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Apple, JPMorgan Among Top Picks On New List From UBS

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Analysts at UBS published a list of their highest conviction calls among all of the firm's analysts across North America. Here is a sample of some of the names that are ranked as the firm's "highest conviction Buy-rated investment ideas in North America today."

Allergan

Allergan plc Ordinary Shares (NYSE: AGN)'s base business of around $14.6 billion in 2016 is projected to grow by a mid- to high single-digit rate to around $20.9 billion in 2021. Of particular note, the Botox franchise is projected to grow at an 8-percent compounded annual growth rate over the same time period.

Also, Allergan is on track to release at least one new chemical entity with the potential of up to $1 billion in peak sales every year over the next few years.

Apple

The bullish case for Apple Inc. (NASDAQ: AAPL)'s stock can be made through its superior augmented reality offering. But continued growth in other products like the Watch, AirPods and services will also add another element to the growth story.

Sales of iPhone units will likely grow by a double-digit unit in fiscal 2018 and by a single-digit in the following year. But as the iPhone matures investors will move on to "appreciate the size and loyalty of the installed base."

Related Link: 4 Stocks Apple's New iPhone Launch Is Most Positive For

Dollar Tree

Dollar Tree, Inc. (NASDAQ: DLTR) will continue showing investors progress in synergies it promised investors through its acquisition of Family Dollar. Of particular note, the company expects to achieve a $300 million run-rate in synergies by the end of the first three years post-acquisition.

In addition, the dollar store retailer is expected to generate an 80-basis-point improvement in operating margin in fiscal 2017 and 90 basis points in the following year.

Google/Alphabet

Google and its parent company Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) remain in good position to maintain a mid- to high-teens revenue growth over at least the coming three years. While Google's revenue mix will likely result in below-consensus margins after 2018 expectations, margins for Google ex-Enterprise will remain stable or even rise.

Overall, continued growth in mobile search and YouTube can sustain Alphabet's core Google operations and the company will achieve a "balance" between innovation/"Other Bets" and shareholder expectations.

Halliburton

Halliburton Company (NYSE: HAL)'s margins in the North American business will likely return to its prior 18 to 20 percent level amid a modest rig count scenario, substantial cost-cutting initiatives and pricing improvements.

Contrary to what many investors believe, Halliburton doesn't need to oversee a large-scale M&A deal to remain competitive. There is also no need to enter subsea or equipment to remain competitive although smaller scale M&A deals to enhance its product lines in specific areas such as production chemicals would be appreciated.

JPMorgan

JPMorgan Chase & Co. (NYSE: JPM)'s momentum across multiple business segments will likely continue over the years. The Wall Street giant is expected to "walk the walk" toward a mid-teen return on tangible common equity and hit a 15 percent rate in 2019.

Beyond a strong ROTCE, the bank can outperform its 55 percent long-term efficiency ratio target as there is a "bias towards JPM outperforming" a 54 percent efficiency ratio in 2019.

United Continental

United Continental Holdings Inc (NYSE: UAL) may have suffered a setback in third quarter revenue per available seat mile, but there is no reason to think that underlying supply or demand trends have changed much. As such, RASM trends will likely stabilize if not bounce back over time.

Looking forward, the airline stands to benefit from margin expansion from a better domestic mix of business, improving operational reliability, improving trans-Pacific supply-demand.

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Latest Ratings for AAPL

DateFirmActionFromTo
Aug 2018Bank of AmericaMaintainsBuyBuy
Aug 2018CitigroupMaintainsBuyBuy
Aug 2018Canaccord GenuityMaintainsBuyBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

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