Here are Bank of America's favorite stocks for 2022

Published Wed, Dec 29 202111:01 AM EST

Bank of America has selected its favorite stocks going into 2022. Every year the bank picks one stock from each of the major sectors in its coverage universe based on themes in focus for the year ahead. Each of them has a buy rating from the firm and at least 23% implied upside to its analysts' price targets as of Dec. 16 and an average dividend yield of 2.2%. "These stocks are mostly neglected by active funds and benefit more from inflation, higher GDP, higher interest rates, higher oil prices and wage growth than an equal-weighted 11 sector portfolio, all of which we expect will occur in 2022," Savita Subramanian, equity and quant strategist at Bank of America Securities said in a recent note. Here are some of the stocks the bank likes for next year: The one repeat stock on the list is Disney . Its shares are down about 14% for the year, but the company's parks, cruise and movie businesses stand to benefit from reopening momentum, according to the firm. The bank reiterated Disney as a buy last week despite its poor performance for the year, saying the stock is now a "show me" story . "Following the disappointing forward fourth-quarter results, we believe Disney has become a 'show me' story as investors await signs of Disney+ net adds to re-accelerate and theme parks to show operating leverage as attendance improves," the firm said. CVS Health , Wells Fargo , the snacking conglomerate Mondelez International and cloud security firm F5 are also some of the bank's favorites. CVS has been a favorite of several Wall Street analysts, who are keen to see its earnings benefit from vaccines and are excited about the stock's long-term growth as CVS expands further into the health-care sector. Its shares have gained roughly 50% this year. With the Federal Reserve eyeing three interest rate hikes in 2022, investors are turning their attention to financial stocks, among other cyclical sectors – and Bank of America likes Wells Fargo in particular, saying it "likely benefits more from higher rates than other banks." Wells Fargo shares have risen about 60% this year.

A statue of Walt Disney and Mickey Mouse stands in front of the Cinderella's castle at Walt Disney World's Magic Kingdom in Lake Buena Vista, Florida.

Matt Stroshane | Bloomberg | Getty Images

Bank of America has selected its favorite stocks going into 2022.