10 Defensive Stock Ideas From Bank Of America

Outperform Ideas:

• Walt Disney Co DIS will outperform based on a "strong" Studio performance, accelerating activity in Parks, improving capital returns, and improving advertising environment, and strong Consumer Products.
• Extra Space Storage, Inc. EXR will continue benefiting from market share gains, third party management contracts and acquisition opportunities.
• Eli Lilly and Co 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 MCD's "relatively defensive" profile and three-plus percent dividend yield support is "appealing."
• Reynolds American, Inc. RAI should continue to benefit from the "steady" and "solid" fundamentals in the US 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.
• Rayteon Company RTN continues to be the "most diverse" of all the major defense contractors and remains "relatively insulated" from global macroeconomic weaknesses.
• Verisk Analytics, Inc. 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. 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.