcast networks, MTV, Nickelodeon, Paramount Network, Comedy Central, BET, VH1, TV Land, Showtime, Simon & Schuster, Paramount Pictures and Pluto TV.
ViacomCBS stock comes with a 2.98% dividend. The $53 BofA Securities price target is slightly higher than the consensus target of $51.96. Shares ended Tuesday trading at $33.05 apiece.
Conservative investors looking for ideas will like this dependable dividend-paying utility stock. Xcel Energy Inc. (NASDAQ: XEL) generates, purchases, transmits, distributes and sells electricity.
The company generates electricity through coal, nuclear, natural gas, hydroelectric, solar, biomass, oil, wood/refuse and wind energy sources. It also purchases, transports, distributes and sells natural gas to retail customers, as well as transports customer-owned natural gas.
In addition, the company develops and leases natural gas pipelines, and storage and compression facilities, and it invests in rental housing projects, as well as procures equipment for the construction of renewable generation facilities. It serves residential, commercial and industrial customers in the portions of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. The company sells electricity to approximately 3.7 million customers and natural gas to approximately 2.1 million customers.
Investors receive a 2.69% dividend. The Xcel Energy stock price target at BofA Securities is $75. The consensus target is $71.36, and the closing share price on Tuesday was $68.37.
The stock that analysts rate as Underperform is AutoZone Inc. (NYSE: AZO), which has had a blistering five-year run and looks very rich after being up $1,000 a share over the past 52 weeks. More aggressive investors may want to consider this idea as a possible short sale candidate for 2022.
Nine top long ideas for investors and one potential short for more aggressive investors. We will track the progress on these picks and keep 24/7 Wall St. readers up to date on their performance.
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