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Wall Street analysts unveiled a slew of must-own stocks this week even as bank and macroeconomic worries permeate the market. While some investors might be distracted by the ongoing financial turmoil, analysts say there are plenty of quality buying opportunities. CNBC Pro combed through the top Wall Street research to find stocks to buy in a tough macro environment. They include: TrueCar, Apple, Progressive, Academy Sports and Prosperity Bancshares. Apple Morgan Stanley is doubling down on Apple shares. The firm said in a note that it’s even more bullish on the stock after hosting its recent annual technology, media and telecom conference. “We see 5 underappreciated catalysts that can drive a re-rating over the next 12 months, cementing Apple as our Top Pick with new $180 PT,” said analysts led by Michelle Weaver and Erik Woodring. They cited Apple’s “reaccelerating iPhone and Services growth, record gross margins (we see the greatest inflection in F1H24), two new product launches, and the potential introduction of an iPhone subscription program.” To be sure, the near-term macro backdrop looks rough as consumers pullback spending in areas like electronics, the firm said. But, patient investors will be rewarded, they said. “Relative to the rest of our large cap Hardware coverage, no other company has as many important catalysts, similar upside vs. Consensus estimates, or commensurate upside to our price target as Apple,” they went on to say. Apple shares are up almost 20% since the start of the year. However, over the past year, shares are down down about 3%. Prosperity Bancshares Investment firm DA Davidson upgraded the regional bank to buy from hold earlier this week. The firm says Prosperity is being unfairly punished in the wake of the Silicon Valley Bank collapse. Shares are down about 16% this month. Analyst Peter Winter said issues arising from Silicon and others are “idiosyncratic” and “have no bearing on PB.” “PB has a long-standing credit culture of conservative underwriting, and being very risk adverse through cycles,” he said. It also has a robust balance sheet and “plenty of upside over [the] next 12 to 24 months,” according to the firm. Winter also called the Houston-based bank a “flight to quality name.” “Given the increased risks of a deeper recession, PB is a great defensive stock given its low risk balance sheet, strong deposit franchise, and peer leading capital ratios,” he wrote. Progressive The auto insurer has major upside, according to Wells Fargo. The firm double upgraded Progressive to overweight from equal weight earlier this week, and says it’s the right stock at the right time for investors. “PGR is a defensive insurer with low investment leverage and a conservative investment portfolio,” analyst Elyse Greenspan wrote. Progressive, which reports earnings monthly, unveiled mostly mixed results earlier this week. “The shares traded down post earnings and we believe this provides a good entry point,” she added. The firm noted that PGR shares outperformed the S & P 500 in 2008 by 16%. The stock is up just over 5% this year and Greenspan raised her price target to $158 per share from $116, or about 15% from where it’s currently trading. Greenspan also says auto policy growth has picked up in a big way and that should lead to further earnings per share upside. “PGR has turned the corner on growth, and we think that will drive the stock from here,” she added. Prosperity Bancshares — DA Davidson, buy rating “No change to our $79 PT, as the stock has been caught up in this bank meltdown, trading at its 52-week low, following failures of SIVB and SI, which we believe are idiosyncratic issues and have no bearing on PB. Given the increased risks of a deeper recession, PB is a great defensive stock given its low risk balance sheet, strong deposit franchise, and peer leading capital ratios. … Flight to quality to name. … 1Q margin outlook stable, but plenty of upside over next 12 to 24 mos.” Apple — Morgan Stanley, overweight rating “We see 5 underappreciated catalysts that can drive a re-rating over the next 12 months, cementing Apple as our Top Pick with new $180 PT. As we look beyond the near-term, we see catalyst-rich event path over the next 12 months that is underappreciated by investors, including reaccelerating iPhone and Services growth, record gross margins, two new product launches & the potential introduction of an iPhone subscription program. … Relative to the rest of our large cap Hardware coverage, no other company has as many important catalysts, similar upside vs. Consensus estimates, or commensurate upside to our price target as AAPL.” Academy Sports — Jefferies, buy rating “Our sports retail coverage has been broadly resilient amid the COVID unwind & dynamic backdrop , though we see go-forward margin assumptions broadly at risk amid a rising promotional tide. We prefer ASO; value-oriented market position drives outperformance over the next 12-18 months, ‘sticky’ margin improvement, & > 3x unit growth oppty. … Value-oriented market positioning, best-in-class unit economics, longest unit growth runway & an attractive valuation” TrueCar — Needham, buy rating “We upgrade TRUE to a Buy from Hold and introduce a $3.50 price target. TRUE’s combination of leverage to new vehicle sales as the industry slowly returns to normal and changes to TRUE’s business model help us get comfortable playing offense, while TRUE’s cash balance and further potential interest from strategic industry partners adds comfort on the defensive side.” Progressive — Wells Fargo, overweight rating “PGR has turned the corner on growth, and we think that will drive the stock from here. … The shares traded down post earnings, and we believe this provides a good entry point. … Progressive has seen its personal auto policy growth pick up significantly over the past couple of months as they look to take advantage of shopping as competitors are taking price/re-pricing their books of business. … PGR is a defensive insurer with low investment leverage and conservative investment portfolio.”
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