Barclays: 7 stocks ready to pop 10% or more

Published Mon, Jul 11 20163:11 PM EDT

The Barclays equity research team put out a note to clients Monday with its best stock recommendations for the next 12 months, saying stock picking is more important than ever, even with the S & P 500 at a new high. We expect "alpha focus to be vital in the near term as we navigate an environment that may present numerous macro pitfalls," states the Monday note. "Our Americas Top Picks present a collection of our marquee bottom-up investment ideas, each representing an analyst's most high-conviction liquid stock selection within the associated coverage industry." Here are 7 of the top Barclays overweight-rated picks. Barclays' Lauren Lieberman has a $57 price target on Newell Brands , representing 17 percent upside from Friday's close. "We believe concerns around the complexity of the new Newell Brands portfolio and leverage levels coming out of the Jarden acquisition will prove exaggerated in the long run. ... the combined earnings power of the new entity including cost synergies should allow for ample cash flow generation, allowing NWL to delever its balance sheet down to the target range by mid-2018, with pay down beginning in 2H16." Barclays' Kenneth Hill has a $294 price target on Intercontinental Exchange , representing 14 percent upside from Friday's close. "Intercontinental Exchange (ICE) represents the most compelling opportunity in our coverage given its: 1) attractive valuation (meaningful discount to exchange peers), 2) ability to increase revenue contribution from high quality, recurring sources, and 3) potential to improve margins/earnings/multiple as it integrates acquisitions." Barclays' Joshua Raskin has a $152 price target on Aetna , representing 30 percent upside from Friday's close. "We believe that Aetna enjoys key competitive advantages that position it well for the future, even on a stand-alone basis. Aetna has become a more diversified company with increased exposure to non-commercial sources. The company has strong market share density, substantial product breadth across the commercial, government, and individual segments, service that is consistently ranked at the top of the industry, and a strong and capable leadership team." Barclays' Brandon Oglenski has a $205 price target on FedEx , representing 31 percent upside from Friday's close. "FedEx is one of only a handful of transportation stocks offering meaningful growth at a relatively cheap valuation. E-commerce is driving outperformance in U.S. and European package markets, benefiting FedEx's global networks. The company operates a best-in-class Ground network in the U.S. that enjoys superior profitability and service compared to rivals, supporting a high-single digit growth outlook." Barclays' Kannan Venkateshwar has a $33 price target on Twenty-First Century Fox , representing 19 percent upside from Friday's close. "Amid the secular concerns weighing on U.S. media, we view Twenty-First Century Fox as the most attractive name. We believe that concerns around FX, advertising, and affiliate fee growth, while valid, are reflected in the price. More importantly, in an environment where companies are losing operating leverage due to pressure on advertising and affiliate fees, Fox could be an exception, given its international exposure." Barclays' Felicia Hendrix has a $105 price target on Royal Caribbean , representing 54 percent upside from Friday's close. "Trading at 9.4x 2017E EPS, the disconnect between Royal Caribbean's fundamentals and its valuation creates a significant buying opportunity, in our view. Royal Caribbean currently faces the best booked position in its history, which sets the company up well to meet its 'Double-Double' financial targets in 2017 (EPS of ~$6.90 and double-digit ROIC)." Barclays' Mark Moskowitz has a $121 price target on Apple , representing 25 percent upside from Friday's close. "Apple is our Top Pick in U.S. IT Hardware, owing to its relative growth potential and low cloud displacement risk. ... We think there are enough iPhone 5 and 5S users, alongside switchers, to underpin an iPhone 7 cycle that can repair unit growth trend-lines, providing a sturdier handoff to a bigger cycle in C2017 with IP8."

An employee sorts packages inside the FedEx distribution hub at Los Angeles International Airport.

Patrick T. Fallon | Bloomberg | Getty Images

We expect "alpha focus to be vital in the near term as we navigate an environment that may present numerous macro pitfalls," states the Monday note. "Our Americas Top Picks present a collection of our marquee bottom-up investment ideas, each representing an analyst's most high-conviction liquid stock selection within the associated coverage industry."

Here are 7 of the top Barclays overweight-rated picks.