8 S&P 500 stocks to buy with the most potential

Bank of America sees at least a 50% increase for these stocks. The S&P 500 has performed very well so far …

Bank of America sees at least a 50% increase for these stocks.

The S&P 500 has done very well so far in 2021, gaining 16% year-to-date. No matter how much the S&P 500 successful, investors are always looking for ways to beat the market. Stocks with the highest upside potential usually carry more risk, but with the economy picking up and no signs of trouble for the market, perhaps now is the time for investors to be a bit more aggressive than usual. Here are eight S&P 500 stocks to buy with the most potential upside, based on price targets from Bank of America analysts.

APA Corp. (symbol: APA)

APA is the parent company of Apache Corp., one of the largest oil and gas exploration and production companies in the United States. Oil stocks have been hot so far in 2021, as reopening and travel demand pushed crude oil prices near their highest levels in six years. Analyst Doug Leggate says APA’s forecast of at least $ 1 billion free cash flow (FCF) for fiscal 2021 is extremely conservative compared to its own projection of $ 1.8 billion FCF . Bank of America has a “buy” rating and a price target of $ 40 for APA stock.

Valero Energy Corp. (VLO)

Valero Energy is one of the largest independent petroleum refiners in the United States. Leggate says Valero’s position as the largest ethanol producer in the United States and its growth in renewable diesel makes it the leader in green energy within the refining group. Earlier this year, Valero agreed to anchor the carbon capture and storage system for the Midwest, which could also come with significant carbon sequestration credits. Leggate claims that Valero is an outstanding economic recovery game with significant valuation on the rise. Bank of America has a “buy” rating and a target price of $ 110 for the VLO stock.

Micron Technology Inc. (UM)

Micron Technology manufactures solid-state memory products, including DRAM and NAND flash memories. Micron stock underperformed its semiconductor peer group in 2021, but analyst Simon Woo says there are several bullish catalysts ahead for the company. Woo predicts a strong rebound in DRAM prices, which should increase margins. Additionally, he says Micron has a solid track record of opportunistic acquisitions and migrating new technology nodes. Finally, Micron is one of the few semiconductor stocks with the potential for significant returns for shareholders via buybacks. Bank of America has a “buy” rating and a price target of $ 125 for MU stock.

Occidental Petroleum Corp. (OXY)

US oil and gas exploration and production giant Occidental Petroleum is yet another example of an oil stock that could have a significant rise again. Leggate says Occidental is almost not fully hedged, giving him almost full exposure to the strong oil price environment in 2021. He estimates that Occidental generated a 5% FCF return in the second quarter. He forecasts a 20% FCF return for the remainder of 2021 and a cumulative 40% FCF return through 2022, which should help unlock value for investors. Bank of America has a “buy” rating and a target price of $ 44 for OXY stock.

Penn National Gaming Inc. (PENN)

After a huge year in 2020, gambling company Penn National Gaming is among the worst performing S&P 500 stocks of 2021, down more than 16% since the start of the year. Much of Penn’s big rally earlier this year was driven by high expectations for the company’s new Barstool Sportsbook & Casino app, and analyst Shaun Kelley says Penn is on track for another record quarter. when it publishes its results in early August. Kelley says Penn’s recent $ 400 million bond offering was also opportunistic, and the company now has over $ 2 billion in cash. Bank of America has a “buy” rating and a price target of $ 110 for PENN stock.

Fox Corp. (FOX)

Fox is a major media organization and owner of the Fox Broadcast Network, Fox News, Fox Business, and 28 TV stations. Analyst Jessica Reif Ehrlich says Fox’s fiscal 2022 will be an investment year as the company focuses on strengthening its streaming service Tubi and other digital media assets. Ehrlich estimates that Fox will spend between $ 200 million and $ 300 million on these digital initiatives, a move she considers prudent given that investors are currently focusing on direct-to-consumer streaming offerings. Bank of America has a “buy” rating and a price target of $ 54 for FOX stock.

Freeport-McMoRan Inc. (FCX)

Freeport-McMoRan is one of the largest in the world copper producers and a miner of gold and molybdenum. Analyst Timna Tanners predicts that high copper prices will help Freeport generate $ 3.5 billion in 2021 FCF, more than triple its $ 1.1 billion in 2020 FCF. Tanners says the company can use this excess cash to pay down debt and increase shareholder returns. Freeport’s net debt fell from $ 6.1 billion to $ 5.2 billion in the first quarter after the company generated $ 705 million in FCF. Bank of America has a “buy” rating and a price target of $ 54 for FCX stock.

Seagate Technology Holdings PLC (STX)

Seagate Technology is a data storage company specializing in hard drives and SSDs. Analyst Wamsi Mohan says the hard drive market is improving and Seagate is well positioned to take advantage of it. In June, Seagate pre-announced about $ 2.95 billion in second-quarter revenue and $ 1.85 in adjusted earnings per share, beating the company’s previous forecast. Mohan says the momentum is expected to continue into the third quarter, and he expects continued revenue improvements, margin expansion and returns for shareholders. Bank of America has a buy rating and a target price of $ 135 for the STX stock.

Eight S&P 500 stocks with a sharp rise:

– APA Corp. (APA)

– Valero Energy Corp. (VLO)

– Micron Technology Inc. (UM)

– Occidental Petroleum Corp. (OXY)

– Penn National Gaming Inc. (PENN)

– Fox Corp. (FOX)

– Freeport-McMoRan Inc. (FCX)

– Seagate Technology Holdings PLC (STX)

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