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Analysts Say These 3 Stocks Are Their Top Picks for 2021
The year is winding down, and most of us would say ‘good riddance.’ Is there evidence that the markets are getting back onto an upward track? The summer saw big gains on Wall Street, perhaps a bubble, but definitely a bull market. September saw it slip off track, October has seen a partial recovery, while November started with a bang — or to be more precise, a boom.Some of Wall Street’s analysts see the remaining time for some smart stock plays in a volatile environment, and they are tagging their top picks to start the new year on a high note. Let's take a closer look.SVB Financial Group (SIVB)The first stock on the list is Silicon Valley’s largest deposit holding bank. SVB Financial Group is the holding company owning Silicon Valley Bank, a commercial bank specializing in high-tech venture capital. Since its founding in the 1980s, SVB has provided funding for more than 30,000 start-ups, and has also become a major financial services provider for Napa Valley’s vineyards.Working in the high-wealth areas of the San Francisco Bay region, and maintaining offices in other financial centers around the world – London, Hong Kong, and Toronto, among others – Silicon Valley Bank was well-positioned to weather the corona crisis. The bank’s revenue has been rising through 2020, from $807 million in Q1, to $860 million in Q2, to $1.08 billion in Q3. Earnings, after a sequential slip entering Q1, have also been on an upward track; the Q3 EPS came in at $8.47, beating the forecast by 55%.The bank’s shares have reflected the strong financial performance. SVB is up 27% year-to-date, having bounced back from the mid-winter market crash.Covering SIVB for Maxim, analyst Michael Diana writes, “SIVB remains our top bank pick due to: 1) its unique, non-replicable franchise; and 2) the growth implications of that franchise… The environment for VC-backed companies has improved, in our view, especially for the technology and life sciences companies that are SIVB's focus… we expect that SIVB's deposits, loan volumes, and investment/warrant gains should all benefit in 2021.”Diana rates SIVB as a Buy, and his $335 price target implies another 10% gain for the year ahead. (To watch Diana’s track record, click here)Overall, SVB Holdings has a Moderate Buy rating from the analyst consensus, based on 13 recent reviews, including 10 Buys, 2 Holds, and 1 Sell. (See SIVB stock analysis on TipRanks)Danaher Corporation (DHR)The second stock on the list is a conglomerate, a globally diversified company based in Washington, DC. Danaher works in the science and technology field, bringing together a range of companies through acquisitions and partnerships. Danaher operates three business segments, Life Sciences, Diagnostics, and Environmental & Applied Solutions.Danaher has performed well through 2020, repeating its normal pattern of rising earnings from Q1 – but on steroids. The first quarter EPS was low, at $1.05, but quickly rose to $1.44 in Q2 and then $1.72 in Q3. The third quarter result was 25% higher than expectations. Revenues followed a similar path, gaining from $4.3 billion in Q1 to $5.9 billion in Q3.DHR shares have heavily outperformed the overall markets this year, rising nearly 60%.Doug Schenkel, 5-star analyst from Cowen, sees Danaher benefitting directly from the current pandemic situation and, as a result, moves the stock to a Top Pick.“We believe DHR has one of the best product portfolios among the Tools group to address the current COVID-19 challenges (bioprocessing, Dx). Over the next several quarters, a double-digit pro forma core revenue growth rate appears attainable, in part driven by these COVID-19 solutions. Looking beyond the current pandemic, we believe management commentary on the evolution of the business portfolio, strategy to extract durable revenue from near-term COVID-19 driven demand, and M&A capacity (we estimate ~$15B+ over the next 12 months) should help build confidence that DHR is now plausibly built to generate sustainable HSD core revenue growth. This would be an impressive growth profile for a nearly ~$200B market cap Tools company and is well above current consensus estimates.” Schenkel opined. Schenkel, who is rated 56 of more than 7,000 analysts in the TipRanks database, rates DHR shares as an Outperform (i.e. Buy). His price target of $275 indicates an upside of 12% in the next 12 months. (To watch Schenkel’s track record, click here)Overall, Danaher boasts a Strong Buy analyst consensus rating, and it is unanimous – the stock has received 6 Buys in recent weeks. (See DHR stock analysis on TipRanks)Boston Beer (SAM)The last stock on the list today is one you may be familiar with. Boston Beer is the owner of Sam Adams, the popular brew named after the Colonial-era patriot. Boston Beer is the fourth largest brewery in the US, boasted $1.33 billion in revenue for 2019.So far, 2020 has been a good year for Boston Beer. To put it bluntly, the social lockdown policies keeping people at home caused many of them to turn to beer for comfort, and Boston Beer has a well-liked flagship brand. The company’s earnings have risen steadily this year, from $1.32 in Q1 to $6.10 in Q3. At the top line, revenues have moved from $330 million in the first quarter, to $492 million in the third.Of the stocks on this list, Boston Beer has shown the strongest year-to-date share appreciation. The stock has almost tripled, gaining 183% despite all the vicissitudes of 2020.Cowen analyst Vivien Azer, who holds 5 stars with TipRanks, has reviewed the company's latest Q3 results and was duly impressed. As a result, Azer reiterated SAM as her Top Pick.“SAM handily beat our above-consensus est. for 3Q (historically their biggest EPS quarter, at 40% of 2019)… the company expects *all* of their brands to grow in 2021… Despite the reality of COVID uncertainty, select nuances inform the company's ahead-of-expectation outlook: 1) delayed shelf sets… 2) line of sight in terms of in-house and outsourced capacity and 3) an outlook for a doubling of hard seltzer,” Azer wrote.In line with her upbeat outlook, Azer rates the stock as a Buy along with a $1,250 price target. Her target suggests an upside of 17% over the coming year. (To watch Azer’s track record, click here)Overall, SAM shares get a Moderate Buy rating from the analyst consensus on Wall Street. The stock has 9 recent reviews, breaking down to 6 Buys and 3 Holds. (See SAM stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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