Here are Credit Suisse's best stock ideas to play the fastest economic growth in 35 years

Published Mon, Mar 8 202112:35 PM EST

The U.S. economy is poised to experience its fastest growth in decades as the country gradually reopens, according to Credit Suisse. The firm said some economically sensitive stocks, dubbed "super cyclicals," will lead the market rally from here. "2021 GDP growth is forecast to be the fastest in the past 35 years, driven by stimulative monetary and fiscal policy as well as the reopening," Patrick Palfrey, senior equity strategist at Credit Suisse, said in a note. "We believe focusing on the most economically sensitive companies will prove most advantageous." The Wall Street firm identified a slew of stocks that are best positioned to benefit from the historic economic rebound. This list of stocks was screened from the Russell 1000 universe, and then Credit Suisse analysts picked winners from their outperform-rated stocks as the best ideas for an accelerating economy. Several energy names made the list, including Devon Energy, Diamondback Energy and Pioneer Natural Resources . The energy sector has been the biggest winner this year, roaring back from a brutal 2020 amid a collapse in demand. The group has rallied a whopping 39% year to date, far outpacing the S & P 500's 2.7% gain this year. Devon Energy offers one of the lowest breakeven oil prices among its peers and below-average financial leverage, Credit Suisse analysts said. Meanwhile, Pioneer Natural Resources has "an unmatched depth of inventory" in the Permian Basin as well as one of the strongest balance sheets in the sector, according to Credit Suisse. Materials and industrials are also classic cyclical sectors, set to outperform the broader market amid an accelerating economy. The bank highlighted CF Industrials , Mosaic , Air Lease and XPO Logistics . Credit Suisse expects CF Industrials' favorable cost position, "best-in-class" sales and marketing, as well as logistics capabilities to lead to strong cash margins, according to the note. "MOS is poised to further execute on controllable costs and drive towards 2023 goals, offering further leverage to higher prices," the firm noted, referring to Mosaic. Credit Suisse picked out a few financial stocks for investors to ride the economic rebound. The bank is particularly bullish on Citigroup and Discover Financial Services . "With new management now in place, we expect a series of steps... all in a determination to transform Citi and raise its performance," Credit Suisse analysts said. Discover has had the best recovery so far among card issuers in terms of purchase volumes, the bank found. The company should see a recovery faster than the industry as it has lowered costs to acquire new customers, Credit Suisse noted. The list also features some popular reopening bets such as casinos, cruise line operations and retailers. Credit Suisse believes Las Vegas Sands, Norwegian Cruise Line and PVH have more room to go as the economy reopens.

A man sits on the Wall Street bull near the New York Stock Exchange (NYSE) on November 24, 2020 in New York City.

Spencer Platt | Getty Images