Here are JPMorgan's top picks for each industry in 2024

Published Mon, Jan 8 20243:02 PM ESTUpdated Mon, Jan 8 20243:21 PM EST

JPMorgan analysts have top picks for investors across multiple major sectors for the new year. Unless the Federal Reserve begins a "rapid" interest rate easing cycle, traders should anticipate a more challenging macro environment for stocks, according to Nicholas Rosato, the firm's head of North American equity research. That's because consumer trends are weakening as investor sentiment reverses. Taken all together, he said stocks are richly valued with volatility at notable lows, even as risks tied to foreign and domestic politics remain elevated. Equities kicked off the year on a sour note, with the S & P 500 snapping a nine-week winning streak on worries of rising rates and overvaluation in the market. Given this backdrop, Rosato's team scavenged for compelling investment ideas across growth, value and short strategies that can do well going forward. CNBC Pro compiled 16 of the firm's top picks: Big Technology's Amazon and Microsoft both made the list. It comes after a banner 2023 for mega-cap tech names, with the "Magnificent Seven" driving the market higher amid the artificial intelligence boom. In the same vein, Amazon and Meta surged more than 80% and 190%, respectively, in 2023. Still, Wall Street sees more upside ahead. Both have buy ratings from the typical analyst, per LSEG, formerly known as Refinitiv. The average price target implies Amazon can gain nearly 22% over the next 12 months, while Microsoft can add almost 11%. MSFT AMZN 1Y mountain Microsoft and Amazon shares over the last year Eli Lilly is another stock on the list that benefited from broad market tailwinds in 2023. The pharmaceutical giant jumped almost 60% last year as skyrocketing interest in weight loss drugs put its tirzepatide drug in the spotlight. But analysts see relatively muted gains ahead after last year. In addition to having a buy rating, the average analyst polled by LSEG anticipated just around 3% upside over the next year. Last week, the company announced a website offering telehealth prescriptions and direct home delivery. Drugs on the site include Zepbound, its popular weight loss treatment. Wall Street expectations can vary widely for these names, even within the same industries. Within energy, Array Technologies is slated to add almost 73%, while CMS is poised to gain just over 3%, according to average price targets compiled by LSEG. Array's potential for a massive upside comes on the heels of a losing year for shares. While Array shares struggled in 2023, JPMorgan said the company has a "very robust" product pipeline. ARRY 1Y mountain Array shares over the last year Domino's Pizza is one consumer name that made the list. The stock underperformed the broader market in 2023, finishing up by 19%. The average analyst anticipates upside of nearly 8% and has a buy rating. One of those bullish analysts is UBS' Dennis Geiger, who named the pizza chain a top pick for 2024 last week. Geiger's $480 price target implies shares can climb 20% from Friday's closing level. "Further upside exists for shares as DPZ should be one of the few restaurants with accelerating [same store sales] & unit growth, positive traffic, and a compelling catalyst path, w/ room for additional valuation re- ratings," Geiger wrote to clients. He also called Domino's a "value leader" with elevated brand loyalty.