According to Bank of America, investors looking for somewhere to put their money in the new year may want to consider these top stock picks. The bank outlined 11 of its favorite names for 2023 in a note sent to customers on Wednesday. Don’t be surprised if challenges persist into the new year as the Federal Reserve raises interest rates, inflation persists and recession fears intensify. However, some names may be better positioned to ride out the volatility, according to the Wall Street firm. Savita Subramanian, head of US equity and quants, writes: “It is our common view that 2023 could be a story of two halves – recession and recovery – equities. There may be different prices in these two periods and we note the beneficiaries of the recession and recovery below.” strategy. As uncertainty lingers, here are some names Bank of America recommends: A secret pick is Analog Devices, a semiconductor stock that has sold off about 7% in 2022. Bank of America considers a stock coupons are the beneficiaries of labor automation, trading at a 20% discount to the rest of the industry. The consensus price target for the stock also implies a near 20% gain from Tuesday’s closing price. Another name to buy in 2023 is healthcare stock Humana, which outperforms in 2022 as investors flock to safe-haven sectors. Shares are up more than 10%, and analysts expect that to continue as the recession looms. The bank also recommends buying shares in the first quarter. Energy posted record gains in 2022 as oil prices rose, ending in positive territory while other S&P 500 sectors faltered. One of the dominant companies is Exxon Mobil. Shares are up 80%, and Bank of America expects more upside on the back of an attractive 3.4% dividend yield, strong cash flow and high beta. Shares of insurer Arch Capital Group have risen more than 41 percent last year, but Bank of America expects the stock to benefit from reduced interest rate volatility in the new year. According to Bank of America, with the possibility of an economic downturn, Walmart will also benefit from consumers switching to cheaper products. Tractor Supply is another stock the investment banker is betting on in 2023. The stock shows the company’s solid balance sheet, domestic focus and dividend growth potential, among other factors. another factor. – Michael Bloom of CNBC contributed reporting
