Here are Credit Suisse's 5 new top stock ideas for April

Published Tue, Apr 6 20212:34 PM EDT

Credit Suisse shared with its clients the firm's best current stock picks as the second quarter begins. Credit Suisse debuted the latest iteration of its "'one-stop shop' for the research team's best ideas. Every US research analyst identifies their #1 top stock pick based on a 6- to 12-month time horizon," the brokerage explained in a note. The brokerage's 'Top of the Crop' names include outperform-rated equities in which Credit Suisse has the most conviction with the least-demanding market expectations. Here are five companies that made Credit Suisse's recommended list and their price targets. 1) Amazon (AMZN) Credit Suisse likes the e-commerce giant as customers grow more comfortable buying goods online and the U.S. economy emerges from the Covid-19 pandemic. The brokerage has a price target of $3,940 on Amazon , implying 24.6% upside from Thursday's close. Analyst Stephen Ju writes: "Our Outperform investment thesis for AMZN is based on the following: 1) ecommerce segment operating margin expansion as it grows into its larger infrastructure, 2) optionality for faster than-expected FCF growth vis-à-vis its advertising segment, and 3) upward bias to AWS revenue forecasts and likely more moderate deceleration path as suggested by ongoing capital intensity in the business." 2) IBM (IBM) IBM is a top pick despite a macroeconomic outlook that may look "tough" in the first half of 2021, according to analyst Matt Cabral. Credit Suisse likes the company's newfound focus on long-term growth, aided by the planned spin-off of IBM's Managed Infrastructure Systems (MIS) business. Cabral, who has a $160 price target on IBM, writes: "Though there is meaningful work to be done [near term] in turning around IBM, given outsized on-prem exposure in a tough macro, we remain positive on the company's [long-term] opportunity in an increasingly hybrid-first world. We believe IBM is currently undervalued, and that hybrid focus and the spin-off of the MIS business will ease the path to sustained growth, which is necessary for a re-rating of the stock." 3) EOG Resources (EOG) Analyst Bill Janela recommends oil-and-gas company EOG thanks to its demonstrated ability to keep a relatively small amount of debt on its balance sheet, a unique feature among the broader exploration and production industry. His target of $80 implies over 6% price upside coupled with the company's attractive dividend. Janela told clients: "EOG is our top pick amongst US E & Ps given its longstanding commitment to financial discipline and returns-focused approach that investors are now demanding for the rest of the industry. EOG also boasts below average financial leverage, a strong execution track record, and discount valuation versus peers." 4) The Hershey Company (HSY) Hershey is set for a strong 2021 thanks to sustainable market share gains in North America and a 2% tailwind from international markets that were compromised during the peak of the Covid-19 pandemic, wrote analyst Robert Moskow. Credit Suisse's price target of $175 implies 10% upside. According to Moskow: Unlike peers, Hershey "has consistently demonstrated pricing power to offset higher input costs. Recently it has widened its competitive moat by expanding manufacturing capacity, sales force coverage, advertising spending, and e-commerce capabilities. We expect market share gains to remain elevated for the rest of 2021 because its nearest competitor, Mars, has struggled with supply chain difficulties and execution missteps." 5) Advanced Auto Parts (AAP) Analyst Seth Sigman told clients that Advanced Auto Parts it set to benefit from what Credit Suisse thinks is an improving setup in the aftermarket parts business. The brokerage's price target of $202 implies 8.6% upside from Thursday's close. Sigman writes: "The auto parts group should benefit from incremental stimulus. The category is defensive in nature, and should see higher maintenance and repair spend driven by higher average age of vehicles and growth in the number of vehicles that require aftermarket repair." — CNBC's Michael Bloom contributed reporting.

A vehicle pulls out of a parking space outside an Advance Auto Parts Inc. store in Peoria, Illinois.

Daniel Acker | Bloomberg | Getty Images

Credit Suisse shared with its clients the firm's best current stock picks as the second quarter begins.

Credit Suisse debuted the latest iteration of its "'one-stop shop' for the research team's best ideas. Every US research analyst identifies their #1 top stock pick based on a 6- to 12-month time horizon," the brokerage explained in a note.

The brokerage's 'Top of the Crop' names include outperform-rated equities in which Credit Suisse has the most conviction with the least-demanding market expectations.

Here are five companies that made Credit Suisse's recommended list and their price targets.