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Even as stocks soar to new highs, investors can still find stocks with good upside potential, according to Bank of America. This week, the company named a number of companies that analysts say have room to grow. CNBC Pro has combed through Bank of America’s research to find stocks rated buys that are poised to outperform. These include CrowdStrike, Emerson Electric, Progressive, Rollins, and O’Reilly Automotive. “Improved portfolio, increased visibility = increased investor interest,” analyst Andrew Aubin said after a series of investor meetings with Emerson Electric. “The message about an improving growth and earnings profile is particularly compelling in our view,” he said. The analyst noted that Emerson has a strong pipeline of reliable products and that the company has not seen any negative macro impact. Additionally, the company says Emerson is well-positioned for upside and synergies after completing its acquisition of National Instruments last fall. Aubin also raised his price target from $120 to $130 per share, which is now in line with street highs. “Emerson remains one of our sector’s top candidates,” he said. The company’s stock price will rise 13% in 2024. “This stock is below the bees’ knees, but it’s still a buy,” Rollins analyst Jason Haas said of the exterminator. He noted that Rollins is well-positioned for “recession resilience” in the coming months, among many other positive catalysts. “Pest control is one of the last things homeowners and business owners do during a recession,” Haas wrote. The analyst praised the company’s management, noting its focus on expanding profits. Additionally, Haas likes Rollins’ diversified business that spans three areas: commercial, termite and residential. Meanwhile, the company’s stock is up just 4% this year, and the company says it’s highly undervalued. Haas also believes pest control companies can perform well during economic crises. “It’s a compounding company that continues to grow at a high rate throughout the economic cycle,” he said. Further growth is on the horizon for auto insurers, according to analyst Joshua Shanker. Progressive recently held its quarterly earnings call, and Shankar came away feeling even more bullish about the buying opportunity. The company said the stock appears to be undervalued and has likely escaped investors’ attention. “Progressives are probably the least volatile stocks in the S&P 500 that can deliver exceptional stock performance,” he said. The company says its stock price, up nearly 25% this year, is too attractive to ignore. “While some may argue that Progressive stocks look expensive, the stock is trading in line with its historical range on both absolute and relative multiples,” Shankar wrote. Additionally, the analyst raised his price target from $256 to $261 per share, the highest price ever. “We reiterate our buy recommendation due to ample upside potential, healthy business momentum, and low risk relative to the broader market and peers,” Shankar said. CrowdStrike “We remain positive on CrowdStrike’s long-term growth opportunity and market leadership across endpoint security. Based on 19x FY26E EV/Sales and 17x prior to reflect CrowdStrike’s growth. , we repeat the purchase, raise our estimate, and raise our PO from $365 to $400.” A strong runway for growth over the next 12 months. ” O’Reilly Automotive “We continue to view ORLY as the best-in-class operator in the automotive aftermarket, which has historically been sensitive to macro factors, so we rate it a buy based on a 24-year P/E ratio of 30x and a 1,250 The dollar PO reiterates: “The broader consumer goods sector. Within this defensive but growing category, ORLY is poised to deliver both stronger growth and higher margins than its auto parts retailer peers. Progressive PGR is perhaps the least volatile stock in the S&P 500 and may be able to deliver exceptional stock performance. …While some may argue that PGR stock looks expensive, the stock is trading in line with its historical range on both absolute and relative multiples. … We reiterate our Buy recommendation, with plenty of upside potential, healthy business momentum, and lower risk than the broader market and peer stocks. … The message about improving growth and profit profiles is particularly persuasive. … Emerson remains one of the top prospects in the sector. …We see potential upside as the company leverages National Instruments synergies. In our view, the transition to a pure industrial automation company should lead to higher valuation multiples over time. ” …A compounding company that achieves high growth throughout the business cycle. …Buy now for recession resilience and profit expansion plans. … Pest control is one of the last things homeowners and business owners do during a recession. …We believe the risks to Rollins’ growth trajectory (weak housing market, recession, competition, weather, etc.) are limited and therefore believe the stock deserves a premium multiple. ”
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