Bank of America’s top 10 US stocks: Q3 2024 recommendations

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:

1. 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.
2. Elanco Animal Health Inc. (ELAN) – Analyst Michael Ryskin sees Elanco’s innovation pipeline as a significant catalyst that should positively impact the stock.
3. General Electric Co. (GE) – Analyst Ronald J. Epstein believes GE is well-positioned to benefit from sustained growth in the commercial aerospace sector.
4. 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.
5. 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.
6. 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.
7. Spotify Technology S.A. (SPOT) – Jessica Reif Ehrlich notes that Spotify is at an inflection point, with recent share price performance indicating strong momentum.
8. 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.
9. 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:

1. 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.

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