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Stock Market Traders and clerks at the CME Group toss confetti to celebrate the final trading session of the year December 31, 2010

Traders and clerks at the CME Group toss confetti to celebrate the final trading session of the year December 31, 2010.


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  • Stocks wrapped up a dramatic yet hopeful quarter that began with GameStop and ended with Archegos.
  • Heading into April and the second quarter, RBC updated its list of top 30 global ideas for 2021. 
  • The update incorporates RBC analysts’ views of the economic recovery and inflation expectations.
  • See more stories on Insider’s business page.

With the S&P 500 breaching 4,000 for the first time last week, US stocks wrapped up a dramatic yet hopeful first quarter of the year.

First, the market saw the extraordinary rise and precipitous fall of GameStop and other Reddit meme stocks. Then came the Treasury yield spike that fast-tracked the market rotation that has put everything from high-growth stocks, Cathie Wood’s Ark ETFs, and special-purpose acquisition companies under pressure. 

As if those market events were not enough to capture investors’ attention, the implosion of former “Tiger Cub” trader Bill Hwang’s family office sent shockwaves across Wall Street at the tail end of March. 

Against all odds, the market still managed to cross the 4000 threshold on the last day of March as President Joe Biden rolled out a multi-trillion-dollar infrastructure proposal

Heading into April, market strategists are already predicting a bullish month for stocks based on historical data.

Over the past 20 years, April has been the best month for stocks, according to Ryan Detrick, chief market strategist at LPL Financial.

“I had to double check, but sure enough, stocks have closed higher in April an incredible 14 out of the past 15 years,” Detrick wrote in a Wednesday research note as markets wrapped up March trading. 

Despite the prospect of stock gains ahead, risks surrounding the pace and extent of the economic reopening as well as the potential impact of rising inflation remain top of mind for many market watchers. 

RBC, which maintains a list of 30 high-conviction, long-term stock ideas, surveyed its global research analysts around the issues of reopening and inflation. 

The Canadian investment bank found that 78% of its global analysts were “positive” or “very positive” when it came to the reopening. With respect to inflation, its US analysts were a bit more cautious, while projecting that non-US stocks, as well as the energy, materials, and financials sectors, could benefit more if a pickup in inflation did materialize.

These views are incorporated into the updated stock list for the second quarter, with changes made to reflect “a rotation out of companies that have seen strong performance and less upside, into names that have more attractive potential upside,” RBC analysts led by Brian Abrahams wrote in a Thursday note.

Many of the newest additions to the list come from cyclical sectors like industrials and materials. The second-quarter additions are Canadian Pacific Railway (CP), Humana (HUM), The Home Depot (HD), and Vertex Pharmaceuticals (VRTX). 

Meanwhile, they removed stocks including AbbVie (ABBV), Cigna (CI), Kingfisher (KGF), and Truist Financial (TFC) from the list after strong year-to-date performances. 

As a whole, RBC’s top 30 global ideas list has returned 6.3% in the first quarter compared to the S&P’s 6.2%. Since its inception, the list has returned 40.2% compared to the S&P’s 25.7%.

The stocks, along with their tickers, price targets, implied return rates, and analyst commentaries, are listed below in alphabetical order. Those return figures are from calculations as of March 31.

Stock Market 1. Alimentation Couche-Tard

Stock Market $ATD
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Ticker: ATD.B

Price target: CAD 55

Implied all-in return: 36.6%

Analyst commentary: “Solid performance since the pandemic was declared underscores defensive nature of the c-store industry.”

Source: RBC Capital Markets

Stock Market 2. Americold Realty Trust

Stock Market $COLD
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Ticker: COLD

Price target: $43

Implied all-in return: 14.0%

Analyst commentary: “Americold Realty Trust is an industrial REIT focused solely on owning and operating temperature-controlled warehouses. COLD is the largest public player in this niche space, and we believe management will utilize its platform to drive solid earnings growth and create value for shareholders. As of 4Q20, the in-place portfolio derived ~88% of NOI from the US and ~12% from abroad, but over time, we expect the largest growth opportunities to be international.”

