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Disney, Wells Fargo, CVS Among Bank of America Top Picks for 2022

Bank of America named its top stock picks for 2022 in each of the S&P 500’s 11 sectors. Exxon Mobil is another selection.
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Bank of America named its top stock picks for 2022 in each of the S&P 500’s 11 sectors, including Walt Disney  (DIS) - Get Walt Disney Company Report in communications services and Wells Fargo  (WFC) - Get Wells Fargo & Company Report in financial services.

The other choices were BorgWarner  (BWA) - Get BorgWarner Inc. Report in consumer discretionary, Mondelez  (MDLZ) - Get Mondelez International, Inc. Class A Report in consumer staples, Exxon Mobil in energy  (XOM) - Get Exxon Mobil Corporation Report, CVS Health  (CVS) - Get CVS Health Corporation Report in healthcare, Eaton  (ETN) - Get Eaton Corp. Plc Report in industrials, F5  (FFIV) - Get F5, Inc. Report in information technology, Eastman Chemical  (EMN) - Get Eastman Chemical Company Report in materials, Welltower  (WELL) - Get Welltower, Inc. Report in real estate and NRG Energy  (NRG) - Get NRG Energy, Inc. Report in utilities.

“These stocks are mostly neglected by active funds and benefit more than an equal-weighted 11-sector portfolio from inflation, higher GDP, higher interest rates, higher oil prices and wage growth, all of which we expect will occur in 2022,” BofA analysts said.

They chose the stocks based on high quality, inflation-protected yield, value over growth and free cash flow generators and BofA analysts' 2022 earnings outlook versus consensus. The bank rates all the stocks as buy.

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On average, the choices have a 23% upside from the analysts’ price targets. And they have an average dividend yield of 2.2%, versus 1.7% for the 11 sectors on average.

As for Disney, the analysts cited “reopening exposure (parks/cruise/movies), neglect by funds and high quality.”

For Wells Fargo, it’s “high quality, value, positive inflation, GDP, interest rates, high [environment/social/governance] level,” they said. It “likely benefits more from higher rates than other banks.”

When it comes to CVS the analysts like its “high quality, value, medium duration, domestic [orientation] and high ESG level.”