The holidays are behind us. All the traders and Wall Street professionals are back at the trading desk, after a dreadful 2022. We saw an almost 20% loss for the S&P 500 last year and a massive 33% loss for the Nasdaq composite index. Many investors remain worried about the path forward, and with good reason. Given the massive spike in inflation last year, the Federal Reserve’s hand was forced, and the federal funds rate was raised from literally 0% this time last year to the current 4.25% to 4.50%.
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While most of the heavy lifting appears to be over, as evidenced by a drop in the December increase to 50 basis points from 75, it is a good bet that we can see three additional 25-basis-point hikes this year, with the first coming at the end of January/February Fed meeting, as the Fed moves closer to the expected terminal rate of 5.00% to 5.25%.

Given the potential for continued volatility in the first half of this year, it may make sense to take a long look at the best ideas from the top brokerage firms on Wall Street. In a new research report, BofA Securities is among the first out with its top trading ideas for the first quarter of 2023. Earlier this week we also had a look at the firm’s top picks for 2023.

The BofA Team has nine stocks to buy and one expected to underperform. The long ideas look like outstanding stock picks for growth investors, as they are the firm’s highest conviction short-term ideas for the first quarter. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Chart Industries

While somewhat off the radar, this top idea has huge upside potential to the BofA target price. Chart Industries Inc. (NYSE: GTLS) manufactures and sells engineered equipment for energy and other industries worldwide.

The company provides bulk and packaged gas cryogenic solutions for the storage, distribution, vaporization and application of industrial gases; cryogenic trailers, ISO containers, bulk storage tanks, loading facilities and regasification equipment for delivering liquefied natural gas (LNG) into virtual pipeline applications; and large vacuum insulated storage tanks as equipment for purchasers of standard liquefaction plants.

Chart Industries also offers process technology, liquefaction train and critical equipment for the LNG, including small to mid-scale facilities, floating LNG applications and large base-load export facilities; brazed aluminum, Core-in-Kettle, heat exchangers, cold boxes, air-cooled heat exchangers, pressure vessel, and pipe works; and air-cooled heat exchangers and axial cooling fans for power, heating, ventilation, air conditioning and refining applications.

In addition, it provides highly engineered equipment that is used in specialty end-market applications for hydrogen, LNG, biogas, CO2 Capture, food and beverage, aerospace, lasers, cannabis and water treatment; and cryogenic components, including vacuum insulated pipes, specialty liquid nitrogen, end-use equipment and cryogenic flow meters.

The BofA Securities price target is $190, and the consensus target is even higher at $205.60. The stock ended Wednesday trading at $119.19 a share.

This stock has backed up nicely and is offering investors the best entry point since back in the fall. Domino’s Pizza Inc. (NYSE: DPZ) is the number one pizza delivery company in the world. As of January 2, 2022, the company operated approximately 18,800 stores in 90 markets.
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Domino’s has benefited from a steadily growing online/digital ordering mix that currently represents over 50% of domestic orders and has a long runway for growth. Since 2008, more than 80% of the menu offerings are new or significantly revised.

Top Wall Street analysts have cited sustainable drivers that include the company’s strong, consistent price-value relationship; improving franchise unit economics, due, in part, to the proven strategy of “fortressing” markets; and growing scale and digital sophistication.

Domino’s Pizza stock investors receive a dividend of 1.27%. BofA Securities has a $448 price objective, while the consensus target is just $383.45. Wednesday’s closing share price of $344.39 was up over 5% for the day.

Emerson Electric

This Dividend Aristocrat stock has raised its payout year for over 25 years and is offering a stellar entry point. Emerson Electric Co. (NYSE: EMR) is a global technology and engineering company providing innovative solutions for customers in industrial, commercial and residential markets.

The company’s Automation Solutions business helps process, hybrid and discrete manufacturers maximize production, protect personnel and the environment while optimizing their energy and operating costs. The Commercial & Residential Solutions business helps ensure human comfort and health, protect food quality and safety, advance energy efficiency and create a sustainable infrastructure.

Shareholders receive a 2.17% dividend. BofA Securities has set a $120 price target on Emerson Electric stock, which was last seen on Wednesday trading at $95.42 a share.

Goldman Sachs

This industry-leading giant is a premier stock in the sector for those looking to add financials. Goldman Sachs Group Inc. (NYSE: GS) has a gigantic institutional equity, debt and derivatives business, an ultra-high net worth clientele, top investment banking and capital markets expertise, and the firm continues to be a dominant force around the world in the world of finance.

Its Investment Banking segment provides financial advisory services, including strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings and spin-offs; middle-market lending, relationship lending and acquisition financing; as well as transaction banking services.

This segment also offers underwriting services, such as equity underwriting for common and preferred stock and convertible and exchangeable securities, and debt underwriting for various types of debt instruments, including investment-grade and high-yield debt, bank and bridge loans and emerging- and growth-market debt.
The Global Markets segment is involved in client execution activities for cash and derivative instruments; credit products; mortgages; currencies; commodities; and equities; and provision of equity intermediation and equity financing services. It also offers clearing, settlement and custody services.

Goldman Sachs stock comes with a 2.91% dividend. The $384 BofA Securities target price is less than the $395.24 consensus target, but shares closed on Wednesday at $347.70.
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Humana

Earnings are expected to continue to grow as the U.S. population is aging and this company is a big player in Medicare plans. Humana Inc. (NYSE: HUM) engages in the provision of health insurance services.