Source: RBC Capital Markets

Stock Market 3. Arch Capital Group

Stock Market $ACGL
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Ticker: ACGL

Price target: $41

Implied all-in return: 6.9%

Analyst commentary: “Arch is delivering solid core underwriting results and has enjoyed good momentum in recent quarters. The company has always been opportunistic in spotting profitable opportunities in both specialty insurance and reinsurance, which we believe will remain a key differentiator. Arch’s Mortgage unit is rebounding from 2020’s challenging market conditions and continues to see a declining default inventory and improving loss ratios. We see the current valuation as very attractive for a top-caliber underwriting franchise with a history of strong reserves and prudent capital management. Accordingly, we maintain our Outperform rating on ACGL shares.”

Source: RBC Capital Markets

Stock Market 4. ASOS

Stock Market Screen Shot 2021 04 05 at 9.13.52 AM

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Ticker: ASC

Price target: £7,500 

Implied all-in return: 35.5%

Analyst commentary: “ASOS is a rare case of a structural growth story that is underearning and trading attractively on valuation, both relative to history and peers. We believe that ASOS can recover and sustain outperformance in revenue growth while also delivering an improvement in EBIT margin towards 7% long term, allowing ample room for re-investment. The key margin drivers we see are accretion from its acquisition of Topshop and efficiencies and leverage on warehouse, payroll and other operating costs, as we assume all incremental benefits from, e.g., more direct sourcing in the US and economies of scale are re-invested. Accordingly, we project ASOS can generate £3bn of FCF over the next 10 years, after more than doubling its warehouse capacity and investment in technology – fuel for innovation.”

Source: RBC Capital Markets

Stock Market 5. Banco Bilbao Vizcaya Argentaria

Stock Market $BBVA
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Ticker: BBVA

Price target: €5.10 

Implied all-in return: 16.6%

Analyst commentary: “On a ROE vs P/B linear regression analysis vs peers BBVA’s valuation looks reasonable. But we think that this overlooks three key points which should mean that BBVA trades at a P/B premium. (i) Since 1999 BBVA has had the 9th most consistent earnings out of 54 European banks. (ii) Post the US bank sale BBVA has a significant amount of excess capital relative to its regulatory target. (iii) BBVA continues to outperform peers on cost control partially driven by the bank’s digital banking capabilities.”

Source: RBC Capital Markets

Stock Market 6. British American Tobacco

Stock Market $BATS
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Ticker: BATS

Price target: £3,200

Implied all-in return: 20%

Analyst commentary: “BAT is taking credible steps to develop its portfolio of new category products (Vapour, THP, or tobacco heating products, and Modern Oral). In 2019, these new categories accounted for less than 5% of BAT’s sales. In our view, BAT’s prospects remain predominantly a function of the cigarette industry.”

Source: RBC Capital Markets

Stock Market 7. Brookfield Asset Management

Stock Market $BAM
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Ticker: BAM

Price target: $55

Implied all-in return: 24.8%

Analyst commentary: “We think the combination of 1) BAM’s strong long-term investment track record; 2) significant liquidity available ($77B) to fund acquisitions and investments at potentially attractive prices in the current market environment and drive future NAV growth; and 3) a differentiated and diversified product shelf with demonstrated ability to fund-raise and drive scale benefits could result in double-digit NAV growth over time. Coupled with the shares trading at a -16% discount to NAV, we believe the current share price is an attractive entry point for a stock we view as a core holding.”

Source: RBC Capital Markets

Stock Market 8. Canadian Natural Resources

Stock Market $CNQ
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Ticker: CNQ

Price target: CAD 43

Implied all-in return: 15.5%

Analyst commentary: “We rate the common shares of Canadian Natural Resources Outperform for the following reasons: Globally Distinguished. Management Committee Structure. ESG — Lots of Progress.”

Source: RBC Capital Markets

Stock Market 9. Canadian Pacific Railway

Stock Market $CP
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Ticker: CP

Price target: CAD 587

Implied all-in return: 23.1%

Analyst commentary: “Our positive view on CP centers on a best-in-class railroad on the cusp of a transformative acquisition that, if approved, should set the stage for significant growth and a material upward valuation re-rate.”

