The week of October 4, 2019, proved to be yet another one full of volatility. The Dow Jones industrials were down at one point more than 1,000 over three trading sessions, but a snapback rally was seen on Thursday and Friday to help out the week. Earnings season is still not quite here, and investors are trying to figure out just how they want to be positioned ahead of U.S./China trade talks and the coming election. Despite the volatility and slower growth, the Dow, S&P 500 and Nasdaq were all handily higher, with double-digit percentage gains year to date.

Treasury yields are also very low, with the 10-year yield barely hanging on to 1.50% and the 30-year to 2.0%. Now that the fourth quarter of 2019 is here, savvy investors are looking beyond the noise of today for the undervalued or underappreciated themes for 2020.

24/7 Wall St. reviews dozens of analyst research reports each day of the week to find new ideas for traders and long-term investors alike. It turns out to be hundreds of analyst calls in any given week. Some of the daily analyst calls cover stocks to buy, while others cover stocks to sell or avoid. Reviewing these for a pattern or for groups revealed that the week of October 4 had multiple analyst calls advising investors and traders to buy certain mega-cap and blue-chip stocks. These are generally expected to be high leaders in the Dow or S&P 500, and all have a market capitalization of more than $100 billion.

Before just following the herd, investors should use analyst research reports only as a starting place or as one portion before making any investment decision. This also comes with a warning that chasing bullish analyst calls during broad sell-offs can be quite painful. Most Buy/Outperform analyst calls at this stage of the 10-year-plus bull market come with an implied total return (upside to targets plus dividends) projections of 8% to 10%.

Here are six blue-chip picks (technically seven stocks) from Wall Street analysts that received very favorable analyst coverage with above-consensus upside projections in the past week. Consensus estimates and price target data come from Refinitiv.

Apple

Apple Inc. (NASDAQ: AAPL) received multiple calls during the first week of October, with firms pointing to higher demand and production for the new iPhone 11. Wedbush has been the most frequent bull, with multiple reasons Apple is rated as Outperform and has a $245 target price.

Apple shares were up at $224.75 in midday trading on Friday, compared with $218.82 on the prior Friday, despite what had been a 1,000 mid-week drop in the Dow. Citigroup also maintained its Buy rating with a $250 target price, even after warning that Apple’s sales might disappoint due to a slower global growth story and tariffs hurting its demand ahead.

AT&T

AT&T Inc. (NYSE: T) lived up to being a defensive stock in the past week, as the Dow sold off about 1,000 points at one point and AT&T was at $37.30 late on Friday, compared with $37.43 the prior week. Nomura Instinet reiterated its Buy rating and its $43 price target. The firm noted that third-quarter results should be more positive and supportive of the stock, while AT&T’s reticence to match Verizon’s price cut implies confidence in wireless while it also has activist pressure.

AT&T has a consensus target price of $36.36 and a dividend yield of 5.5%.

Comcast

Citigroup reiterated Comcast Corp. (NASDAQ: CMCSA) as a Buy and raised the price target to $56 from $50 this week. In the prior week, Pivotal Research reiterated its Buy rating and raised its target to $56 from $54, while Benchmark started Comcast with a Buy rating and set a super-high $64 target price.

Comcast had closed up one-cent at $44.06 a share on Thursday, but it was trading up over 1% at $44.70 late on Friday. Comcast’s consensus target price was $50.30 ahead of the Citigroup call.

Costco Wholesale Corp. (NASDAQ: COST) shares were up 1.3% at $289.00 ahead of earnings on Thursday, but despite being down initially on less robust sales, the stock traded up 0.7% at $291.00 late on Friday. Multiple firms raised their target prices on the continued belief that Costco’s higher-income base customers can handle the slower economy and that the big-box retailer can survive and thrive in the Amazon/Walmart-run retail economy.

Merrill Lynch reiterated its Buy rating and raised its price objective to $320 from $310. BMO Capital Markets reiterated its Outperform rating and raised its target to $320 from $275, and RBC Capital Markets reiterated its Outperform rating and raised its target to $329 from $321. Costco’s consensus target price was $292 ahead of these target hikes.

Here are how two of the already-bullish calls were looking ahead of earnings: JPMorgan had an Overweight rating with a $330 target, and UBS had a Buy rating with a $335 target.

PepsiCo

PepsiCo Inc. (NYSE: PEP) managed to closed up 3% at $137.93 a share on Thursday after earnings, and it rose another 1% to $139.40 during Friday’s trading session. With a 52-week range of $104.53 to $139.75 and a prior consensus target price of $136.00, PepsiCo saw multiple target hikes after its report.

Merrill Lynch reiterated its Buy rating with a $142 price objective. While Citigroup only maintained its Neutral rating, it still lifted its target price to $143 from $139 in the call. Morgan Stanley had the big-bull call, reiterating its Overweight rating and raising its target to $154 from $149. CFRA reiterated its Buy rating and raised its target to $150 from $145.

UTC/Raytheon

United Technologies Corp. (NYSE: UTX) is set to merge with Raytheon Co. (NYSE: RTN). While some already view this merger positively, and with UTC being more than twice the size of Raytheon, Credit Suisse issued a very positive view on both stocks. The firm gave UTC a new Outperform rating and assigned a $164 target price. Raytheon was started as Outperform with a $230 target price in the same call. Its share price was $193.00 late on Friday.

UTC was at $133.79 ahead of the October 3 analyst call, but the sell-off in the market acted as a load and the 1.2% pop late on Friday still had shares at $132.87. This implies more than 25% upside, if you add in the 2.2% dividend yield, and the call is about $9 higher than the consensus price target.

Here is the post-merger summary, adding up the parts: Pratt & Whitney’s wave of deliveries is laying a foundation for long-term growth. Collins Aerospace is well positioned for aftermarket upside. Carrier is seeing more excitement after a product refresh. Otis is seen with a sustainable margin profile that has growth under peers. And the new earnings estimates are $8.84 EPS for 2020 and $9.92 EPS for 2021.

The mega-cap and blue chip picks from the prior week included AbbVie, Apple, Comcast, Danaher, Disney and Kimberly-Clark. Also worth a looking, here were the 11 big dividend hikes from September that were just too large to ignore.

Friday’s (October 4) top analyst upgrades and downgrades included Ambarella, Apple, Comcast, Costco, CSX, Domino’s, Dish Network, Etsy, HP, 3M, Nike, PepsiCo, Snap and many more. Full ticker list: AMBA, AAPL, CMCSA, CLR, COST, CSX, DISH, DPZ, DOVA, SATS, ETSY, FIVE, HPQ, PODD, JHG, MMM, NKE, PEP, SNAP, TNDM, VMW.

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