In a recent report by Bank of America, analysts have released their top US stock recommendations for the third quarter of 2024.
The list includes nine buy-rated stocks and one underperform-rated stock, providing investors with insights into potential opportunities and risks in the current market environment.
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Here is the list of Bank of America’s top 10 stocks for Q3 2024:
Top Buy-Rated Stocks:
- AutoNation Inc. (AN) – Analyst John Murphy highlights AutoNation as a key beneficiary of the improving new vehicle sales cycle. Murphy expects pent-up demand to drive strong cash flow, which the company plans to reinvest in accretive share buybacks.
- Elanco Animal Health Inc. (ELAN) – Analyst Michael Ryskin sees Elanco’s innovation pipeline as a significant catalyst that should positively impact the stock.
- General Electric Co. (GE) – Analyst Ronald J. Epstein believes GE is well-positioned to benefit from sustained growth in the commercial aerospace sector.
- Global Payments Inc. (GPN) – Jason Kupferberg anticipates sequential improvement in merchant margins in the latter half of the year, driven by EVO cost synergies and enhanced free cash flow conversion.
- The Goldman Sachs Group Inc. (GS) – Ebrahim H. Poonawala points to a favourable risk/reward ratio for Goldman Sachs, given the expected cyclical rebound in investment banking activities.
- Palantir Technologies Inc. (PLTR) – Mariana Perez Mora emphasises Palantir’s early-stage network effect and the potential for accelerated partnerships as more users join the platform.
- Spotify Technology S.A. (SPOT) – Jessica Reif Ehrlich notes that Spotify is at an inflection point, with recent share price performance indicating strong momentum.
- Union Pacific Corp. (UNP) – The company plans to boost core pricing to counteract the effects of high inflation, aiming to enhance operating ratios, according to Analyst Ken Hoexter.
- Vertiv Holdings Co. (VRT) – Andrew Obin cites the adoption of AI chips, which are expected to drive strong demand for both existing and new thermal products, benefiting Vertiv.
Underperform-Rated Stock:
- CarMax Inc. (KMX) – John Murphy also highlights CarMax as an underperformer due to ongoing challenges in the sourcing environment for used cars, particularly late-model vehicles. Murphy expects these issues to persist through 2025, potentially hindering same-store unit growth.
These Bank of America’s top 10 US stock recommendations offer investors a diverse array of potential stocks to invest in, from technology and healthcare to transportation and financial services, reflecting the stock analysis outlook on market trends and company-specific factors for the coming quarter.
