Soccer and banks: These are some of the 'best-in-class' stock plays to emerge from the pandemic

Published Sat, May 30 20208:09 AM EDT

(This story is for CNBC PRO subscribers only.) As the economy begins to re-open and recover from the coronavirus pandemic, there are a slew of top stocks that Wall Street analysts see as essential to a client's portfolio. These high-quality companies all have different attributes, but they are some of the best investing ideas analysts have to offer. They include: Transocean , Citi , Manchester United , Nvidia and Hibbett Sports . Manchester United Like many sports teams, the professional soccer club based in Manchester England, has been sidelined due to the coronavirus crisis. The company reported a third-quarter loss last week, but that's not stopping Jefferies from recommending the stock. "What's clear to us is MANU remains a best-in-class brand in the world's most popular sport, and that creates significant monetization opportunities that will only strengthen long term," analyst Randal Konik said. Armed with a robust balance sheet and a return to training, it's clear the sky's the limit for Manchester, Jefferies said. "Manchester United remains a strong global brand," the analyst said. Shares finished the week up 6%. Hibbett Sports Susquehanna upgraded Hibbett to positive this week and said the sporting goods retailer has at least one thing going for it: "Little to no chance of being 'malled,'" analyst Sam Poser said of the company, which finished the month of May up 25%. "With a store fleet located primarily in off-mall and rural locations, we think HIBB holds a distinct advantage over competitors," he said. Added together with a "best-in-class" online presence and the firm sees plenty of upside. "We are confident that HIBB is in the early stages of realizing the benefits from the aforementioned investments and will further refine and improve its digital and omni-channel capabilities, which we think will propel sustainable and profitable same store sales growth over the long-term." Citi The major banks all finished sharply higher this week as investors increasingly see financial institutions as benefiting from reopening economies. Citi in particular finished the week up 8% "While there's no escaping the risks from this recession on credit and rates, Citi seems fortified in a variety of ways," Wells Fargo analyst Mike Mayo said. The firm believes the bank has the capital to pay its dividend as well as delivering a "best-in-class" performance in the first quarter. "If, as expected, Citi effectively manages through this period while keeping loan losses manageable relative to the strength of the balance sheet, the results should be a double benefit for both the stock price and the perception as improved risk managers," he said. Transocean - Goldman Sachs, Buy rating "Well-positioned for downturn with solid backlog and best-in-class fleet. ... Transocean is seeing many of its customers pursue project deferments of 9-12 months in response to the oil price downturn. However, the company has yet to experience many outright contract terminations as some of its peers have, and nor do they expect to, given strong contract terms on key offshore projects." Nvidia - Bank of America, Buy rating "Reiterate Buy and top sector pick on NVDA on its multi-cylinder growth; synergistic Mellanox/Cumulus acquisitions; disruptive Ampere product-based pipeline; and best-in-class execution. ... NVDA's results are especially impressive considering the company is still ahead of multiple drivers across: Data Center – Q1 surged 80% YoY with only a marginal benefit from highly transformative new 7nm Ampere; Gaming – which is being aided by a resurgent Nintendo and is ahead of 2H tailwinds from new Sony/MSFT game consoles which could catalyze a large upgrade cycle in PC gaming; and newer 5G/edge markets." Citi - Wells Fargo, Overweight rating "While there's no escaping the risks from this recession on credit and rates (and some political headlines in Mexico), Citi seems fortified in a variety of ways. Capital is well above minimums and, even w/reserve builds, earnings in 1Q20 were 2x the dividend. Indeed, the Fed stress test assumes losses in capital markets in a crisis scenario whereas Citi performed best-in-class in 1Q20 and likely continues to benefit in Fixed Income Clearing Commission. ... If, as expected, Citi effectively manages through this period while keeping loan losses manageable relative to the strength of the balance sheet, the results should be a double benefit for both the stock price and the perception as improved risk managers." Hibbett Sports - Susquehanna, Positive rating "Little to No Chance of Being 'Malled.' ... Exceptional execution and operational discipline were on full display in 1Q21 and should continue for the foreseeable future. HIBB's best-in-class digital and omni-channel capabilities are leading to improved customer engagement, retention, and acquisition. Further, with a store fleet located primarily in off-mall and rural locations, we think HIBB holds a distinct advantage over competitors. " Manchester United - Jefferies, Buy rating "We are updating our model following F'3Q results last week which illustrated some impact as a result of COVID-19, although a more substantial impact is expected in 4Q and into next FY. However, what's clear to us is MANU remains a best-in-class brand in the world's most popular sport, and that creates significant monetization opportunities that will only strengthen LT. Investment thesis: MANU is one of the most successful and popular global brands in the world, with unparalleled reach benefiting from a changing media landscape where live content is increasingly valuable. With global sport continuing its rise, team performance likely to improve, and fundamentals solid and predictable, we'd buy MANU."

Nvidia CEO Jensen Huang.

Source: Nvidia

(This story is for CNBC PRO subscribers only.)

As the economy begins to re-open and recover from the coronavirus pandemic, there are a slew of top stocks that Wall Street analysts see as essential to a client's portfolio.

These high-quality companies all have different attributes, but they are some of the best investing ideas analysts have to offer.