Questions about the course of the stock market in September, a historically dreary month, are not keeping Wall Street analysts from finding a slew of top stocks to buy. Goldman Sachs and Bank of America named an assortment of companies this week that they say have upside in the weeks ahead. CNBC Pro combed through recent Wall Street research to find some of the best-positioned stocks as September gets underway. They include: NextEra, Marathon Petroleum, Endeavor and H Group World Limited . NextEra Energy Buy the dip in shares of the renewable energy company, Goldman analyst Carley Davenport says. “NEE’s underperformance has been in focus for investors in recent months, with many trying to understand what factors are driving it,” she wrote earlier this week. Instead, Goldman says shareholders should look to several positive catalysts coming in the months ahead. First, Davenport says she’s increasingly bullish on the company’s new management team. “We recognize that it can take time for investors to build confidence in new management teams, but we believe that the management team for NEE is capable of meeting the robust growth plans the company has laid out,” she added. Second, Goldman says renewable backlog growth is picking up which should help earnings in the quarters ahead. Davenport acknowledged investor angst hangs over NextEra’s Florida Power & Light utility due to a continuing investigation for campaign finance violations. Still, the investment bank sees a resolution sooner rather than later, with an immaterial financial impact to the company. The stock is down 20% this year, leaving shares just too “attractive” to ignore at current levels, she says. Endeavor Group Bank of America analyst Jessica Reif Ehrlich said earlier this week that shares of the media company offer “striking value.” Reif Ehrlich said investors are just not giving the company enough credit for its “entourage of highly attractive assets.” Positive catalysts ahead include the closing of the transaction for TKO, which will succeed the merged WWE and UFC. Any dividends or buybacks would also be a positive catalyst, BofA said. “Should none of these catalysts drive a re-rating in shares, we believe management may then consider more transformative actions to create shareholder value,” she added. The bank noted that a resolution of the twin Hollywood strikes is also likely to drive shares higher. Endeavor stock is only up a bit more than 1% this year, but Reif Ehrlich sees it as attractively valued. “We continue to view EDR as a collection of highly compelling assets that each, individually, have exposure to favorable secular tailwinds within the Media and Entertainment industry,” Reif Ehrlich wrote. Marathon Petroleum The oil refiner is coming off a “better-than-expected” second-quarter top and bottom line beat in early August, according to Goldman Sachs analyst Neil Mehta. But the shares, which are up 25% this year, have plenty more room to run, he wrote. The robust earnings report led Mehta to raise his earnings per share estimates and lift his price target to $153 per share from $146. Goldman praised management’s execution and likes Marathon’s robust margin environment, strong demand trends and growth initiatives in cluding new renewable diesel facilities. In addition, Mehta noted Marathon’s “commitment to shareholder returns” through dividends and buybacks. “During the quarter, MPC completed share buybacks of ~$3.1 billion, above our estimates of ~$2.75 billion, ” he added. Mehta concluded by saying Goldman remains “constructive on MPC given leading shareholder returns” and an “attractive refining setup.” Endeavor Group- Bank of America, buy rating “An entourage of highly attractive assets. … .Striking value given run up in WWE shares. …. .Should none of these catalysts drive a re-rating in shares, we believe management may then consider more transformative actions to create shareholder value … .We continue to view EDR as a collection of highly compelling assets that each, individually, have exposure to favorable secular tailwinds within the Media and Entertainment industry.” NextEra Energy- Goldman Sachs, buy rating “NEE’s underperformance has been in focus for investors in recent months, with many trying to understand what factors are driving it. … .We recognize that it can take time for investors to build confidence in new mgmt teams, but we believe that the management team for NEE is capable of meeting the robust growth plans the company has laid out. … .We continue to believe that valuation is attractive…” H World Group Limited- Bank of America, buy rating “Shares weak despite solid results = attractive opportunity. … .H World Group, a leading and fast-growing hotel chain based in China, was founded in 2005. … .We have a Buy rating on H World Group on three reasons: i) upside risk to company revenue/RevPAR [revenue per available room] guidance due to better than expected recent RevPAR trend, ii) re-rating potential in the early stage of recovery, iii) underperformance to hotel peers unjustified, in our view, given its superior growth and execution.” Marathon Petroleum- Goldman Sachs, buy rating “On the call management highlighted a supportive margin environment on strong demand trends, provided broadly positive updates on strategic growth projects, & reiterated a commitment to shareholder returns through competitive dividends & opportunistic buybacks. … .During the quarter, MPC completed share buybacks of ~$3.1 billion, above estimates of ~$2.75 billion. … .Overall, we remain constructive on MPC given leading shareholder returns, with a ~21%/11% 2023/2024 capital returns yield on our forecasts, attractive Refining setup with cracks surprising to the upside…”
Fight market malaise with these buys, Bank of America and Goldman say