Source: RBC Capital Markets

Stock Market 10. CenterPoint Energy

Stock Market $CNP
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Ticker: CP

Price target: $26

Implied all-in return: 17.6%

Analyst commentary: “CenterPoint turns in the direction of a more pure play regulated utility. A $3 billion increase in rate base raises total investment to $16 billion between 2021 and 2025, or 10% CAGR, with potential upside of an incremental $1 billion if approved. Houston Electric remains fundamentally strong with annual customer growth ~2%. If implemented successfully, Indiana Electric could benefit from rate base investments in renewables. Together, we believe electric utilities EPS could achieve 8.5% CAGR 2020-2023. CNP’s gas utilities continue to benefit from a series of pipeline replacement programs and we see EPS CAGR of 9% 2020-2023. Accounting for corporate expenses, we see overall utility operations EPS growing at 5.9% CAGR. CNP’s midstream investment, Enable Midstream (ENBL, covered by TJ Schultz) remains a wild card.”

Source: RBC Capital Markets

Stock Market 11. CrowdStrike

Stock Market $CRWD
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Ticker: CRWD

Price target: $250

Implied all-in return: 37.0%

Analyst commentary: “CrowdStrike was founded in 2011 with a mission of reinventing security for the cloud era. Co-founder George Kurtz previously worked at a gen-1 AV endpoint vendor and was motivated to build CrowdStrike after realizing that legacy security technology was incapable of protecting customers against modern attacks within a hybrid-cloud architecture.”

Source: RBC Capital Markets

Stock Market 12. Dollar Tree

Stock Market $DLTR
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Ticker: DLTR

Price target: $125

Implied all-in return: 9.2%

Analyst commentary: “We think Dollar Tree’s value – and convenience-based business model and heavy mix of consumables can help the company navigate economic deterioration better than most of the other companies in our coverage. Further, we think that dollar stores are very well suited to consumers with low nominal budgets (e.g., government support), as they can leverage their existing dollars across more products and categories than at other retailers given the value-priced merchandise and, often, smaller package sizes. While customers currently have money in their pockets, we believe that the company is well positioned from a value standpoint when/if that isn’t necessarily the case (i.e., stimulus checks cease arriving in the mail).”

Source: RBC Capital Markets

Stock Market 13. DuPont de Nemours

Stock Market $DD
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Ticker: DD

Price target: $87

Implied all-in return: 14.1%

Analyst commentary: “Early cycle recovery in China will likely help DD achieve a faster recovery than peers, along with cost action plans to help incremental margins. Additionally, we believe the N&B sale to IFF was a major first step in DD’s portfolio transformation plan and DD still has further portfolio transformation plans in place. Lastly, the PFOA case brought by CC has now been dismissed, and we believe a settlement will help DD move past the PFOA uncertainty overhang.”

Source: RBC Capital Markets

Stock Market 14. Element Fleet Management

Stock Market $EFN
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Ticker: EFN

Price target: CAD 18

Implied all-in return: 32.8%

Analyst commentary: “There are 4 key themes that drive our positive view of EFN: 1) attractive growth. We forecast EFN’s EPS will grow at a 15% CAGR over the next 5 years driven by new client wins, organic growth within existing customers and significant returns of capital; 2) multiple potential catalysts (see below); 3) strong defensive attributes. EFN faces minimal credit/residual risks and tends to have long-term contracts (3-5 years) with high retention rates (~98%); and 4) attractive valuation, as we see high EPS growth as a key driver of valuation and potential valuation multiple expansion.”

Source: RBC Capital Markets

Stock Market 15. Enterprise Products Partners

Stock Market $EPD
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Ticker: EPD

Price target: $28

Implied all-in return: 35.3%

Analyst commentary: “We rate EPD Outperform and view the stock as a core MLP holding with both offensive and defensive characteristics. EPD offers investors broad exposure to a full spectrum of the midstream value chains for NGLs and, increasingly, crude and petrochemical products. Furthermore, the partnership’s multi-year organic growth backlog helps provide visibility on long-term distribution growth. EPD has grown and should continue to grow its fee-based cash flows as announced projects enter service and ramp. The large market capitalization relative to the rest of the midstream MLP space should mean easier access to and lower cost of capital and better trading liquidity. We believe the diverse asset base adds stability to the cash flows and is defensive in a softer equity market or energy tape specifically. EPD continues to have a solid slate of identified organic growth projects.”

Source: RBC Capital Markets

Stock Market 16. GDS Holdings

Stock Market $GDS
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Ticker: GDS

Price target: $122

Implied all-in return: 50.5%

Analyst commentary: “We believe GDS has potential to outperform its peers given its positioning in an under-penetrated, growing market with strong customer demand trends and limited competitive supply. We believe the biggest risk (under the company’s control) is management’s ability to successfully manage, plan, and execute its expansion plans.”

