Citi has updated its ideas with the highest conviction for the next 12 months as the market enters a new phase of volatility. The S&P 500 is up about 2.8% in 2023 through Thursday afternoon after briefly turning negative during Wednesday’s year-to-date trading session. Meanwhile, the Dow is down 2.9% while the tech-heavy Nasdaq is up 11% year-to-date. Fears of a widespread banking crisis following the collapse of Silicon Valley Bank have spooked investors. Financial sector stocks, particularly regional banks, have taken a sharp tumble in recent trading sessions. Market turmoil continued after Credit Suisse’s largest investor announced it would not provide additional funds to the troubled bank. Since then, it has received $54 billion in support from the Swiss National Bank. Citi highlighted several equity strategies for the coming months and added four new buy stocks to its focus list: Targa Resources, Bruker, Criteo and Comerica. Midstream energy company Targa Resources is the only natural resource company on Citi’s focus list. “We see TRGP as the fastest growing large-cap midstream stock,” said analyst Spiro Dounis. He added that “strong cash flow generation allows TRGP to fund growth, de-leverage and repay capital” while the stock “trades at a discount to large-cap peers.” Dounis set a price target of $95 per share, up 39.4% from Wednesday’s close. Shares of the natural gas company are down 6.9% year-to-date but are up 4.2% over the trailing 12 months. Citi has included several technology and communications stocks on its list: T-Mobile, Liberty SiriusXM, Criteo, and Fortinet. Analyst Ygal Arounian is bullish on online advertising company Criteo, seeing its shift in the mix into commercial and retail media as an attractive opportunity. “Retail/Commerce Media has a big one [total addressable market] (~$500 billion) and is expected to see an increase in digital advertising money in the wallet. We believe Criteo’s leadership position in retail media and its current valuation here offers an attractive risk/reward trade-off,” wrote Arounian. Citi has a price target of $44 on the stock, up nearly 44% from the previous close. To be safe, Arounian also said the stock is a high-risk name and that it’s vulnerable to a downturn in the broader advertising market, and that competition within the digital ads sector has attracted a lot of competition in the ad-tech market, causing pressure on revenue rates and growth,” he said. Bio-research tools maker Bruker is another new name on the list. “We see BRKR as one of the cleanest setups in the tools space this year, driven by its growing backlog (~9 months), order book visibility and H1 weighted guidance,” said analyst Patrick Donnelly. “It has a historically large backlog and a more limited cancellation rate,” Donnelly continued, adding that the company has a “ has a strong track record of organic growth”. The stock is up about 7% in 2023 and more than 10% over the past 12 months. Despite recent concerns about financial stocks, analyst Keith Horowitz is bullish on Comerica stocks. “For investors with constructive economic prospects, including higher short-term interest rates, we see CMA as one of the best regional banks as they are the biggest potential beneficiaries of higher short-term interest rates as well as improved commercial loan growth,” Horowitz said. “We see a way to improve [return on tangible common equity]Horowitz sees shares doubling from Thursday’s close and sets his price target at $90. Comerica shares are up almost 7% on Thursday afternoon. But the stock is still down more than 28% year-to-date amid recent declines in regional bank stocks CMA 5D Mountain Comerica stock – CNBC’s Michael Bloom contributed to this report.
Source : www.cnbc.com