BofA Securities Makes Huge Q2 Changes to US 1 List of Top Stocks to Buy

With the second quarter of 2021 well underway, and almost 70% of the S&P 500 earnings for the first quarter having been posted, many of the top companies we follow on Wall Street are making some changes to the lists of their high-conviction stock picks for clients. With the market hitting all-time highs recently on all the major indexes, it makes sense to examine the lists as the rest of the year could have some additional volatility as the political and geopolitical cycle could still prove to be very explosive components.

The analysts at BofA Securities have made some big changes to the firm’s US 1 list of top stock recommendations. Three new companies were added, and two that have performed admirably were removed. While covering the newest additions, which of course are all rated Buy, as are the two that were removed, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Comcast Corp. (NASDAQ: CMCSA) and Netflix Inc. (NASDAQ: NFLX) were both removed from the US 1 list, but the BofA Securities analysts kept Buy ratings on both of these top-performing stocks.

Here are the three new additions to the US 1 list.

Avalara

While probably not a household name, this top company has huge potential. Avalara Inc. (NYSE: AVLR) is a cloud-based provider of sales/indirect tax compliance software, including sales tax calculations, returns filing and remittance.

The solutions on the Avalara Tax Compliance Cloud (AvaTax, Returns and CertCapture) handle automated sales tax calculations, monthly remittance and payment to jurisdictions, and filings on exemptions on behalf of customers. The company has shown some very positive recent strength, and the analysts said this last week:

Partner commentary on steady customer adds is likely to drive upside to organic revenue growth of 30%, versus 22% in base case. Reaccelerate to mid 30s organic growth is likely as we move through the year from gradual move upmarket, and cross selling activity. We think shares are likely to re-rate higher as we move through the year; maintain Buy rating and top pick.

The BofA Securities price target for the shares is $215, while the Wall Street consensus target is $203.43 and Monday’s last trade was recorded at $138.64 a share.

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Disney

This is a top consumer media company with multiple streams of income to push revenue, and it is a huge reopening winner. Walt Disney Co. (NYSE: DIS) is the largest publicly traded media and entertainment company and a global leader in producing high-quality, branded, family entertainment.

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