Bank of America says these fallen stocks are due to rebound later this year

Published Fri, Mar 4 20222:13 PM ESTUpdated Fri, Mar 4 20226:32 PM EST

Bank of America thinks these fallen stocks are ripe for a rebound this year even amid a volatile market. In a note Tuesday, the bank outlined 13 stocks across eight sectors that have underperformed the S & P by at least 20% since the Nasdaq's November peak. All of the stocks "offer future revenue growth and can fare well even with slower economic growth," the note said. Investors have shied away from market risk as they brace for impending rate hikes from the Federal Reserve. Along with inflation, the market also is being affected by Russia's Ukraine invasion, which has sent oil prices skyrocketing. Year to date all of the major U.S. indexes are down. The S & P 500 is off more than 9%, the Dow Jones Industrial Average about 8%, and the tech-heavy Nasdaq Composite has plummeted roughly 15%. Despite the ongoing sell-off, Bank of America thinks some stocks will increase revenue. Lululemon , CarMax , Spotify and technology giants Meta and Block are listed among its picks. All of them are squarely in negative territory year to date. Here are some of the stocks that made the cut and their price targets, according to Bank of America: Lululemon, which is down more than 18% year to date, will continue to get a lift from the shift to casual wear and its expansion into international markets like China, analyst Lorraine Hutchinson wrote. She has a price target of $420 on the company, which is about 30% upside from Thursday's closing price. Though Meta's shares have plummeted since the company reported fourth-quarter earnings in February, the company's Facebook and Instagram remain two of the most popular social networking sites, wrote analyst Justin Post. He expects revenue growth as Meta combats Apple's privacy changes, which have disrupted business. The analyst gave the company a price target of $333, which represents about 64% upside from Thursday's close. Last month, Bank of America analysts upgraded Block to a buy rating. Analyst Jason Kupferberg is eyeing how the company integrates Afterpay, which it bought for $29 billion in August . He's looking to the company's upcoming investor day and first-quarter results for signs of growth and thinks the market is undervaluing Block's Cash App business, he wrote. Kupferberg has a $157 price target on Block; the company ended Thursday's trading session at $114.22.

People line up to enter a store during Black Friday shopping at Fashion Outlets of Chicago in Rosemont of Greater Chicago Area, Illinois, the United States, on Nov. 26, 2021.

Joel Lerner | Xinhua News Agency | Getty Images

Bank of America thinks these fallen stocks are ripe for a rebound this year even amid a volatile market.