Citi picks best Buy and Sell stocks in all sectors, leaning to quality and momentum

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Citi is looking at a more growth-style stock selection as it screens in all sectors.

“Our base case year end ‘22 price target of 4200 for the S&P 500 (SP500) (NYSEARCA:SPY) is predicated on both a scenario weighted probability approach and 18-19x a $226 full year ’22 top down earnings estimate,” strategist Scott Chronert wrote in a note.

“We project a growing recession probability during 1H ‘23. Over the intermediate term expect volatility between a 3650-4700 range as investors weigh weaker growth versus a potentially less hawkish Fed,” Chronert said.

“There is no change to our view that multiple compression, driven by rising real rates and Fed policy expectations, has mostly run its course,” he said. “Earnings expectations become the more important toggle from here.”

“With this note, we move more toward the Growth-style and further away from our style agnostic call since May. Among factors, we prefer Quality and Momentum over Min/Low Vol and Enhanced Value.”

We “include stock screen for each GICS sector of Citi’s top Buy- and Sell-rated stocks based on expected total return (ETR),” Chronert added. “We include S&P 1500 (SPTM) names to broaden our scope for investors looking for specific alpha opportunities.”

The picks by sector are:

Communications Services (XLC), Citi rates Market Weight

Buys

  • DISH Network (DISH), ETR 96.6%
  • Paramount Global (PARA), 64.9%
  • Telephone and Data Systems (TDS), 64.9%
  • Warner Bros Discovery (WBD), 59.5%
  • Meta Platforms (META), 48.4%
  • Disney (DIS), 44.4%
  • AT&T (T), 37.9%
  • Cogent Communications (CCOI), 37.3%
  • Alphabet (GOOGL), 36%
  • Omnicom (OMC), 29.2%

Sells

  • Gannett (GCI), -20.6%
  • Consolidated Communication (CNSL), -8.6%

Consumer Discretionary (XLY), Underweight

Buys

  • General Motors (GM), 114%
  • MGM Resorts (MGM), 68.5%
  • Boot Barn (BOOT), 68.9%
  • Stride (LRN), 63.3%
  • YETI (YETI), 60.6%
  • Las Vegas Sands (LVS), 46.1%
  • Amazon.com (AMZN), 46.5%
  • Booking Holdings (BKNG), 43.1%
  • Domino’s Pizza (DPZ), 37.2%

Sells

  • Tesla (TSLA), 53.5%
  • Gap (GPS), -22.2%
  • Carter’s (CRI), -11.8%

Consumer Staples (XLP), Market Weight

Buys

  • Simply Good Foods (SMPL), 61.7%
  • BellRing Brands (BRBR), 44.4%
  • Walmart (WMT), 23%
  • Hostess Brands (TWNK), 17.2%

Sells

Energy (XLE), Market Weight

Buys

  • Oceaneering International (OII), 110.1%
  • Baker Hughes (BKR), 67.4%
  • Haliburton (HAL), 64.9%
  • ProPetro Holding (PUMP), 62.4%
  • Patterson-UTI Energy (PTEN), 43.7%
  • APA (APA), 41%
  • ChampionX (CHX), 37.2%
  • Schlumberger (SLB), 27.4%
  • Pioneer Natural (PXD), 13.1%
  • Diamondback Energy (FANG), 12.2%

Financials (XLF), Underweight

Buys

  • Synchrony Financial (SYF), 56.2%
  • Capital One (COF), 55.1%
  • Voya Financial (VOYA), 31.9%
  • Hartford Financial (HIG), 30.2%
  • Comerica (CMA), 22.3%
  • SLM (SLM), 19%
  • Bank of America (BAC), 18.5%
  • MetLife (MET), 18.9%
  • JPMorgan Chase (JPM), 17.9%
  • Allstate (ALL), 17.3%

Sells

  • Progressive (PGR), -19%
  • Principal Financial (PFG), -16.5%
  • Reinsurance Group (RGA), -13.4%
  • Janus Henderson (JHG), -0.8%

Healthcare (XLV), Overweight

Buys

  • Owens & Minor (OMI), 108.8%
  • Community Health Systems (CYH), 102.7%
  • OraSure Technologies (OSUR), 69.1%
  • Tandem Diabetes (TNDM), 67.1%
  • Sotera Health (SHC), 65.8%
  • Tenet Healthcare (THC), 65.6%
  • Arcus Biosciences (RCUS), 48.9%
  • Bruker (BRKR), 46.9%
  • Bio-Rad Laboratories (BIO), 48.1%
  • Universal Health Services (UHS), 42.4%

Sells

  • Becton Dickinson (BDX), -7.2%

Industrials (XLI), Market Weight

Buys

  • Generac Holdings (GNRC), 82.1%
  • Delta Air Lines (DAL), 71.3%
  • United Airlines (UAL), 44%
  • Boeing (BA), 39.5%
  • GXO Logistics (GXO), 39.5%
  • GE (GE), 32.5%
  • Middleby (MIDD), 29.8%
  • United Rentals (URI), 29.9%
  • Flowserve (FLS), 30.1%
  • Jacobs Solutions (J), 27.1%

Sells

  • Stanley Black & Decker (SWK), 5.6%

Info Tech (XLK), Overweight

  • Nvidia (NVDA), 91.9%
  • NetApp (NTAP), 76.6%
  • Lam Research (LRCX), 70.8%
  • Euronet Worldwide (EEFT), 68.7%
  • Applied Materials (AMAT), 69.8%
  • FleetCor (FLT), 67.9%
  • IPG Photonics (IPGP), 67.3%
  • TD Synnex (SNX), 65.7%
  • Western Digital (WDC), 58.9%
  • FormFactor (FORM), 57.4%

Sells

  • ExlService (EXLS), -18.2%
  • Xerox (XRX), 1.1%
  • Cisco (CSCO), 5.2%
  • Hewlett Packard Enterprise (HPE), 7%

Materials (XLB), Overweight

Buys

  • Newmont (NEM), 141.5%
  • Steel Dynamics (STLD), 46%
  • Sealed Air (SEE), 39.2%
  • DuPont (DD), 38.4%
  • Avent (AVNT), 33.9%
  • Reliance Steel & Aluminum (RS), 30.7%
  • Eagle Materials (EXP), 28.9%
  • Valvoline (VVV), 26.4%
  • Vulcan Materials (VMC), 23.7%
  • Avery Dennison (AVY), 23.1%

Real Estate (XLRE), Market Weight

Buys

  • Digital Realty Trust (DLR), 45.6%
  • Weyerhaeuser (WY), 36.4%
  • Equinix (EQIX), 33.4%
  • Life Storage (LSI), 34.3%
  • Hudson Pacific (HPP), 33.5%
  • Easterly Government Properties (DEA), 30.6%
  • Ventas (VTR), 30.7%
  • Corporate Office Properties (OFC), 28.6%
  • Crown Castle (CCI), 27.3%
  • Kilroy Realty (KRC), 24.9%

Sells

Utilities (XLU), Underweight

Buys

  • NRG (NRG), 18.6%
  • Edison (EIX), 19.8%
  • Duke Energy (DUK), 16.7%
  • DTE Energy (DTE), 14.5%
  • AES (AES), 3.5%

See the S&P performance this week.

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