Its Retail segment consists of products sold on a retail basis to individuals, including medical and supplemental benefit plans such as Medicare and state-based Medicaid contracts. The Group and Specialty segment contains employer group fully insured commercial medical products and specialty health insurance benefits marketed to individuals and groups, including dental, vision, military services and other supplemental health and voluntary insurance benefits.

The Healthcare Services segment offers services such as pharmacy solutions, provider services, clinical care, predictive modeling and informatics services to other Humana businesses, as well as external health plan members, external health plans and other employers.

The dividend yield here is 0.62%. The $640 target price at BofA Securities compares with the $619.95 consensus target for Humana stock. The final trade on Wednesday was reported at $492.12.

NVR

This is another off-the-radar idea, and one that may be a little pricey for many investors. NVR Inc. (NYSE: NVR) engages in the construction and sale of single-family detached homes, townhomes and condominium buildings in the United States.

NVR markets its Ryan Homes products to first-time and first-time move-up buyers, and its NVHomes and Heartland Homes products to move-up and luxury buyers. It also provides various mortgage-related services to its homebuilding customers, as well as brokers title insurance. It performs title searches in connection with mortgage loan closings and sells mortgage loans to investors in the secondary markets on a servicing-released basis.

NVR primarily operates in Maryland, Virginia, West Virginia, Delaware, New Jersey, Pennsylvania, New York, Ohio, Indiana, Illinois, North Carolina, South Carolina, Florida, Tennessee and the District of Columbia.

BofA Securities has a $4,900 price target on NVR stock. The $4,964 consensus target also compares with Wednesday’s close was at $4,674.22.

The company offers a very solid dividend as well as a host of recognizable products. Procter & Gamble Co. (NYSE: PG) is one of the world’s largest consumer products companies and one of the oldest in the Fortune 500. Its many brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn.
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The company sells its products through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, baby stores, specialty beauty stores, high-frequency stores and pharmacies. The company has been very innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors with years of steady growth and dividends.

Shareholders receive a 2.41% dividend. The BofA Securities target price of $170 is greater than the $148.60 consensus target. Procter & Gamble stock closed on Thursday at $152.23.

Southwestern Energy

This stock has backed up and could be ready to run higher. Southwestern Energy Co. (NYSE: SWN) an independent energy company engaged in the exploration, development and production of natural gas, oil and natural gas liquids (NGLs) in the United States. The company focuses on the development of unconventional natural gas and oil reservoirs located in Pennsylvania, West Virginia, Ohio and Louisiana.

As of December 31, 2021, it had approximately 768,050 net acres in Appalachia; a total of 1,527 wells on production; and approximately proved natural gas, oil and NGLs reserves comprising 21,148 billion cubic feet of natural gas equivalent.

Southwestern Energy also engages in the marketing and transportation of natural gas, oil and NGLs. The company serves LNG exporters, energy companies, utilities and industrial purchasers of natural gas.

The BofA Securities price target is $15, and the consensus target is $10.50. Southwestern Energy stock closed on Wednesday at $5.73, a solid 4% gain on the day.

Tapestry

This retail idea offers some serious total return upside potential as a contrarian play. Tapestry Inc. (NYSE: TPR) provides luxury accessories and branded lifestyle products in the United States, Japan, China and elsewhere. The company operates in three segments: Coach, Kate Spade and Stuart Weitzman.
Tapestry offers women’s accessories, including handbags, such as wallets, money pieces, wristlets and cosmetic cases; novelty accessories comprising address books, time management and travel accessories, sketchbooks and portfolios; and key rings and charms.
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It also provides bag collections, including business cases, computer bags, messenger-style bags, backpacks, and totes; small leather goods, such as wallets, card cases, travel organizers and belts; and footwear, watches, fragrances, sunglasses, novelty accessories and ready-to-wear for men. In addition, it offers women’s footwear; sunglasses; bracelets, necklaces, rings and earrings; fragrances and watches; women’s seasonal lifestyle apparel collections, including outerwear and ready-to-wear; and cold weather accessories, which comprise gloves, scarves and hats.

Further, the company provides footwear items, housewares and home accessories for kids, such as fashion bedding and tableware, as well as stationery and gifts. It licenses rights to market and distribute its tech and soft accessories, jewelry, watches, eyewear and fragrances under the Coach brand, and tableware and housewares, fashion beddings, tech accessories, watches, sleepwear, eyewear, stationery and gifts and fragrances under the Kate Spade brand.

As of July 2, 2022, the company operated through a network of 945 Coach stores, 398 Kate Spade stores and 100 Stuart Weitzman stores. It sells its products through e-commerce sites, concession shop-in-shops and wholesale customers, as well as through independent third-party distributors.

Tapestry stock has a $45 price target at BofA Securities. The consensus target of $43.87 is a bit closer to Wednesday’s close at $39.65.

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Whirlpool Corp. (NYSE: WHR) is the stock that the analysts rate as Underperform. It has had a strong run over the past few years. Investors who are more aggressive may want to consider this idea as a possible short-sale candidate for 2023.

These are nine top long ideas for investors looking for stocks that could deliver in the first quarter, and one potential short for more aggressive investors. We will track the progress on these picks and provide updates on their performance. With fourth-quarter earnings reports right around the corner, it may make sense to buy partial positions and see how the results come in for these top companies.

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