Citi has named a raft of stocks that it thinks could do well in the second half of 2022, as investors continue to navigate market uncertainty and hot inflation. Stock markets suffered steep losses in the first six months of this year as a sustained sell-off brought big indices to their knees. The S&P 500 endured a staggering swing before closing the first half in the Bear Market Territory, sending the index to its worst first-half performance since 1970. Now that the second half is underway, investors are getting ready for continued unrest as fears of a recession mount. According to Citi, it has focused on stock picking. “While equity market macros are likely to remain in the summer of consideration, stock specific differences will be an important focus,” said City strategists led by Scott Kronart in a June 29 report. “We hope business models will be tested,” they wrote, emphasizing the company’s management ability to navigate an array of issues such as labor and the supply chain. Read more ‘Dividend Aristocrats’: Strategists Name High-Yielding Stocks for a Better Market Wall Street believes these beat-down global stocks are set for a rebound Wall Street banks name their top three global stocks for the second half and – Gives 70% upside Chronert acknowledges the risk of a growing recession and puts the probability of a global recession at 50%. The recession is probably a 2023 event – if it transforms, he said. Meanwhile, decades of high inflation in several economies, including the United States, Europe and parts of Asia, and rising consumer prices are affecting investor sentiment. What should be the position of investors in an environment where stocks can cause high inflation? Pricing, which refers to the ability of a company to raise prices without losing business, gives companies an edge in rising prices. Such companies weather better in an inflationary environment than competitors because they can carry higher costs to customers. Among Citi’s best-rated companies, the most expensive are Estee Lauder, Kellogg’s, Chipotle and Domino’s Pizza, as well as HCA Healthcare in Thermo Fisher Scientific and Healthcare Space. The bank also favors Amazon, Microsoft, Atlassian and CrowdStrike in the technology sector. Many financial stocks, including Allstate Corp, MetLife and Hartford Financial Services, have come up on the screen. Named ‘Highest Suffix’, Citi has also compiled a list of its “highest suffix ideas” – the bank’s top stock picks. These include chemical firm Linde, automotive retailer Autozone, Walmart, electronics maker Jabil, wireless operator T-Mobile, cybersecurity firm Fortinet and biotech firm Apelis Pharmaceuticals. Semiconductor equipment maker Lam Research also topped the list, with the stock enjoying the highest rise in the bank’s price target among the bank’s top stock ideas. The stock closed at around $ 389 in Tuesday’s trading, representing a potential uptick of 85.1% to City’s $ 720 price target.
Pick the best stock for the second half of 2022
