Analysts recommend these long-term investments in an uncertain environment.
The stimulus-driven, post-pandemic stock market rally came to a screeching halt in 2022. Fortunately, inflation is now trending steadily lower following nearly a year of aggressive Federal Reserve interest rate hikes. The U.S. housing market has cooled and earnings growth has slowed, but investors are increasingly optimistic that the U.S. economy can avoid a severe recession in 2023. In such an unpredictable environment, investors are seeking the comfort of high-quality, long-term investments. Here are seven long-term stocks to buy that Bank of America analysts recommend which also have A+ quality ratings from S&P Global Market Intelligence.
Visa Inc. (ticker: V)
Visa is a global leader in credit card, digital and mobile payments and operates the world’s largest retail electronic payment network. Analyst Jason Kupferberg says Visa exceeded high expectations in its fiscal first quarter, and U.S. payments volume accelerated in the first three weeks of the second quarter. Kupferberg says Visa has a recession-resistant business model and reasonable valuation. In addition, the company will benefit from the ongoing secular shift away from cash and check payments to credit card, digital and mobile payments. Bank of America has a “buy” rating and $260 price target for V stock, which closed at $228.88 on Feb. 13.
UnitedHealth Group Inc. (UNH)
UnitedHealth is the largest U.S. managed health care firm, providing health plans and health care services to a wide range of customers. Analyst Kevin Fischbeck says UnitedHealth’s improved medical loss ratio in the fourth quarter demonstrates its business is on solid ground. UnitedHealth is trading at a valuation premium to the S&P 500, but Fischbeck says there’s no reason for earnings multiple compression given UnitedHealth has strong business momentum across all its segments. He says the company’s Optum business is a differentiated growth source. Bank of America has a “buy” rating and $650 price target for UNH stock, which closed at $495.35 on Feb. 13.
Mastercard Inc. (MA)
Mastercard is a leading credit card and digital payments network. Kupferberg says Mastercard followed up a strong fourth quarter with encouraging trends in the opening weeks of 2023, and China’s post-pandemic reopening could serve as a strong tailwind to Mastercard’s cross-border payments business. Like Visa, Kupferberg says Mastercard has an impressive, diversified business model that is recession-resistant, and the company has an attractive cash flow profile and balance sheet. In addition, the secular shift to credit card, digital and mobile payments will drive revenue growth. Bank of America has a “buy” rating and $425 price target for MA stock, which closed at $370.83 on Feb. 13.
Home Depot Inc. (HD)
Home Depot is a leading North American home improvement retailer. Home Depot shares also have the highest dividend yield on this list at 2.4%. The housing market boom that occurred during the pandemic cooled in 2022 as Fed rate hikes made mortgages less affordable. However, analyst Elizabeth Suzuki says Home Depot has raised prices to maintain overall same-store sales growth in a difficult environment. She says Home Depot is the dominant player in home improvement, a market that remains immune to online competition. Bank of America has a “buy” rating and $360 price target for HD stock, which closed at $323.53 on Feb. 13.
Thermo Fisher Scientific Inc. (TMO)
Thermo Fisher Scientific produces analytical instruments and provides laboratory services for life sciences, pharmaceutical and industrial applications. Analyst Derik de Bruin says the company’s core demand remains robust despite declines in COVID-19 testing. In fact, core sales were up 14% in the fourth quarter, excluding COVID tests. Bank of America projects a return to double-digit earnings growth in 2024, and de Bruin says Thermo Fisher is in “a league of its own” given its potential to gain market share from both biopharma services and tools peers. Bank of America has a “buy” rating and $650 price target for TMO stock, which closed at $575 on Feb. 13.
Accenture PLC (ACN)
Accenture is a leading global system integrator that provides consulting, technology and outsourcing services. Accenture shares have taken an 18.1% hit in the past year, making it the worst-performing stock on this list. However, Kupferberg says Accenture is demonstrating the strength of its diverse revenue streams, and the company recently reiterated its fiscal 2023 revenue growth guidance despite a difficult macroeconomic environment. Accenture’s growth rate is more than double its industry peers, and Kupferberg says it is a best-in-class information technology services provider. Bank of America has a “buy” rating and $350 price target for ACN stock, which closed at $288.35 on Feb. 13.
Lowe’s Cos. Inc. (LOW)
Lowe’s is another leading home improvement retailer. The stock’s forward earnings multiple of 14.8 is the lowest on this list, potentially making it a particularly attractive buy for value investors. Suzuki says Lowe’s will also benefit from the same tailwinds driving Home Depot’s long-term outperformance. She says CEO Marvin Ellison and the rest of the management team that joined the company in 2018 deserve credit for the stock’s outperformance. In fact, Lowe’s total shareholder return has doubled the S&P 500’s since 2018. Bank of America has a “buy” rating and $278 price target for LOW stock, which closed at $214.14 on Feb. 13.
7 best long-term stocks to buy right now:
— Visa Inc. (V)
— UnitedHealth Group Inc. (UNH)
— Mastercard Inc. (MA)
— Home Depot Inc. (HD)
— Thermo Fisher Scientific Inc. (TMO)
— Accenture PLC (ACN)
— Lowe’s Cos. Inc. (LOW)
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7 Best Long-Term Stocks to Buy Right Now originally appeared on usnews.com
Update 02/14/23: This story was previously published at an earlier date and has been updated with new information.
