Wall Street may not be betting the right way on these stocks: Credit Suisse

Published Fri, Apr 13 20183:46 PM EDT

There are still many stocks on Wall Street that have yet to receive the attention from investors they deserve, according to Credit Suisse. The bank released a research report called "Out on a Limb" on Thursday, including a collection of contrarian stock investment ideas. "This report identifies companies where our analysts stand apart from the consensus view, companies where our analysis reveals opportunities that the market has not yet priced in," Credit Suisse's equity research team wrote. The analysts included their theses for each suggestion as well as price targets and 12-month outlook. Here are three of their unusual picks. 1) Ralph Lauren ( RL ) The high-end retailer is already up more than 7 percent this year, and while short interest on the stock is at a steep 13 percent of all available shares, Credit Suisse sees potential. Analyst Michael Binetti has an overweight rating and a price target of $125 on the shares, implying 9.7 percent upside over the next 12 months. "We think Ralph Lauren is in the later stages of rebasing its brand to return to growth (after three years of declines) with a significantly reduced cost structure. While our industry checks don't yet show that the merchandise has fully turned a corner, with valuation well below the peer group and better cost flexibility in the P & L today, we think any signs of improving fashion should cause valuation to correct toward peers quickly for this out of favor stock." 2) Cleveland-Cliffs ( CLF ) Down more than 3 percent in 2018, Cleveland-Cliffs' recent underperformance won't last as the company shifts away from lower margin contracts, according to analyst Curt Woodworth. He has an overweight rating on the stock and a price target of $9 on shares, implying nearly 30 percent upside over the next year. "We like Cleveland-Cliffs' full hot-briquetted iron (HBI) ownership and view North American pellet fundamentals to be strong. After hosting investor dinner with management, including Cleveland-Cliffs CEO and HBI project head, we expect electric arc furnaces to continue to take market share in U.S. value add flat rolled, demanding higher quality feedstock over time." 3) Teva Pharmaceutical ( TEVA ) Analyst Vamil Divan said Teva should be able to execute on its restructuring plans and remedy its debt problem over time. The Israel-based pharma company should see roughly 28 percent upside over the next year, according to Credit Suisse. "We see evidence from the track record of Teva's CEO that the company will be able to execute its restructuring plan in a swift, efficient manner, streamlining the business and improving their debt situation over time, but we continue to watch for evidence that the company is on target to meet the proposed $3 billion cut as scheduled. We anticipate the elimination of low and negative margin products from the generics business will optimize that revenue stream, and growth in the ex-U.S. generics business will lessen the impact of pricing pressure in the U.S.

A model walks the runway at the Ralph Lauren Fall/Winter 2016 fashion show during New York Fashion Week on February 18, 2016 in New York City.

Victor Virgile | Gamma-Rapho | Getty Images

There are still many stocks on Wall Street that have yet to receive the attention from investors they deserve, according to Credit Suisse.

The bank released a research report called "Out on a Limb" on Thursday, including a collection of contrarian stock investment ideas.

"This report identifies companies where our analysts stand apart from the consensus view, companies where our analysis reveals opportunities that the market has not yet priced in," Credit Suisse's equity research team wrote.

The analysts included their theses for each suggestion as well as price targets and 12-month outlook.

Here are three of their unusual picks.