(This story is for CNBC Pro subscribers only.) After a wild 2020, UBS is trying to peg the top performers of the new year. The Wall Street firm likes names like Morgan Stanley , Southwest Airlines and Constellation Brands , among other equities with big upside to UBS' price targets. UBS surveyed all of its U.S.-based analysts and selected the most compelling buy-rated investment ideas for the year ahead. The Wall Street firm said it focused on stocks where its analysts have a differentiated view and unique data sources. "From a strategy perspective, we chose stocks with exposure to key themes for next year including those with notable upside in further reopening of the economy as well as secular winners with still attractive growth prospects relative to valuations," UBS equity strategist Keith Parker told clients. "We've also considered upside to price target, risk/reward skew, and sector weightings." Take a look at some of the UBS picks here. Financials have been some of the hardest hit by the pandemic, but UBS is betting on Ally Financial and Morgan Stanley to come out on top next year. The firm expects Ally to benefit from the net interest margin expansion give its asset sensitivity. "ALLY has demonstrated a combination of disciplined asset growth, pricing strength, and operating leverage. Though the economic outlook remains uncertain, we expect credit quality to be resilient and reserve levels to eventually decline as the economy continues recovering, buttressing earnings," UBS analyst Saul Martinez told clients. "We view MS as well positioned to see accelerating growth in its wealth and asset management business," analyst Brennan Hawken said of Morgan Stanley. UBS sees 24% upside for Ally Financial and 17% upside to Morgan Stanley's 12-month price targets. UBS also expects Amazon , one of the biggest beneficiaries from the pandemic, to continue to gain momentum next year. The firm believes Amazon Web Services can sustain high revenue growth while expanding margins. "We continue to believe that COVID-19 will have a profound impact on consumer/enterprise behavior over the medium-to-long term. Amazon's business mix positions the company to be a beneficiary of sustained long-term behaviors that are likely pulling forward prior multi-year industry adoption curves in eCommerce, cloud computing, media consumption, digital ad & AI voice assistants," said UBS analyst Eric Sheridan. UBS's 12-month price target implies nearly 30% upside to Amazon's stock, even after the Jeff Bezos led company's 70% gain in 2020. The Wall Street firm picked wine and beer producer Constellation Brands for its 2021 highest conviction list because UBS considers the stock "undervalued." "STZ's near-term event path includes accelerating shipment through F2H and closure of wine transaction. We believe the Beer growth and margin story remains underappreciated and the current valuation fails to discount the deleverage path ahead," UBS analyst Sean King told clients. Chipmaker Micron Technologies , Dell Technologies and Boston Scientific also make UBS' highest conviction picks list for 2021. The firm see's 16% upside for Micron, 17% upside for Dell and more than 30% upside for Boston Scientific. Airline love UBS said Southwest Airlines is the "best way to play a recovery in the US Airlines." The firm noted Southwest does not have a bloated balance sheet like many of the other beaten down airlines. "While it would appear that rising COVID rates throughout much of the globe and increased restrictions could dampen any recovery prospects over the coming 4-6mos, vaccine data does create a path to a faster recovery than previously expected," said UBS analyst Myles Walton. We don't see things returning to pre-COVID level evenly for our aerospace and airline coverage; however, the improved prospects have pulled forward our estimates while also increasing our multiple assumptions," he added. UBS sees 42% upside for Southwest Airlines' stock. Pandemic winner DocuSign is another name UBS highlighted for 2021. The company's stock is up more than 220% in 2020 due to an acceleration in business fueled by the stay-at-home orders. "The COVID crisis motivated almost every organization to electronically sign and complete agreements, leading to what DocuSign referred to as 'unprecedented' growth in signature volumes," UBS analyst Karl Keirstead told clients. Keirstead said DocuSign is trading well-above its historical average but he thinks the stock deserves the premium because on the "prospect of above-normal billings and revenue growth as the COVID crisis accelerates enterprise interest in automating more work processes, the attractive competitive set, and a strong track record of execution." UBS sees 29% upside to DocuSign's $290 price target. Lastly, UBS likes discount retailer Dollar Tree for its earnings driver Family Dollar. "We expect Family Dollar to experience an improvement in sales productivity as it benefits from its consumables offering (short run) & store renovations (long run)," UBS analyst Michael Lasser told clients. Lasser said Dollar Tree's challenges will be "short lived" and that it currently trades at a 15% discount to its industry peers. — with reporting from CNBC's Michael Bloom.
A worker stacks cases of Constellation Brands' Corona beer for delivery at the Euclid Beverage LLC warehouse in Peru, Illinois.
Daniel Acker | Bloomberg | Getty Images
(This story is for CNBC Pro subscribers only.)
After a wild 2020, UBS is trying to peg the top performers of the new year.
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