With a new trading month just around the corner, JPMorgan is focusing on the key stocks it believes will outperform the market. All three major stock indexes started in the red on Tuesday as Iran’s missile strikes on Israel heightened tensions in the Middle East and dampened investor confidence in risk assets. The Nasdaq fell more than 1%, leading the losses among the three major indexes. On Monday, all three indexes ended September higher. It was the fifth straight month of gains for the S&P 500 and the Dow Jones Industrial Average, both hitting record highs. Against this backdrop, JPMorgan has updated its list of top ideas for growth, revenue, value and short-selling strategies. The investment bank added six stocks and removed seven stocks from the previous month. In October, new additions included Best Buy and Carmax, while deletions included Wayfair, CarGurus and First Citizens BancShares. Here are some of JPMorgan’s top picks for October. JPMorgan Chase added Best Buy to its focus list on Friday as part of the company’s value strategy as it sees possible inflection points in the electronics retailer’s key categories such as televisions and appliances. Citing positive growth in existing home sales and expanding adoption of artificial intelligence, the bank believes Best Buy’s average selling price will continue to grow. Analyst Christopher Horvers said Best Buy’s profitability will improve over time, noting that operating margins will rise to 5% from 4.1% last year. He has an overweight rating on the stock and a price target of $111, which would imply an upside of more than 9% from Tuesday’s closing price. “We believe replacement demand will continue to grow in 2025 given the longer duration of the COVID-19 outbreak, the early stages of new computing technologies, and the sensitivity of TV/appliances to home turnover,” the analyst wrote in a note. Will Rise, BBY Is in Investors’ Blind Spot “We also note that suppliers want BBY, which is an important endorsement for quality investors looking for higher beta stocks with room for cyclical upside. By comparison, 16 of the 28 Wall Street analysts covering the stock are neutral, while 11 have a buy equivalent rating. The average analyst price target for Best Buy is $104, implying The upside is just 3%. Shares of Richland, Minn.-based Best Buy have surged more than 29% so far this year. AT&T also has it on JPMorgan’s focus list as another part of the bank’s value strategy. AT&T has an overweight rating and a price target of $24, about 8% above Tuesday’s closing price. Wall Street is also bullish on the Dallas-based AT&T, which has a dividend yield of just over 5%, with 16 of 29 analysts giving the stock an overweight rating. Strong buy or buy ratings, but their average price target implies about 2% downside. This week, telecommunications company AT&T agreed to sell 70% of its DirectTV stake to private equity firm TPG for $7.9 billion. Shares of the company were up slightly after the announcement. Excluding dividends, the stock is up nearly 32% this year. On the growth front, JPMorgan has Eli Lilly as one of its picks, implying upside of more than $1,100. 24%, Mounjaro and Zepbound Shares of the maker of diabetes and weight-loss drugs are up more than 51% in 2024. LLY YTD Wall Street is largely bullish on Eli Lilly so far this year, with the $1,003 consensus price target representing more than 13% upside. . 23 of the 28 analysts covering Lilly have given it a Buy rating. The recommendation from JPMorgan comes as Lilly said in September it would invest $1.8 billion to expand its stock. Ireland’s maker of Alzheimer’s, obesity and diabetes drugs and other treatments Other stocks recommended by JPMorgan in October, such as Charles Schwab and Ulta Beauty, are also on the bank’s focus list. , emphasizing its growth strategy. Based on Tuesday’s closing prices, the bank’s target price for Schwab implies about 22% upside potential, and its target price for Ulta Beauty implies about 18% potential appreciation space.
