Many reflections need to be considered as 2020 fades away and 2021 approaches. The COVID-19 pandemic’s deaths and illnesses are the top story, without question. Then there are the deep and painful recession and unemployment concerns, as well as the endless business closures. The bull market was ravaged into the fastest bear market in history. Somehow, someway, the stock market has managed to crawl back to all-time highs. Many investors missed the ride, and now it is time to consider what to expect from the markets in 2021.
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24/7 Wall St. reviews many key analyst calls each weekday to find new ideas for traders and investors alike. Every December and the start of a new year bring an interesting view from analysts and economists looking to the coming year.
Credit Suisse has updated its “#1 Top Picks” list for December. Effectively, this is each analyst’s top picks from their individual coverage universes. Here we offer a brief note on each pick, and we have included recent trading history and used the Refinitiv consensus analyst target price for context.
This list included seven new companies, which means these are the newest top picks for 2021. Credit Suisse noted that every U.S. research analyst has identified a top stock pick based on a six-month to 12-month time horizon.
Remember that no single analyst call should ever be used as the sole basis to buy or sell a stock. They should be considered among other reports, as well as fundamental and technical analysis, before any decisions are made. Don’t forget that the stock market is basically at all-time highs.
ChampionX Corp. (NYSE: CHX) stock traded down 4% on Wednesday to $13.25, in a 52-week range of $2.89 to $34.80. Analysts have a consensus price target of $15.91 for the stock.
ChampionX may be less known to many investors, but it is Credit Suisse’s preferred defensive small/midsize oilfield services pick. The company was described as having a high-quality portfolio with favorable costs and also having revenue growth opportunities despite a weak services outlook for peers.
Credit Suisse also mentioned that the company is considered to be more defensive from a product perspective and that should drive better performance over the next 12 months against peers.
Cheniere Energy Inc. (NYSEARCA: LNG) stock traded down 1.7% to $60.15. It has a 52-week range of $27.06 to $67.11 and a consensus price target of $68.86.
This is still the only pure-play export story stock in the liquefied natural gas (LNG) market with operating assets. Credit Suisse sees limited shale production growth exposure and a differentiated business model helping to meet at improving LNG macro environment.
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The firm also noted Cheniere’s recent optimizations bringing additional capacity without the capital spending. The firm expects that Cheniere likely will generate nearly $12 billion in cash flow over the next five years. While much of that cash flow will go toward reducing leverage, the remainder is likely to be used for buybacks or dividends.
Marriott Vacations Worldwide Corp. (NYSE: VAC) stock was down 0.5%, at $138.21 in a 52-week range of $30.10 to $157.67. The consensus price target is $129.81.
Marriott Vacation is considered to be one of the most compelling names in the sector, with its multiple angles of growth. Credit Suisse sees improving trends in markets like Hawaii and Orlando, higher than expected cost savings and material upside to 2022 estimates. The firm even sees above $900 million in earnings before interest, taxes, depreciation, and amortization compared with the 2022 consensus of $740 million, based on the company’s own initiatives and based on the economy reopening.
24/7 Wall St.Monster Beverage Corp. (NASDAQ: MNST) stock recently traded relatively flat at $88.18. It has a 52-week range of $50.06 to $88.89 and a consensus price target of $93.31.
This is considered to be a bit of COVID-19-recovery play, as roughly 70% of its sales are in convenience stores. This has been affected by the lack of population mobility, and Credit Suisse indicated that its shares have lagged the consumer staples and the broader S&P 500 moves. The firm sees it set up for a banner 2021, as a retooled retail execution team will help drive share gains along with a robust innovation pipeline ahead.
The firm also noted that Monster likely will benefit from the disruption caused by the PepsiCo-Bang disagreement, and it sees the international energy drinks market bring additional growth and profit opportunity.
Sunrun Inc. (NASDAQ: RUN) stock was down 1.4% to $60.47, in a 52-week range of $7.84 to $82.42. The consensus price target is $65.25.
Credit Suisse considers Sunrun to be the largest residential solar developer, and it sees profitable growth metrics beyond the pandemic in 2021. Its Vivint Solar acquisition and organic market growth come at the same time as a lower cost of capital, and the company is expected to continue to hold the highest market share.
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TJX Companies Inc. (NYSE: TJX) stock was trading up 1.6% to $66.45, with a 52-week range of $32.72 to $66.76. Analysts have a consensus price target of $70.92.
While TJX has managed to come all the way back to all-time highs, it has been a bumpy ride, as the reopenings have not been equal around the country. Credit Suisse sees it as the best positioned within comparisons for same-store sales, as off-price versus department stores should offer great value to consumers.
The firm referred back to 2009 and 2010, noting that off-price retailers gained nine full percentage points of market share from department stores because consumers were looking for deeper values even as the economy improved.
Credit Suisse expects that TJX will emerge as much more competitive, with accelerating margins and stronger earnings before interest and taxes margins, while competing department stores continue to close.
Viper Energy Partners L.P. (NASDAQ: VNOM) stock was relatively flat at $12.64, in a 52-week range of $4.98 to $26.83. The consensus analyst target is $14.14.
This is Credit Suisse’s top pick in the oil and gas royalty group. The firm sees a top mineral position that is focused on lower oil costs in the United States, along with manageable leverage. Viper’s recent guidance also looks reasonable, and its recent share buyback announcement is supported by an elevated cash flow yield.
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