These are the 33 stocks that are predicted to outperform Wall Street's expectations in 2021, says Oppenheimer & Co

  • Leading investment bank and brokerage service, Oppenheimer & Co, released their top picks list on November 16.
  • Oppenheimer's 33 equity analysts picked an individual stock they believe will outperform over the next 12 months, based on fundamentals and market conditions.
  • "These are the most timely stocks in the opinion of our research analysts," the report said.
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Oppenheimer & Co, a leading full-service brokerage and investment bank, released its top equity ideas list on November 16. "These are the most timely stocks in the opinion of our research analysts," the report explained.

Each of Oppenheimer's 33 equity analysts picked an individual stock they believe will outperform over the next 12 months based on fundamentals and market conditions.

This week, investors have been returning to value and recovery stocks as the vaccine frontrunners, Pfizer, Moderna and AstraZeneca, announced promising updates. This has led to a rotation out of growth stocks, many of which were stay-at-home winners, into value stocks, which have been worst-hit by the pandemic.

Investors continue to move into risk assets, such as equities, in search of income as bond yields remain low. Many top investment banks have been advising investors to consider alternative assets when looking for income and diversification.

However, the continual rise of COVID-19 cases combined with stricter lockdowns across many states in the United States and in Europe continues to weigh on investors' minds. This is especially true because a second stimulus package in the United States is yet to be passed. This has created swings in the markets as investors alternate between optimism and caution.

The list takes into consideration this current volatile market environment to provide the best equity picks going into 2021.

The analysts in the report note that the list is a menu for investors to choose from, rather than a portfolio.

Here is the full list:

1. Costco Wholesale

Ticker: COST

Category: Food, grocery & consumer products

Rating: Outperform

Analyst commentary: "We view COST as both an attractive shorter-term beneficiary of money flows related to coronavirus fears and a longer-term winner, which should help to drive continued outperformance."

Source: Oppenheimer & Co

2. Nike

Ticker: NKE

Category: Hardlines retail and ecommerce

Rating: Outperform

Analyst commentary: "In our view, NKE represents an already dominant, legacy global brand that is now aggressively embracing the power of digital to enhance almost all facets of its business model. We look on upbeat Street forecasts and guidance as at least doable and supportive of a premium valuation. Our call on NKE is longer-term in nature and not necessarily pegged to near-term data points."

Source: Oppenheimer & Co

3. Starbucks

Ticker: SBUX

Category: Restaurants 

Rating: Outperform

Analyst commentary: "As sales improve margins should also regain health. Our work suggests the financial model is well-positioned for earnings upside against consensus into fiscal '22 without assuming sales beats. This setup skews favorably against a valuation at the lower end of SBUX's historical averages."

Source: Oppenheimer & Co

4. S&P Global

Ticker: SPGI

Category: Exchanges and information analytics

Rating: Outperform

Analyst commentary: "SPGI is much more than a rating agency; in our view, the company strives to become a benchmark business. Other than enjoying the secular tailwinds, including rising corporate debt, ESG, the data explosion and active-to-passive investing, SPGI also has strong fundamentals including oligopolistic positions in many areas, a scalable platform and shareholder friendly capital return policies to support its premium valuation."

Source: Oppenheimer & Co

5. Citigroup

Ticker:  C

Category: Commercial & investment banking, merchant banking, private equity

Rating: Outperform

Analyst commentary: "C remains one of the cheapest banks in our universe of coverage, at ~0.60x tangible book value."

Source: Oppenheimer & Co

6. Global Payments

Ticker: GPN

Category: Speciality finance & fintech

Rating: Outperform

Analyst commentary: "We are attracted to GPN's business model, characterized by high recurring revenue, long-term contracts, and predictable earnings/FCF."

Source: Oppenheimer & Co

7. Fulgent

Ticker: FLGT

Category: Biotechnology

Rating: Outperform

Analyst commentary: "In both of its core markets (COVID-19 and genetic testing), we believe FLGT may enjoy sustainable cost advantages based on bioinformatics and digital ordering portal, which may allow the company to take market share. In terms of COVID-19 testing, we expect PCR viral detection to be preferred to serology antibody testing to support return to school and the workplace due to clear actionable results (if positive, stay home). Once FLGT addresses near-term lab capacity constraints, we see upside to consensus revenue from COVID-19 testing."

Source: Oppenheimer & Co

8. Apellis Pharmaceuticals

Ticker: APLS

Category: Biotechnology

Rating: Outperform

Analyst commentary: "APLS is a late-stage development company targeting complement mediated diseases. It is developing APL-2 (pegcetacoplan), currently in Phase 3 development for paroxysmal nocturnal hemoglobinuria (PNH) and geographic atrophy (GA), two potential blockbuster indications with significant unmet need."

