'As good as it gets?' Barclays picks its favorite global stocks for a bumper earnings season

Published Mon, Apr 26 20219:36 PM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

Analysts at investment bank Barclays have recommended a raft of global stocks at the start of what's shaping up to be a strong earnings season. "Market sentiment on earnings has rarely been so bullish in recent years," the analysts wrote in a research note. The analysts pondered whether this reporting season could be "as good as it gets?" given positive revisions from firms on the recent economic recovery. Within the tech sector, the bank is "most optimistic" on semiconductor stocks and picked its three favorites. It is also positive on business services firms as well as metals and mining companies. Barclays favored stocks include: Semiconductor stocks Demand for silicon chips , or semiconductors, soared during the pandemic as they are components of products like TVs and tablets that people bought during shelter-in-place orders. Barclays recommends Dutch semiconductor equipment supplier ASML due to an uptick in shipments to its Chinese customer Semiconductor Manufacturing International Corporation , and the bank also likes fellow Netherlands-based firm ASM International . Both companies are suppliers to Taiwan Semiconductor Manufacturing Company , which the bank is also bullish on. It also likes German firm Aixtron . Business services stocks Barclays likes names that outperformed pre-Covid, as well as during the pandemic, and it expects two building services stocks to do well in the longer term: British plant rental company Ashtead and plumbing products distributor Ferguson , which operates in North America. "Ashtead and Ferguson double-up as prime beneficiaries of an economic recovery, but also have demonstrably attractive growth stories and strong management teams," the analysts said. The bank also likes Ashtead's strong balance sheet and investment during the pandemic, and picked Ferguson as benefiting from a "buoyant" home improvement market. Metals and mining stocks "Miners remain attractive as a relatively cheap 'value' sector exposed to growing demand. Stocks look cheap," Barclays' analysts stated. Value stocks are those deemed to be underappreciated by the wider market. "China demand looks well supported in most of the key commodity-intensive sectors, i.e. Property, infrastructure, machinery and autos. Western world stimulus shows no sign of abating," the bank added. Mining firm Anglo American is the analysts' "highest conviction" pick in the sector, due to volume growth that "outstrips all peers." It is trading at a discount to its peers, the bank said. It also likes Norwegian aluminum firm Norsk Hydro , which is looking "very cheap" to Barclays, which suggested the market hasn't yet priced in the sale of its rolled products division, and is also "overweight" on mining company Glencore given that incoming CEO Gary Nagle is likely to be more favorable to shareholders. —CNBC's Sam Shead contributed to this report

Integrated circuits on a circuit board.

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Analysts at investment bank Barclays have recommended a raft of global stocks at the start of what's shaping up to be a strong earnings season.

"Market sentiment on earnings has rarely been so bullish in recent years," the analysts wrote in a research note. The analysts pondered whether this reporting season could be "as good as it gets?" given positive revisions from firms on the recent economic recovery.

Within the tech sector, the bank is "most optimistic" on semiconductor stocks and picked its three favorites. It is also positive on business services firms as well as metals and mining companies.

Barclays favored stocks include: