Investors looking to sift through the sell-off should look for stocks that can withstand an economic shakeout and are now more attractively valued, according to Citi. The major averages were under pressure after a slew of soft U.S.
economic data sparked concerns a recession was around the corner. The unwinding of the Japanese yen carry trade added fuel to the pullback — which culminated with the Dow Jones Industrial Average and S & P 500 posting Monday their biggest one-day losses in about two years. Against this backdrop, Citi compiled a "post pullback shopping list" that includes stocks abiding by the following criteria: Stocks are within the top 500 of the Russell 1000 by market capitalization Each stock's implied growth outlook has improved to skew either neutral or positive A forecast no more than 5% change in 2024 and 2025 earnings estimates per Citi research Each stock is buy rated iPhone maker Apple made the Citi list.
Shares have advanced more than 10% in 2024, but they've fallen more than 6% in the past month amid pressure in the broader tech sector. Apple also took a hit this week after Warren Buffett's Berkshire Hathaway revealed it slashed its stake in the company by nearly half during the second quarter. To be sure, several analysts see this as a buying opportunity .
AAPL YTD mountain Apple stock. Caterpillar also made the cut. The construction equipment manufacturer has added more than 12% in 2024.
Shares got a boost Tuesday on the heels of stronger-than-expected second-quarter results, rising 3%. To be sure, analysts are lukewarm on the stock's prospects. The consensus rating on shares is a hold, and the average price target points to limited upside ahead, per LSEG.
Home Depot is another name that made the cut. The home improvement stock has underperformed the broader market in 2024, as higher interest rates have slowed demand for larger projects and big ticket items. Year to date, shares are flat.
However, with traders largely anticipating a nearly 62% chance of a rate cut at the September FOMC meeting, Home Depot could benefit from a rise in consumer mortgage refinancing as rates drop . HD YTD mountain Home Depot stock. Other stocks on the list include Devon Energy and Zscaler .
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