It’s that time of year again, the time when all the top firms that we cover here at 24/7 Wall St. start to make their prognostications and stock picks for 2019. This not only gives investors a bit of a head start on year-end portfolio reshuffling, but it also gives them a look at what the overall macro thoughts for the coming year are at the big brokerages and banks.
Given the extreme selling we have witnessed this year, many investors remain nervous and may be reluctant to buy shares now. However, the big ubiquitous trends like data, networking and infrastructure analytics are not going away. In a new report, Deutsche Bank has seven top alpha picks for 2019. Here we focus on four of the largest, best-known of those companies. Of course, they are rated Buy at Deutsche Bank.
This top mega-cap technology company recently reported an outstanding quarter. Cisco Systems Inc. (NASDAQ: CSCO) designs, manufactures and sells internet protocol (IP) based networking products and services related to the communications and information technology industry worldwide.
It provides switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, wireless access points and servers, as well as next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice and video applications.
Cisco posted solid numbers in November, and the stock has acted well all year long. Toss in the continuation of a massive $25 billion share buyback plan, and investors should be well rewarded going forward. Deutsche Bank said this about the company:
Cisco is a fundamentally underappreciated Mega Cap Tech stock, with potential upside to conservative consensus expectations driven in Fiscal year 2019+ mainly by Enterprise and Cloud Infra Platforms product cycle refresh (Campus Networking, 100/400G Cloud Switch Router upgrades, 5G and Fiber Broadband, etc). In addition to the Cyclical Growth drivers, we highlight Secular Growth trends in Multi Cloud and Edge Cloud, SD WAN, Meraki Cloud Management, Next Gen Security, Application and Infra Analytics, Industrial Internet, etc.
Cisco shareholders receive a 2.97% dividend. The Deutsche Bank target price for the stock is $60, and the Wall Street consensus target is $52.46. The shares closed Tuesday’s trading at $44.06 apiece.
This was a huge player in the fiber build-outs in the 1990s and may be ready to ramp back up for new deployments. Corning Inc. (NYSE: GLW) is one of the world’s leading innovators in materials science. For more than 160 years, Corning has applied its unparalleled expertise in specialty glass, ceramics and optical physics.
Its products enable diverse industries such as consumer electronics, telecommunications, transportation and life sciences. They include damage-resistant cover glass for smartphones and tablets; precision glass for advanced displays; optical fiber, wireless technologies and connectivity solutions for high-speed communications networks; trusted products that accelerate drug discovery and manufacturing; and emissions-control products for cars, trucks and off-road vehicles.
The Deutsche Bank report noted these positive items:
We assert our conviction on improving fundamentals for Corning, as the growth story in Optical Fiber rollouts for 5G Broadband and Cloud Data Centers, Specialty Materials, and Environmental starts picking up heading into fiscal year 2019+. Displays fundamentals are likely to directionally pickup as well, as we get into a strong holiday season for 4K TVs and the purchasing trend towards larger screen TVs. Auto Glass (The company likely ramping into +20 OEMs; +50 platforms to date) and Pharma Glass are the 2 primary exogenous growth drivers in the model – potential upside catalysts for fiscal year 2020 and beyond.
Corning investors receive a 2.25% dividend. Deutsche Bank has a $38 price target, and the consensus target is $36.59. The shares closed at $30.65 on Tuesday.