Despite the stock market’s strong start in 2023, the Federal Reserve continues to raise interest rates as part of its continuous fight against inflation. Investors are more confident than ever before that the Fed can steer the U.S. economy toward a gentle landing, but the forecast for 2023’s economy is still unclear. Investors may reduce risk in these uncertain times by utilizing the power of diversity. A list of varied, elite American stock choices is kept up to date by the Bank of America research team.
The most prominent software firm in the world, Microsoft, is renowned for its operating system, Office software product lineup, and Azure cloud services organization. According to analyst Brad Sills, the third fiscal quarter is expected to see Microsoft’s current sales growth decelerate bottom out, which notes that macroeconomic factors rather than Microsoft-specific problems account for most of the company’s challenges. As Azure usage increases, he forecasts sales growth from just 5% in 2023 to double-digit percentages in 2024 and 2025. The stock of Microsoft gets a “buy” grade and a $300 price target from Bank of America.
Starbucks is the top international seller of premium coffee goods. The power of the Starbucks corporation is unmatched worldwide, according to analyst Sara Senatore, including in China. As seen by a 29% decline in China’s same-store revenue in the fiscal first quarter, that nation has been complex for Starbucks in prior quarters. Senatore claims that China’s restoration should help Starbucks increase its margins in the second half of 2023. However, an easing of curfews in China helped January sales climb sequentially. SBUX stock now has a “buy” rating and a $138 price target from Bank of America.
By combining the entertainment, sports, and news divisions of WarnerMedia with the programming material of Discovery, Warner Bros. Discovery was created in 2022. Another best-performing stock on our list this year thus far is WBD, with a share price increase of 61.7% as of February 7. According to analyst Jessica Reif Ehrlich, the story around Warner Bros. is getting better, and the company has a good risk-reward profile right now. In addition, according to Reif, WBD stock will benefit from the spring debut of a new direct-to-consumer streaming service. WBD stock now has a “buy” rating and a $21 price target from Bank of America.
For customers in the life sciences, pharmaceutical, and industrial sectors, Thermo Fisher Scientific develops, manufactures, and offers sophisticated services for analytical equipment.
Thermo Fisher’s solid 2022 momentum has continued into 2023, according to analyst Derik de Bruin, as the business posted 14% core revenue growth in the fourth quarter, removing COVID-19 test revenues. He claims that thanks to operating margins that are currently 1.5% higher than they were in fiscal 2019, Thermo Fisher is better off after the epidemic than before it began. TMO stock now has a “buy” rating and a $650 price target from Bank of America.
One of the top producers of non-alcoholic beverages is Coca-Cola. The enticing 2.9% dividend paid by the company is the biggest on this list. Because of its scale, protected earnings power, balanced, defendable organic sales growth, and pricing leverage, according to analyst Bryan Spillane, Coca-Cola should trade at a premium to comparable beverage companies in terms of value. Unfortunately, Coca-Cola will experience challenges in 2023, such as challenging year-over-year comparisons and sluggish European consumer demand. Spillane claims that despite the difficult climate, Coca-Cola may still be able to improve its profitability this year since it’s “not a layup.” The stock of K.O. is given a “buy” rating and a $74 price target by Bank of America.
A global internet broker is Interactive Brokers. According to analyst Craig Siegenthaler, the financial sector’s most enticing growth story is Interactive Brokers. He claims that the business caters to a broad spectrum of clients, including individual retail investors, brokers, and hedge funds, with diverse product offerings. Additionally, more than 70% of the business’s customers are located outside the United States, enabling Interactive Brokers to introduce products more quickly and keep operating margins above 60% while undercutting American rivals. IBKR stock currently has a “buy” rating and a $130 price target from Bank of America.
Leading military defense and aerospace manufacturer Northrop Grumman creates cutting-edge military technologies. The worst-performing stock on this list this year is Northrop, whose shares are down 17.1% as of February 7. According to analyst Ronald Epstein, the start of the B-21 Raider aircraft program’s most lucrative phase towards the end of the decade will balance the long-term winding down of older programs with more significant margins. Since Northrop produces high-quality earnings and has long-term contracts that offer superior financial clarity, Epstein advises investors to buy the stock while it is down. The stock of NOC is given a “buy” rating and a $655 price objective by Bank of America.
One of the top providers of oilfield services globally is Schlumberger. Rising energy costs will result in more oil and gas activities in 2022. In the second quarter of 2022, according to analyst Chase Mulvehill, Schlumberger’s overseas revenue growth surged, helping to counteract the slowing increase in U.S. land sales. Schlumberger anticipates foreign sales growth in the high teen percentage range in 2023, excluding Russia. Mulvehill predicts that Schlumberger will benefit from a supportive marketplace. In other words, that will enable it to maintain margin expansion until at least 2025. SLB stock now has a “buy” rating and a $66 price target from Bank of America.
One of the biggest providers of agricultural nutrients, including the nitrogen, phosphate, and potash used in fertilizers, is Nutrien. Due to the disruption of the fertilizer supply caused by the conflict in Ukraine, fertilizer prices reached all-time highs in 2022, enabling Nutrien to declare record profits. According to analyst Steve Byrne, U.S. agricultural demand will rise in 2023 and continue to be high at least through 2024. Byrne also has high hopes for the business’s retail division. He sees further organic volume growth and merger and acquisition opportunities. The stock of NTR is given a “buy” rating and a $111 price objective by Bank of America.
A specialty real estate investment company, or REIT, called SBA Communications manages wireless communication towers worldwide. Due to the company’s more excellent growth prospects, according to analyst David Barden, SBA shares would trade at a higher price than those of other REITs. He also hopes for the company’s concentration on U.S. towers and projects favorable sustainable growth in 2023. Outside the United States, SBA is exposed to faster-growing economies like Brazil, which could boost total growth without losing too many risks. SBAC stock currently has a “buy” rating and a $325 price target from Bank of America.
With millions of consumers in Northern and Central California, PG&E is a California utility. In July 2020, the business declared bankruptcy after being held accountable for two disastrous California wildfires. Even if the firm’s outlook has improved, analyst Julien Dumoulin-Smith claims that PG&E stocks still trade at a significant value disadvantage to utility rivals. PG&E will likely restart its payout in the second quarter of 2023, according to Dumoulin-Smith, who also claims that California authorities have made positive reforms that would reduce the risk of utilities being affected by wildfires. The stock of PCG has a “buy” rating and a $19 price target from Bank of America.