Source: Oppenheimer & Co

9. Prothena

Ticker: PRTA

Category: Biotechnology

Rating: Outperform

Analyst commentary: "PRTA's lead asset is partnered prasinezumab (Roche-partnered (RHHBY-OTC, $42.65, Not Covered)), for Parkinson's disease (PD). The company has an antibody-focused discovery platform, which is focused on misfolded proteins. Prasinezumab is a potential first-in-class, best-in-class, disease-modifying treatment for Parkinson's disease."

Source: Oppenheimer & Co

10. United Therapeutics

Ticker: UTHR

Category: Biotechnology

Rating: Outperform

Analyst commentary: "Given UTHR trading at compressed multiples to its peer group, we believe the Street is under appreciating: (1) the strength of the UTHR business model, (2) a strong and experienced management team, and (3) newly launched products and pipeline that will help bridge the "patent cliff" and get back to growth."

Source: Oppenheimer & Co

11. Simulations Plus

Ticker: SLP

Category: Biotechnology

Rating: Outperform

Analyst commentary: "We see SLP as an attractive vehicle for investors looking for exposure to the biotech innovation themes and data growth waves. Ultimately, we believe its impressive 10-year growth trajectory remains in early innings and expect its recent raise to help accelerate and strengthen market leading position."

Source: Oppenheimer & Co

12. Turning Point Therapeutics

Ticker: TPTX

Category: Biotechnology

Rating: Outperform

Analyst commentary: "We see SLP as an attractive vehicle for investors looking for exposure to the biotech innovation themes and data growth waves. Ultimately, we believe its impressive 10-year growth trajectory remains in early innings and expect its recent raise to help accelerate and strengthen market leading position."

Source: Oppenheimer & Co

13. Acceleron Pharma

Ticker: XLRN

Category: Biopharmaceuticals 

Rating: Outperform

Analyst commentary: "We expect Reblozyl's scope to eventually expand to the broader β-thal and MDS populations, and view the company's $2B peak revenue guidance as conservative."

Source: Oppenheimer & Co

14. Iovance Biotherapeutics

Ticker: IOVA

Category: Emerging biotechnology

Rating: Outperform

Analyst commentary: "We believe the company's lead asset, LN-144, could find success in late-stage melanoma patients who do not respond to front-line therapy."

Source: Oppenheimer & Co

15. UnitedHealth Group

Ticker: UNH

Category: Healthcare providers & managed care

Rating: Outperform

Analyst commentary: "We believe UNH is well positioned by virtue of its diversification, strong track record, elite management team and exposure to certain higher growth businesses. The company's Optum business is a nice complement to its core managed care operations and continues to account for a large share of earnings. Furthermore, UNH's vertical integration strategy strengthens the company's competitive positioning across many areas of the healthcare landscape."

Source: Oppenheimer & Co

16. Edwards LifeSciences

Ticker: EW

Category: Medical devices

Rating: Outperform

Analyst commentary: "In our view, EW has an excellent P&L profile with strong revenues, EBIT margins, and EPS CAGR. A strong and strategic management team rounds out the picture."

Source: Oppenheimer & Co

17. Medtronic

Ticker: MDT

Category: Medical devices

Rating: Outperform

Analyst commentary: "MDT has several sales drivers, including TAVR (low-risk market expansion), Micra leadless pacemaker, neurovascular market strength, robotics (spine, general surgery), diagnostics, among others. In addition, emerging market growth remains an important tailwind."

Source: Oppenheimer & Co

18. XPO Logistics

Ticker: XPO

Category: Industrials & business services

Rating: Outperform

Analyst commentary: "XPO's base is strong/scalable via competitive new business wins paired with execution toward its internally established initiatives targeting $0.7–1.0 billion of potential profit growth opportunity. We anticipate progressively improving financial performance following a perceived 2Q20 COVID-19-driven trough."

Source: Oppenheimer & Co

19. Amyris

Ticker: AMRS

Category: Industrial efficiency & resource optimisization 

Rating: Outperform

Analyst commentary: "We believe Amyris is uniquely positioned to enable growth in sustainable and organic compounds disrupting traditional chemicals, food, and consumer end markets through cost reduction and increased purity of ingredients."

Source: Oppenheimer & Co

20. BorgWarner

Ticker: BWA

Category: Industrial efficiency & resource optimization

Rating: Outperform

Analyst commentary: "As the global auto industry evolves to meet increasingly stringent emissions regulations, we expect BorgWarner to benefit from accelerating vehicle electrification, continued runway on turbochargers, and overall strong position (20–25% market share) across product lines for internal combustion engines."