Source: RBC Capital Markets

Stock Market 17. General Electric

Stock Market $GE
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Ticker: GE

Price target: $15

Implied all-in return: 14.6%

Analyst commentary: “Turnaround story likely gains momentum in 2021 with vaccine news boosting commercial aero; improving free cash flow is the key metric. We expect the high-profile turnaround led by CEO Larry Culp and team to gain significant momentum in 2021, especially as the vaccine news accelerates the recovery in commercial aero. We believe the bear thesis is fading and enthusiasm for GE’s improving free cash flow is building, likely drawing in more believers. Our SOP model implies attractive upside and our analysis shows that GE shares are still significantly under-owned.”

Source: RBC Capital Markets

Stock Market 18. Genmab A/S

Stock Market $GMAB
Markets Insider


Ticker: GMAB

Price target: $46

Implied all-in return: 40.1%

Analyst commentary: “We see GMAB as a highly validated antibody/biologics engineering company with demonstrated potential to develop best-in-class blockbuster products. We are most impressed by GMAB’s proprietary antibody technology, where its history of success differentiates it from competition and provides platform scarcity value. GMAB has a robust pipeline consisting of mAbs and BsAbs, which we see as compelling given GMAB’s platform successes. GMAB is also pioneering novel antibody technology such as “Next – Generation” HexaBody, DuoHexaBody, and HexElect antibody technologies.”

Source: RBC Capital Markets

Stock Market 19. Gilead Sciences

Stock Market $GILD
Markets Insider


Ticker: GILD

Price target: $80

Implied all-in return: 28.0%

Analyst commentary: “We believe Biktarvy’s strong profile and robust launch, along with favorable demographic and pricing dynamics, will underpin good HIV franchise sustainability through at least 2025, with nearer-term competitive threats overblown; we expect this to maintain a strong foundation for GILD’s valuation. Though we expect continued HCV declines, share and pricing stability should provide more predictability, and sustainable patient volumes should still contribute a meaningful ~$17B in cash flows over the next decade. We also see Trodelvy, magrolimab, and anti-TIGIT as potential blockbusters in the pipeline, and see strong BD optionality.”

Source: RBC Capital Markets

Stock Market 20. Humana

Stock Market $HUM
Markets Insider


Ticker: HUM

Price target: $479

Implied all-in return: 14.8%

Analyst commentary: “We believe shares of Humana should outpace the peer group. The company’s history of performance in Medicare Advantage is a key competitive differentiator that, combined with ongoing investments in benefits and plan design using savings delivered through its clinical programs, positions it well to continue posting above-average membership growth in Individual MA.”

Source: RBC Capital Markets

Stock Market 21. Nike

Stock Market $NKE
Markets Insider


Ticker: NKE

Price target: $165

Implied all-in return: 25.0%

Analyst commentary: “We see NKE as a best-in-class global athletic play, with its Consumer Direct Acceleration strategies supporting a multi-year mid-high teens EPS CAGR through FY26E. As the dominant brand in the attractive athletic category, NKE is in the early days of its new Consumer Direct Acceleration strategy, which should support a sustained multi-year HSD top-line trajectory.”

Source: RBC Capital Markets

Stock Market 22. Royal Dutch Shell

Stock Market $RDSB
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Ticker: RDS.B

Price target: £2,200

Implied all-in return: 68.4%

Analyst commentary: “Multiple franchise businesses should leave Shell generating higher returns: In our minds, Shell has three franchise businesses within the group, all of which are #1 in their respective areas. Global deepwater, integrated gas and marketing form Shell’s key competitive advantages, in our view. Shell’s marketing business in particular generates >20% ROACEs consistently and is the highest return business within the group.”

Source: RBC Capital Markets

Stock Market 23. SSE plc

Stock Market Screen Shot 2021 04 05 at 9.22.34 AM

Marketwatch



Ticker: SSE

Price target: £1,750

Implied all-in return: 25.8%

Analyst commentary: “We see in SSE a ‘dual threat’ with an attractive mix of assets with ~95% of EV and EBITDA in regulated networks and renewable activities.”

