RBC: Here are 14 US stocks that could grow like crazy – Markets Insider

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  • RBC Capital Markets provided a third-quarter update to its annual list of “Top 30 Global Ideas for 2018.” We compiled the 14 US-based companies from the list.
  • The portfolio consists of global 30 stocks poised to grow in the year ahead.
  • The list is created on an annual basis by RBC Capital Markets’ Global Equity Research Department with quarterly updates.

RBC Capital Markets provided a third-quarter update to its annual list of “Top 30 Global Ideas for 2018.” The portfolio consists of 30 stocks poised to grow in the year ahead.

The list is created on an annual basis by RBC Capital Markets’ Global Equity Research Department with quarterly updates. “We publish quarterly updates of the Top 30 to highlight performance metrics YTD as well as any potential updates to our investment thesis or price targets,” RBC Capital Markets added.

We rounded up the US-based companies that RBC says are primed to grow.


Air Lease Corporation

Markets Insider

Ticker: AL

Market Cap: $5.15 billion

Rating: Top Pick

Price Target: $93

Dividend yield: 0.9%

YTD Total Return: -4%

“We anticipate continued portfolio expansion on aircraft deliveries to support continued strong revenue expansion and robust 20% + EPS growth ahead.”

Source: RBC Capital Markets


Aptiv

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Ticker: APTV

Market Cap: $22.2 billion

Rating: Outperform

Price Target: $120

Dividend yield: 1%

YTD Total Return: -0.4%

“Aptiv’s strong top-line growth should allow for further margin expansion.”

Source: RBC Capital Markets


Celgene Corporation

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Ticker: CELG

Market Cap: $ 65.5 billion

Rating: Outperform

Price Target: $110

Dividend yield: 0

YTD Total Return: -14.3%

RBC Capital Markets sees multiple areas of growth for Celgene’s best-selling cancer drug Revlimid, including share gains, demographic expansion, and pricing power.

Source: RBC Capital Markets


Dollar Tree

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Ticker: DLTR

Market Cap: $19.4 billion

Rating: Outperform

Price Target: $96

Dividend yield: 0

YTD Total Return: -24.01%

“In our view, few companies have the combination of store growth, customer acquisition growth, and category expansion that Dollar Tree offers.”

Source: RBC Capital Markets


DowDuPont

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Ticker: DWDP

Market Cap: $150.1 billion

Rating: Top Pick

Price Target: $81

Dividend yield: 2.9%

YTD Total Return: -8.2%

“We believe the majority of the markets can continue the momentum through 2018 with growth out of North America and Asia, steadiness in Europe, and potential stabilization in Latin America (Brazil).”

Source: RBC Capital Markets


Facebook

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Ticker: FB

Market Cap: $481.8 billion

Rating: Outperform

Price Target: $225

Dividend yield: 0

YTD Total Return: -6.8%

“We believe the large amount of data collected on these users is a unique and valuable asset for ad and content targeting.”

Source: RBC Capital Markets


GDS Holdings

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Ticker: GDS

Market Cap: $29.9 billion

Rating: Outperform

Price Target: $52

Dividend yield: 0

YTD Total Return: 55.9%

“Unlike most other data center providers in China, GDS is focused on being a carrier neutral data center operator with national reach, targeting high-performance self-developed datacenters located in key metros.”

Source: RBC Capital Markets


Magna International

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Ticker: MGA

Market Cap: $17.9 billion

Rating: Outperform

Price Target: $74

Dividend yield: 2.5%

YTD Total Return: – 5.7%

“Global production is projected to grow at a ~1.3% CAGR through 2022E, and due to new business wins, MGA’s revenue should grow faster than this (at ~5%).”

Source: RBC Capital Markets


Netflix

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Ticker: NFLX

Market Cap: $168.9 billion

Rating: Outperform

Price Target: $440

Dividend yield: 0

YTD Total Return: 94.7%

“This conclusion is based on our assessment of Netflix’s 57 million US subscriber and 73 million International subscriber bases, which make Netflix one of the largest global entertainment subscription businesses.”

Source: RBC Capital Markets


Parsley Energy

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Ticker: PE

Market Cap: $9.2 billion

Rating: Outperform

Price Target: $42

Dividend yield: 0

YTD Total Return: -0.7%

RBC Capital Markets believe that Parsely Energy’s production growth profile, balance sheet, and oil hedge book are “best in class and differentiate from peers.”

Source: RBC Capital Markets


Service Now

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Ticker: NOW

Market Cap: $36.3 billion

Rating: Top Pick

Price Target: $205

Dividend yield: 0

YTD Total Return: 50%

ServiceNow is an enterprise IT cloud company that delivers SaaS-based applications to automate and standardize IT business processes. RBC Capital Markets is bullish on the company’s ability to take share in the IT Service Management (ITSM) from legacy IT vendors.

Source: RBC Capital Markets


The Walt Disney Company

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Ticker: DIS

Market Cap: $170 billion

Rating: Top Pick

Price Target: $140

Dividend yield: 1.3%

YTD Total Return: 9.6%

“The rub is that global DTC will likely be a drag on earnings as the streaming product rolls out, but we expect investors to look through this since Disney is one of the few media companies with the scale and content library to compete as a global player.”

Source: RBC Capital Markets


Waste Connections

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Ticker: WCN

Market Cap: $21.09 billion

Rating: Outperform

Price Target: $84

Dividend yield: 0.7%

YTD Total Return: 13.1%

Waster Connections’ growth in earnings before interest, tax, depreciation and amortization and strong cash flow provides the basis for more meaningful acquisitions, according to RBC.

Source: RBC Capital Markets


Xylem

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Ticker: XYL

Market Cap: $14.5 billion

Rating: Outperform

Price Target: $85

Dividend yield: 0.9%

YTD Total Return: 18.1%

“Positives include the scarcity value in Xylem’s sector-leading 90% water exposure, leverage to healthy public water utility markets (50% of revenues), ~350 bps of long-term margin upside, and M&A optionality.”

Source: RBC Capital Markets