Source: Oppenheimer & Co

21. Rexnord

Ticker: RXN

Category: Industrial machinery & flow control

Rating: Outperform

Analyst commentary: "We appreciate RXN's through-the-cycle core growth potential (both platforms), runway for material PMC margin expansion (led by SCOFR traction and continued RBS initiatives), and strategic M&A upside."

Source: Oppenheimer & Co

22. WESCO

Ticker: WCC

Category: Industrial Multi-Industry

Rating: Outperform

Analyst commentary: "Our Outperform rating reflects solid principal preservation on high FCF yield (viewing current low stock price as unsustainable, pending start to posttransaction debt reduction), against real option value of synergy realizations."

Source: Oppenheimer & Co

23. Terminix Global Holdings

Ticker: TMX

Category:  Special situations

Rating: Outperform

Analyst commentary: "In our view, Terminix offers significant upside, as management looks to improve customer retention and achieves long-term organic growth of 5% with +30% incremental margins. The sale of SMB could close in 60-90 days and the business could generate net proceeds of $1.1B."

Source: Oppenheimer & Co

24. Alteryx

Ticker: AYX

Category: Analytics, collaboration and infrastructure software

Rating: Outperform

Analyst commentary: "Our bullish view is based on our belief that Alteryx: (1) is strongly positioned to benefit from favorable secular trends driving enterprise digitization and a rise in the importance of data citizens; (2) is exposed to a large and growing TAM with expansion opportunities into AI/ML; and (3) will continue to successfully execute on its land-and-expand model, adding new customers and driving deeper account penetration."

Source: Oppenheimer & Co

25. Verint Systems

Ticker: VRNT

Category: Communication & infrastructure software

Rating: Outperform

Analyst commentary: "Verint provides analytic software-based solutions for enterprise business intelligence, cybersecurity, communications interception and digital video security and surveillance."

Source: Oppenheimer & Co

26. Activision Blizzard

Ticker: ATVI

Category: Emerging technology & services

Rating: Outperform

Analyst commentary: "We believe momentum in CoD: Modern Warfare, CoD Mobile, as well as CoD: Warzone will offer material near-term upside and result in multiple expansion longer term as investors regain confidence in ATVI's ability to innovate, protect its core franchises, and grow its audience across platforms."

Source: Oppenheimer & Co

27. Paycom Software

Ticker: PAYC

Category: SAAS/Application Software

Rating: Outperform

Analyst commentary: "PAYC has established itself as one of the fastest growing and more profitable companies within the SaaS industry. We are confident in PAYC's multi-year growth and cash flow potential, given a strong position in the payroll and HCM market, and favorable secular tailwinds."

Source: Oppenheimer & Co

28. Zendesk

Ticker: ZEN

Category: SaaS/Applications Software

Rating: Outperform

Analyst commentary: "We are confident in Zendesk's multi-year growth and cash flow generation potential, given its leadership position in the category. We are bullish on Zendesk's future opportunity with the Sunshine platform, which we believe will be a strong growth driver for the business in the future."

Source: Oppenheimer & Co

29. Qorvo

Ticker: QRVO

Category:  Semiconductors & components

Rating: Outperform

Analyst commentary: "In our view, recent strong execution has QRVO ideally positioned to capitalize on 5G structural growth. "

Source: Oppenheimer & Co

30. Universal Display

Ticker: OLED

Category: Emerging technologies & services

Rating: Outperform

Analyst commentary: "In the next five years, we expect OLED display to continue market share gain across product verticals and help bring new designs such as foldable phones/tablets to mass market. Although revenue volatility remains high on a quarterly basis, we believe the long-term trend of OLED adoption and Universal Display's competitive strength remain sound."

Source: Oppenheimer & Co

31. Verizon

Ticker: VZ

Category: Communication & cloud

Rating: Outperform

Analyst commentary: "The company has done a good job of divesting non-core assets in order to focus on wireless and enterprise and on FiOS (its fiber voice/video/data offering) in its wireline segment, and now value-added services/content."

Source: Oppenheimer & Co

32. Facebook

Ticker: FB

Category: Media & internet

Rating: Outperform

Analyst Commentary: "Given the fragmentation of media and communication, we believe consumers will increasingly find media and information through their social graph, positioning FB in the middle of this information exchange."

Source: Oppenheimer & Co

33. Lending Tree

Ticker: TREE

Category: Online travel & internet

Rating: Outperform

Analyst Commentary: "When lender demand recovers, we see TREE leveraging its lender coverage network, insurance provider integrations, and paid marketing competencies to accelerate revenue growth and generate multiple expansion."

Source: Oppenheimer & Co

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