Investment bank UBS recently rolled out a slew of stocks the firm says are its best ideas in 2024. The firm’s analysts say these companies are attractively valued and have the chops to withstand a bumpy macro environment. CNBC Pro combed through UBS research to find stocks that are must-owns with 2024 underway. They include Target, Teck Resources , General Motors, Dell and CrowdStrike. Dell Dell shares are too cheap to ignore, according to analyst David Vogt, who named the stock his top pick for 2024 in a recent note. The stock has more than doubled over the last 12 months, but it has plenty more room to run, he wrote. Vogt said he likes “companies with idiosyncratic opportunities with undemanding valuations,” and this includes Dell. In particular, the analyst said Dell has several tools in its arsenal that will lift shares higher in the months ahead, including buybacks and improving end markets. Burgeoning growth and buybacks should “drive outperformance,” Vogt said. He acknowledged that the IT spending market remains mixed at best, but Dell still offers the best risk/reward. “In other words, we believe shares of Dell offer the best combination of self-help initiatives, a cyclical recovery in both end-markets, underpriced AI optionality heading into 2025 against an undemanding valuation,” Vogt added. Teck Resources UBS recently initiated coverage of the Canadian metals and mining company. The firm promptly named Teck Resources a top pick for 2024. “We are bullish Teck owing to what we see as a compelling medium term copper growth profile, that is both capital efficient and relatively low geopolitical risk,” analyst Curt Woodworth wrote. The firm said one of the reasons for its thesis is the company’s Chilean copper mining project known as Quebrada Blanca Phase 2 , or QB2. The project should allow the company to dramatically increase its copper production, the firm said. “The capital cost escalation at QB2 is now behind Teck and while the asset has experienced ramp up challenges, we expect material improvement in execution in 1H-24, ” he wrote. Woodworth also sees 2024 as a free-cash flow inflection point for Teck, with the completion of the sale of the company’s steelmaking coal business . “We view the exit of the coal business as a major positive for TECK, allowing investors to have a pure play base metal growth story with a best in class balance sheet supportive of a healthy, long run capital return profile,” Woodworth said. Shares are down nearly 9% this year. Target Analyst Michael Lasser and his team are pounding the table on big-box retailer Target. “For Target, we estimate that sales and profits will improve this year,” he said. Lasser called Target a “stand out” in an environment that’s likely going to be tough. “We think it offers optionality from sales recovering faster than expected, margins scaling higher than expected, or share buybacks being greater than expected,” he added. In addition, Lasser said that evidence is emerging that “shrink is nearing an inflection point,” which should be a positive driver for the stocks of several retailers, including Target. “From here, we think the stock still has a favorable upside skew,” he said. Shares are down 3% this year. CrowdStrike “We are reiterating our Buy rating and increasing our PT to $300, and view that CRWD as still one of the best positioned stocks in cyber. … CRWD should benefit from PC shipments that are expected to grow 5% again, lapping a year of headcount reductions in the tech and financial verticals, and a stabilizing competitive environment … We see CRWD as one the best fundamental stories heading into CY24.” Dell “Dell as end mkt recovery & share repo should drive outperformance. In 2024, we believe stock selection should be focused on companies with idiosyncratic opportunities with undemanding valuations. In other words, we believe shares of Dell offer the best combination of self-help initiatives, a cyclical recovery in both end-markets, underpriced AI optionality heading into 2025 against an undemanding valuation. … Above trend growth and buybacks should drive outperformance.” Target “Our conclusion is that over time, shrink should be a positive driver for the stocks of several retailers. … For Target, we estimate that sales and profits will improve this year. … From here, we think the stock still has a favorable upside skew. We think it offers optionality from sales recovering faster than expected, margins scaling higher than expected, or share buybacks being greater than expected.” Teck Resources “We are bullish Teck owing to what we see as a compelling medium term copper growth profile, that is both capital efficient & relatively low geopol risk. … The capital cost escalation at QB2 is now behind Teck & while the asset has experienced ramp up challenges, we expect material improvement in execution in 1H-24. … We view the exit of the coal business as a major positive for TECK, allowing investors to have pure play base metal growth story with best-in-class balance sheet supportive of a healthy, long run capital return profile.” General Motors “GM sticking with their strategy but investors appear unwilling to give them the benefit of the doubt. So proof points on cost-out/margins and greater transparency on getting EV to MSD % [mid single digits] margin (as a lot seems to come from production tax credits and greenhouse gas credits) critical. As market gets more comfortable in greater capital rationality, stock could re-rate from current lows.”
Sumber: www.cnbc.com
