Citi has selected a number of stocks it believes could do well in the second half of 2022 as investors continue to navigate market uncertainty and hot inflation. Equity markets suffered heavy losses in the first six months of this year as a relentless sell-off brought key indexes to their knees. The S&P 500 endured dizzying swings before closing the first half in bear market territory, sending the index into its worst halftime performance since 1970. With the second half currently underway, investors are bracing for continued volatility as recession fears escalate. According to Citi, this focused on stocktaking. “Equity-specific differentiation will be a critical focus, although the stock market is likely to remain in the grip of macro considerations,” Citi’s strategists led by Scott Chronert said in a report released in June. Said. 29. “We expect business models to be tested,” they wrote, emphasizing the company management’s ability to manage a range of issues, such as workforce and supply chains. Read more ‘Dividend aristocrats’: Strategists call high-yielding stocks to beat bear market Wall Street believes these battered global stocks are poised for a rebound Wall Street banks identify best global stocks for second half – and three more 70% upside, Chronert acknowledged the increased recession risks and put the probability of a global recession at 50%. The recession is most likely a 2023 event – if it does occur, he said. Meanwhile, rising consumer prices, along with decades of high inflation in many economies, including the US, Europe and parts of Asia, continue to weigh on investor sentiment. Stocks that can withstand higher inflation How should investors position themselves in such an environment? Pricing power, which refers to a company’s ability to raise prices without losing business, gives firms an advantage amid rising prices. Such companies tend to maintain an inflationary environment better than their competitors, as they can impose higher costs on customers. Citi’s strongest buy-grade companies include Estee Lauder, Kellogg, Chipotle and Domino’s Pizza in the consumer segment, and Thermo Fisher Scientific and HCA Healthcare in the healthcare segment. The bank also likes Amazon, Microsoft, Atlassian and CrowdStrike in the tech sector. A number of financial stocks appeared on the bank’s screen, including Allstate Corp, MetLife and Hartford Financial Services. ‘Highest convictions’ names Citi also compiled a list of the ‘highest conviction ideas’, which are the bank’s best stock buys. These include chemical firm Linde, automotive parts retailer AutoZone, Walmart, electronics manufacturer Jabil, wireless operator T-Mobile, cybersecurity firm Fortinet, and biotech firm Apellis Pharmaceuticals. Semiconductor equipment maker Lam Research was also on Citi’s list, and the stock had the highest rise of the bank’s price target among the bank’s best stock ideas. The stock closed around $389 in Tuesday trading, which represents a potential increase of 85.1% to Citi’s price target of $720.
The best stock picks for the second half of 2022
