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10 Defensive Stock Ideas From Bank Of America

10 Defensive Stock Ideas From Bank Of America

  • As the third quarter comes to an end, Bank of America's Derek Harris offered his top 10 investment ideas for the fourth quarter.
  • Harris' list will now be published at the beginning of each quarter.
  • The list consists of eight Buy recommendations and two Underperform recommendations across six sectors.
  • Bank of America's strategist Derek Harris released a list of his top 10 investment ideas for the fourth quarter. The list consists of eight Outperform recommendations and two Underperform recommendations across six sectors.

    Outperform Ideas

  • Walt Disney Co (NYSE: DIS) will outperform based on a "strong" studio performance, accelerating activity in parks, improving capital returns, improving advertising environment and strong consumer products.
  • Extra Space Storage, Inc. (NYSE: EXR) will continue benefiting from market share gains, third party management contracts and acquisition opportunities.
  • Related Link: Looking For A Defensive Stock Without Global Exposure? Check Out Autozone

  • Eli Lilly and Co (NYSE: LLY)'s pipeline remains "significantly underappreciated" with a "catalyst rich" 12–18 months ahead. Accordingly, investors will look to build positions head of the "compelling event path" while taking advantage of the stock's "highly attractive" valuations.
  • McDonald's Corporation (NYSE: MCD)'s "relatively defensive" profile and 3+ plus percent dividend yield support is "appealing."
  • Reynolds American, Inc. (NYSE: RAI) should continue to benefit from the "steady" and "solid" fundamentals in the U.S. category given the "improving wallets" for the low end consumers. Moreover, the company faces potential revenue enhancements following the first full quarter of the Newport ownership.
  • Raytheon Company (NYSE: RTN) continues to be the "most diverse" of all the major defense contractors and remains "relatively insulated" from global macroeconomic weaknesses.
  • Verisk Analytics, Inc. (NASDAQ: VRSK) is the largest provider of risk vetting products and services to the P&C industry. The company has also made acquisitions to enter the healthcare, financial services and energy segments – all of which offer "significant" growth potential.
  • Wal-Mart Stores, Inc. (NYSE: WMT)'s initiatives could yield a same-store sales growth above an expected 1.2 percent due to strong performance in higher margin categories. In addition, the retailer should benefit from the "healthier backdrop" for the low- to middle-income consumers.
  • Underperform Names

  • Best Buy Co Inc (NYSE: BBY) faces yet another "uncertain" competitive environment during the upcoming holiday season. Meanwhile, the Street is modeling fourth quarter comps of +0.9 percent, and there is a chance the market may ultimately be "disappointed."
  • Southern Co (NYSE: SO) faces a potential regulatory risk for cost approvals at its over budget Kemper clean coal facility. The uncomplete project (three times over budget) could come in focus in the state's (Mississippi) upcoming elections.
  • Image Credit: Public Domain

    Latest Ratings for DIS

    Apr 2021Truist SecuritiesMaintainsBuy
    Feb 2021CitigroupMaintainsBuy
    Feb 2021Argus ResearchMaintainsBuy

    View More Analyst Ratings for DIS
    View the Latest Analyst Ratings


    Related Articles (DIS + EXR)

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    Posted-In: Bank of America Defensive Stocks Derek Harris Investment StrategiesAnalyst Color Long Ideas Analyst Ratings Trading Ideas Best of Benzinga

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