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Source: RBC Capital Markets

Stock Market 24. Teladoc Health

Stock Market $TDOC
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Ticker: TDOC

Price target: $260

Implied all-in return: 43.1%

Analyst commentary: “Virtual health has gone mainstream. We believe awareness and comfort with the technology have reached a tipping point and the breadth of potential use- cases is expanding rapidly. There are more examples of this surfacing across healthcare every day. We are also seeing increasing evidence that the Virtual First benefit design is beginning to take hold, which adds even more momentum to our outlook. While the rising tide should lift all boats, we believe Teladoc is the best positioned to capitalize on this. Its superior consumer engagement platform, breadth of offerings/clinical capabilities, and global reach are all important and durable competitive differentiators. Now with the inclusion of Livongo, we believe the combination of new member adds, cross-selling, and ramping utilization should drive 30-40% organic revenue growth for the next 3 years.”

Source: RBC Capital Markets

Stock Market 25. The Home Depot

Stock Market $HD
Markets Insider


Ticker: HD

Price target: $323

Implied all-in return: 7.8%

Analyst commentary: “We believe Home Depot’s business should continue to benefit from a combination of fundamental operational improvements, market share gains, a generally solid U.S. housing market, the consumer’s more home-centric focus and a reallocation of dollars away from major discretionary categories (like travel, restaurant spending, etc.) that have been decimated by the pandemic. Further, housing macro data (e.g., PFRI) indicate that spending within the home improvement sector continues to improve.”

Source: RBC Capital Markets

Stock Market 26. The Mosaic Company

Stock Market $MOS
Markets Insider


Ticker: MOS

Price target: $36

Implied all-in return: 14.5%

Analyst commentary: “Mosaic provides strong leverage to the potash and phosphate markets, and we believe it would be an ideal investment in a commodity upside scenario. The acquisition of production and distribution assets in Brazil further enhances the company’s exposure to the fastest-growing agriculture market and provides significant synergy potential.”

Source: RBC Capital Markets

Stock Market 27. Thomson Reuters

Stock Market $TRI
Markets Insider


Ticker: TRI

Price target: $98

Implied all-in return: 13.8%

Analyst commentary: “… we believe Thomson Reuters over the next five years can sustain an NAV CAGR of 8 – 9%, a notable increase over an estimated normalized NAV CAGR of 5 – 6% through the 2000s and 2010s. We see potential for further multiple expansion as Thomson Reuters continues an evolution to software provider. Importantly, we believe all of the KPIs underpinning NAV growth and multiple expansion are sitting at structural low points when looking out over the next decade.”

Source: RBC Capital Markets

Stock Market 28. Twilio

Stock Market $TWLO
Markets Insider


Ticker: TWLO

Price target: $510

Implied all-in return: 49.7%

Analyst commentary: “We estimate Twilio’s addressable market to be ~$87B today. With revenues of ~$1.7B anticipated in 2020, Twilio is only ~2% penetrated today.”

Source: RBC Capital Markets

Stock Market 29. Vertex Pharmaceuticals

Stock Market $VRTX
Markets Insider


Ticker: VRTX

Price target: $264

Implied all-in return: 22.9%

Analyst commentary: “We continue to be bullish on the prospects of VRTX’s CF franchise after Trikafta quickly saturated the U.S. market and an early approval in the EU enables commercial launch of Kaftrio; we are not particularly concerned about long-term threats to this franchise given the high bar and limitations for potential competitors, and we believe its high-growth prospects and potential best-in-class margins confer scarcity value. We believe that shares currently underappreciate this ongoing growth story and further see little value ascribed to the company’s pipeline, which should provide upside optionality and catalysts for appreciation on any updates.”

Source: RBC Capital Markets

Stock Market 30. Visa

Stock Market $V
Markets Insider


Ticker: V

Price target: $297

Implied all-in return: 40.8%

Analyst commentary: “Visa’s business model is such that, while we expect near-term results to be impacted by the macro environment, we believe it should be among the first companies to benefit from a reacceleration in retail spending. Social distancing and a broad reduction in travel have presented unique challenges to Visa’s business, but we believe this does not detract from it being a long-term, secular-driven stock that should provide solid compounding organic growth with opportunities for additional strategic M&A or change Visa’s long -term fundamentals of high-single- to low-double-digit organic revenue growth, 60% GAAP operating margins, potential for close to mid-teens EPS growth, and significant free cash flow generation.”

Source: RBC Capital Markets

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