These industrial stocks should get a jolt from Biden's $2 trillion infrastructure plan

Published Wed, Mar 31 20211:34 PM EDT

Details just came out about President Joe Biden's $2 trillion infrastructure bill, and for investors looking for how to play the massive spending, here are the most-loved industrial stocks on Wall Street. The plan outlined Wednesday would pour billions into transportation infrastructure such as bridges, roads, public transit, ports, airports and electric vehicle development. The proposal also would use billions to improve drinking-water infrastructure, expand broadband access and build and retrofit affordable housing. Roughly $2 trillion in spending would be spread over eight years, with the corporate tax rate increased to 28% to fund it. In light of all the spending, investors might want to consider stock picks in the industrial space. CNBC PRO screened for Wall Street's favorite stocks in the S & P 1500 Composite Industrials index. The list includes industrial names with more than 70% of analysts calling them a buy. Plus, we weeded out names with less than four analysts covering the equity. CNBC PRO's list also includes stocks that are forecast to gain at least 10% over the next 12 months. Take a look at the list here. CNBC PRO's list is made up of utilities, industrials, consumer cyclicals, materials and business services stocks. Solar power company Sunrun has the most upside to its 12-month price target: 55.8%. Plus, 80% of the analysts that cover Sunrun have a buy rating on the stock. Shares of Sunrun had a stellar 2020, gaining 402% amid broad strength in the clean energy space. That momentum continued into 2021 as Democrats taking control of Congress spurred hopes of supportive policies for green energy, like Biden's infrastructure plan. Other names i ncluding Mercury Systems , IAA , Generac Holdings , Quanex Building Products , Curtiss-Wright and Chart Industries made CNBC PRO's list. The Biden infrastructure stimulus plan includes $213 billion to build and renovate more than two million affordable homes and commercial buildings. "A plan to build 2 million affordable homes over 8 years and a call to approve another bill that would renovate 500,000 affordable homes. While passage of the full plan is questionable, the construction number above would provide a notable add to the industry," Truist equity analyst Keith Hughes told clients. The Wall Street firm said this should set homebuilders s uch as Builders FirstSource up for outperformance. Builders FirstSource has more than 20% upside to its average price target and more than 90 of its analysts calling it a buy. Logistics & defense XPO Logistics is another well-liked industrial name. JC O'Hara, chief market technician at MKM Partners, said that while transports stocks such as FedEx "have been the backbone" to the economic recovery, his favorite was XPO Logistics . "I like this transportation company because the longer-term chart is extremely bullish. It broke out last December, consolidated over the last three months, and it has pulled back to buyable levels at $115," O'Hara told CNBC last week. XPO, which recently announced plans to spin off its massive logistics business , also could be a short-term play, O'Hara said. Dycom Industries , CACI International , T imken , AAR Corp , Science Applications International , Howmet Aerospace , SPX , MasTec and SkyWest also made the most-loved industrial stocks list. Leidos is an information technology company that gets a large chunk of its revenues from the defense and health care sectors. It has made some big acquisitions in recent years, including buying the information systems segment of Lockheed Martin in 2016 for about $4.6 billion and a $1.65 billion deal for Dynetics that closed last year. Plus, more than three quarters of the analysts that cover Leidos call it a buy. The stock has an average upside to its 12-month price target of nearly 20%. Defense contractor L3Harris also earned a spot on CNBC Pro's list. More than 70% of the analysts that cover L3Harris call it a buy, and the stock has an average upside of more than 14% over the next year. — with reporting from CNBC's Michael Bloom.

XPO Logistics

Source: XPO Logistics