These surprising stocks are poised to be 'likely winners,' analysts say

Published Sat, Dec 11 20217:49 AM EST

Wall Street analysts named a wide range of stocks this week that are well positioned to come out on top, even as inflation, supply chain issues and the omicron variant continue to cause havoc. These companies represent a tremendous buying opportunity and are firing on all cylinders heading into the end of 2021 and beyond, analysts said. CNBC Pro combed through recent Wall Street research to find stocks with upside now and in the future. They include Disney , Abbott Laboratories, SmartRent, Hertz and Kosmos Energy . Hertz There's no inflation or supply chain issues for the auto rental company, JPMorgan analyst Ryan Brinkman said earlier this week. The firm initiated coverage of Hertz with an overweight rating and said the company is the right stock at the right time. "Hertz benefits from a number of very strong macroeconomic and industry tailwinds — an investment in HTZ offers investors substantial upside exposure to potentially higher than expected inflation," the firm said. Brinkman said the semiconductor shortage has created real "winners and losers," and Hertz is poised to capitalize. "Car rental companies are the best positioned amongst all subsectors within the auto industry at the moment, owing to the semiconductor chip shortage which has caused the price of used vehicles to soar and which has led to an imbalance of supply and demand for rental cars," he added. Shares of the company are up 3.1% this month. Abbott Laboratories Shares of the medical technology and healthcare company are up over 5% since Atlantic Equities analyst James Mainwaring, upgraded the stock to overweight from neutral on Oct. 27. The investment firm called Abbot Laboratories "a likely winner in an uncertain world" in a note to clients this week. Mainwaring said the company is a top pick in 2022 and "well positioned for most eventualities." In particular, Abbott has a diverse portfolio, and its medical technology division is not reliant on an increase in elective surgery, according to the firm. "As a result, Abbott's portfolio should continue to grow despite COVID-19 pressures on health-care systems," Mainwaring said. The jump in coronavirus testing due to the omicron variant should also drive "meaningful upside" for the stock, he wrote. "We also see its Diagnostic division as having strong long-term growth potential, as it builds out its rapid testing portfolio, while in the short-term we believe its rapid COVID-19 testing products can drive the business to beat near-term consensus estimates," the firm said. SmartRent "With a skyscraper-sized total addressable market, [the] growth opportunity is robust," Deutsche Bank analyst Sidney Ho said in his recent note kicking off coverage of SmartRent. The smart-home solutions provider, which primarily serves the multifamily rental sector, has long been in an "underserved" market, according to Ho. "Given its positioning in the massive opportunity in the multifamily space, opportunity for [average revenue per user] expansion and incremental deployments in other real estate asset classes (e.g., student housing), we believe SmartRent is well positioned to grow at a 100%+ revenue [compound annual growth rate] in the near-term," he said. Ho went on to say the stock is especially well positioned due to SmartRent's "strong relationships with the largest customers in the multifamily industry, open architecture platform and focus on the larger retrofit market." The stock's valuation is also attractive and not reflective of the outsized growth potential, he added. "A likely winner in a very large market," Ho wrote. Shares were up over 13% on the week. Kosmos Energy - Bank of America, Buy rating "Bright 2022 ahead: long-term winner, too. … We roll forward our valuation basis to YE22 and raise our PO to $6.40. Reiterate Buy on differentiated gas growth story. … We see Kosmos as a well-positioned E & P with a differentiated equity story via its LNG position, set to begin production and grow from 2023. It has a diverse production base, and we favor its infrastructure-led strategy for growth." Disney - Loop, Buy rating "We are lowering our FY2022 and FY2023 earnings estimates and reducing our price target to $190 from $205, but maintain our Buy on DIS because we believe streaming will continue to rapidly take share from linear viewing and believe DIS has the content, brands and service to be one of the global winners. … The level of spending by DIS and NFLX will make the streaming business increasingly more challenging for companies competing with a global, four-quadrant offering." SmartRent - Deutsche Bank, Buy rating "With a skyscraper-sized TAM, growth opportunity is robust. … A likely winner in a very large market...we believe SmartRent's strong relationships with the largest customers in the multifamily industry, open architecture platform and focus on the larger retrofit market, make it one of the likely winners in the overdue adoption of smart-home technology in the multifamily space. Given its positioning in the massive opportunity in the multifamily space, opportunity for ARPU expansion & incremental deployments in other real estate asset classes we believe SmartRent is well positioned to grow at a 100%+ revenue CAGR in the near-term." Hertz - JPMorgan, Overweight rating "Hertz benefits from a number of very strong macroeconomic and industry tailwinds — an investment in HTZ offers investors substantial upside exposure to potentially higher than expected inflation. … Car rental companies are the best positioned amongst all subsectors within the auto industry at the moment, owing to the semiconductor chip shortage which has caused the price of used vehicles to soar and which has led to an imbalance of supply and demand for rental cars. The global semiconductor shortage has roiled the automotive industry over the past year, creating disparate winners and losers." Abbott Laboratories - Atlantic Equities, Outperform rating "A likely winner in an uncertain world. … We also see its Diagnostic division as having strong long-term growth potential, as it builds out its rapid testing portfolio, while in the short-term we believe its rapid COVID-19 testing products can drive the business to beat near term consensus estimates. … As a result, Abbott's portfolio should continue to grow despite COVID-19 pressures on health-care systems. … 1H22 top pick, a name well positioned for most eventualities."

The desk of car rental company Hertz is seen at Nice International airport during the coronavirus disease (COVID-19) outbreak in Nice, France, May 27, 2020.

Eric Gaillard | Reuters

Wall Street analysts named a wide range of stocks this week that are well positioned to come out on top, even as inflation, supply chain issues and the omicron variant continue to cause havoc.