JP Morgan releases analyst focus list, highlights top stock picks

Published Thu, Feb 1 201811:27 AM EST

J.P. Morgan asks its analysts to select their top three stock picks each month, targeted to one of the following investment tactics: Near term Growth Income Value Short Ideas The bank released its latest investing ideas to its clients on Thursday, highlighting what it sees as the best stocks for the month ahead. "The investment ideas we provide are tailored to these selected strategies and, as such, may vary from J.P. Morgan's fundamental ratings," analyst Nicholas Rosato Jr. wrote to clients. "This monthly publication is a complete refresh; ideas that are not presented again should be considered superseded by new ideas." Six names were added to the analyst focus list while three have been removed since last month. Here are four of the six new focus list stock ideas from J.P. Morgan's analysts. 1) McDonald's ( MCD ) McDonald's should be viewed as a value strategy, according to analyst John Ivankoe. He currently has an overweight rating on McDonald's shares as well as a $184 price target, implying 8 percent upside over the next year. "We believe current prices represent an attractive buying opportunity for McDonald's shares. As the company continues with its modernization efforts across the U.S., we see upside to same-store sales estimates and longevity to the current momentum of the business. Further aiding this is a new dollar menu value platform, the further rollout of delivery, food quality enhancements including 'hot off the grill,' and focus on McCafe." 2) Biogen ( BIIB ) Analyst Cory Kasimov says Biogen, unlike McDonald's, should be seen as a growth play. His overweight rating on the biotech company, accompanied by a $404 price target, represents his belief that the stock could gain 16 percent from Wednesday's close. "Biogen is our top large-cap pick owing to our increasing comfort in the company's core commercial prospects, the potential upside optionality of business development, and our conviction that this could evolve into one of the most over-owned names in all of biotech leading up to the Alzheimer's data in late 2019 or 2020." 3) American Axle ( AXL ) J.P. Morgan's Ryan Brinkman calls American Axle a value investment, encouraging clients to take a second look at the auto parts manufacturer. His $26 price target represents 47 percent upside from Wednesday's close. "American Axle should see the benefit in 2018 of the transformative acquisition of Metaldyne in 2017, as more cost synergies are realized. We expect cost synergies from the merger to track toward the higher end of expectations and believe that revenue synergies are another underappreciated tailwind. Furthermore, the firm will continue to de-lever, reducing fears about relatively higher leverage and improving the multiple." 4) EQT ( EQT ) EQT is a value play, according to analyst Arun Jayaram, who told clients that the company remains a solid option in the natural gas space. The analyst, who is overweight EQT, has an $81 price target on shares, which is 49 percent above Wednesday's closing price. "EQT has one of the industry's most attractive positions in the core of the southern Marcellus Shale, which sits at the bottom of the U.S. natural gas cost curve. In a natural gas environment that could remain challenged for many years, we view this industry-leading cost structure as a key competitive advantage."

McDonald's worker prepares french fries to go.

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J.P. Morgan asks its analysts to select their top three stock picks each month, targeted to one of the following investment tactics:

Near term
Growth
Income
Value
Short Ideas

The bank released its latest investing ideas to its clients on Thursday, highlighting what it sees as the best stocks for the month ahead.

"The investment ideas we provide are tailored to these selected strategies and, as such, may vary from J.P. Morgan's fundamental ratings," analyst Nicholas Rosato Jr. wrote to clients. "This monthly publication is a complete refresh; ideas that are not presented again should be considered superseded by new ideas."

Six names were added to the analyst focus list while three have been removed since last month.

Here are four of the six new focus list stock ideas from J.P. Morgan's analysts.