- Credit Suisse says Wall Street has low expectations for some highly promising stocks.
- These are actions with a rating of “superior performance”, where their analysts are especially optimistic about the consensus.
- Company analysts say 12 of the shares will rise 10% or more in the next year.
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Markets are turning upside down with rising interest rates and declining growth stocks, and moments like this may value experts’ best ideas.
The Credit Suisse team in the Americas has just launched a series of these ideas, as well as actions to be avoided, allowing its analysts to identify their most convinced names in all the main sectors of the market. They then narrowed the search by applying the company’s HOLT structure to find high-ranking stocks that faced “less demanding market expectations”.
Credit Suisse evaluated these market expectations by looking at the difference between the cash flow return on investment, or CFROI, that the market currently expects and the CFROI 12-month forecast and the companies’ five-year CFROI history.
The company’s process also included comparing analysts’ profit forecasts and target price estimates with the analyst’s consensus and measured a “bullish consensus level” based on buy, sell and maintain ratings.
They say these stocks have the potential to beat the market because of this combination of strong stock prospects and low expectations on Wall Street.
Of these 13 shares rated “superior performance”, Credit Suisse’s price targets imply that six are expected to post gains of 20% or more in the next year, and 12 out of 13 are worth at least 10%. All bullish values, ranked from lowest to highest below, were calculated based on Thursday’s closing prices.