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The stock market has fared well so far, with the S&P 500 index rising above 5,000 this month. However, continued political tensions and uncertainty over when the US Federal Reserve will cut interest rates have raised questions about which sectors will perform well, with many market participants predicting that 2024 says it will be a year of stock selection. David Sekera, chief market strategist at Morningstar, agrees. He said the market has “always been a stock-picking market,” but that this year is even more relevant. “You can look at individual stocks across several themes over the past few years and see which ones have actually outperformed the overall market,” he said on CNBC Pro on Feb. 2. He told CNBC Pro on the 2nd. Right down to individual stock selection. ” Sekera is bearish on the consumer defense sector, saying it is “probably well valued” at this point. But he does have one name that stands out as a great play for him. Kraft Heinz is an American food company. Morningstar gives the company a five-star rating, and Sekera said the company has a healthy dividend yield and trades at a 34% discount to Morningstar’s fair value. The financial services company gives stocks his 1 star to his 5 star rating, with a 5 star rating indicating that the stock is undervalued. “The company’s individual costs have increased over the past few years because the U.S. inflation rate has been very high, and to some extent our own price increases have also been delayed,” Sekera said. “With inflation currently trending toward moderation, we believe price increases could catch up with costs and return to historically more normalized margins.” The decline came after the company’s sales came in at $6.86 billion, below LSEG’s consensus estimate. However, adjusted earnings per share came to 78 cents, beating expectations of 77 cents. Over the past 12 months, Kraft Heinz stock has fallen by nearly 13%. Of the 23 analysts covering the stock, 11 have rated it a buy or overweight, and 12 have rated it a hold. The stock has an average price target of $39.40, with a potential upside of 13.2%, according to FactSet data. Opportunities in healthcare The healthcare sector is also “very overvalued,” but there are plenty of opportunities, Sekera said, citing Medtronic and GSK as two of his favorite stocks. “Medtronic is a 4-star rated stock, trading at a 25% discount, and is a high-quality company, and our equity team is perhaps the best-positioned as the baby boomer generation continues to age. “We consider ourselves one of the medical technology companies,” he said. Medtronic stock has declined approximately 0.45% over the past 12 months. Of the 33 analysts covering the stock, 15 rate it a buy or overweight, 16 rate it a hold and two rate it a sell, with a target price of $91.08, according to FactSet data. It is rated. This implies a potential upside of 7.9%. Sekera pointed out that GSK is trading at a 27% discount to London Stock Exchange-listed companies. The company is undervalued, Sekera said, and the Morningstar team believes the market is “probably overestimating the legal costs of the company’s product, named Zantac, which is used to treat heartburn.” said. Some manufacturers and pharmacies banned Zantac in 2019 due to concerns that its active ingredient, ranitidine, breaks down over time to form NDMA, a carcinogenic chemical, according to a Reuters report. Sales have been discontinued. As a result, the company faced several lawsuits, the latest of which was scheduled to go to trial on February 20th. The case was subsequently dismissed after a confidential settlement was reached, GSK announced on February 1. Over the past 12 months, the company’s stock price has increased by approximately 12.5%. Of the 23 analysts covering the stock, 11 are buy or overweight, nine are hold, and three are sell or underweight, with an average price target of £1,781.77, according to FactSet data. 2110.23 dollars). This leaves about 6.3% upside potential.
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