Best Stocks To Buy Now In January 2024 (2024)

Boeing is one of the largest U.S. defense contractors and is one of the two main global suppliers of large commercial aircraft.

Bank of America analyst Ronald Epstein says ramping Boeing 737 deliveries coupled with the wind-down of the company’s post-pandemic aircraft inventory glut will be a positive catalyst for Boeing’s stock in the fourth quarter. Looking ahead, Epstein forecasts roughly $17 billion in wind-downs of excess Boeing 737 and 787 models in inventory over the next three years. He says the defense market is as strong as it has been since the Cold War era and anticipates the U.S. Department of Defense budget will continue to grow.

“With shares now at the bottom of the prior two-year range, Boeing looks increasingly attractive from a technical perspective,” Epstein says.

Bank of America has a “buy” rating and $300 price target for BA stock.

CSX is one of the leading U.S. railroad companies, providing rail-based transportation services such as traditional rail service and transport of intermodal containers and trailers.

Analyst Ken Hoexter says CSX operates an extremely efficient business, yet the stock is trading at a valuation discount relative to its rail peers. Hoexter says the September addition of new chief operating officer Mike Cory will further help CSX fine-tune its operations, potentially increasing its pricing leverage and gaining additional market share along the way.

“We expect earnings to inflect higher from 3Q, which we view as an earnings trough, given rising met coal prices leading export coal yields, increasing fuel surcharge aiding all-in pricing, and improving volumes driven by service gains,” Hoexter says.

Bank of America has a “buy” rating and $38 price target for CSX stock.

Five Below operates a chain of value-oriented retail stores that are focused largely on items priced at $5 or less.

Five Below shares are down more than 10% year-to-date as same-store sales growth trends have largely disappointed Wall Street, but analyst Jason Haas anticipates sales growth will rebound starting with the Halloween holiday shopping season. Haas says the company’s business model is becoming more holiday-centric, and 2023 blockbuster movies featuring the Barbie, Super Mario, Transformers and Spider Man franchises suggest this year’s holiday toy sales could be particularly strong.

“We’re most looking for an acceleration in Oct/Nov which would set up for a stronger-than-expected 4Q and holiday season, as well as positive early reads on shrink mitigation efforts,” Haas says.

Bank of America has a “buy” rating and $230 price target for FIVE stock.

Kraft Heinz is one of the world’s largest consumer packaged food and beverage companies and is the parent company of popular brands such as Kraft, Heinz, Oscar Mayer and Maxwell House.

Analyst Bryan Spillane says center store packaged food companies have been struggling with negative sales volume trends, but Kraft Heinz has the most compelling risk-reward skew in the group. Spillane says Lunchables merchandising efforts and cream cheese supply chain recovery could help Kraft Heinz’s volumes rebound faster than many of its peers heading into year’s end.

“KHC is positioned well in an environment where at-home consumption remains elevated given that food away from home consumption remains expensive on a relative basis, which is supported by KHC’s improvement in share trends and service levels,” Spillane says.

Bank of America has a “buy” rating and $48 price target for KHC stock.

Occidental Petroleum is one of the largest U.S. oil and gas exploration and production companies, and it also operates a large chemicals business.

Analyst Doug Leggate says Occidental is the most capital-efficient company within the U.S. oil group, and Occidental will be one of the leading beneficiaries of elevated crude oil prices in the fourth quarter. In addition, billionaire Occidental investor and Berkshire Hathaway (BRK.A, BRK.B) CEO Warren Buffett has repeatedly shown a willingness to step in and buy the stock on any dips.

“The capacity to transfer value from debt to equity is the primary basis of our positive view, while ownership that is >24% of outstanding shares by Berkshire Hathaway is a defensive ‘put’ that we believe can mitigate downside risk,” Leggate says.

Bank of America has a “buy” rating and $82 price target for OXY stock.

Owens-Corning produces glass fiber reinforcements and materials for composites and building materials, including insulation and roofing, used in both residential and commercial construction.

Analyst Rafe Jadrosich says there are several near-term bullish catalysts ahead for Owens-Corning, including a potential third-quarter earnings beat, price increases on insulation and roofing and strong roofing sales driven by storm replacement demand. The company began implementing insulation price hikes in late September, its first price increases since December 2022. In addition, Jadrosich says insulation volume growth will rebound in the fourth quarter given recent trends in single-family housing starts.

“We think as OC continues to deliver strong margins and earnings beats despite a volatile macro backdrop, the stock could see multiple re-rating,” Jadrosich says.

Bank of America has a “buy” rating and $165 price target for OC stock.

RenaissanceRe is a Bermuda-based insurance and reinsurance provider.

Analyst Joshua Shanker says RenaissanceRe is one of the top reinsurance providers in the industry, specializing in the niche business of providing property-catastrophe insurance for insurers. Shanker says persistently low interest rates kept RenaissanceRe’s prices below fair value from 2012 through 2021, but the price of property-catastrophe reinsurance has surged since the beginning of 2021.

“We believe this pricing will be sustained so long as interest rates remain in the 4-5% range, and pricing could go even [higher] in reaction to a major ($100bn+) industry catastrophe event,” Shanker says.

With the stock trading at roughly 1.4 times book value, he says RenaissanceRe has attractive return potential for investors.

Bank of America has a “buy” rating and $266 price target for RNR stock.

Sarepta Therapeutics is a biotechnology company developing exon-skipping therapeutics and gene therapy to treat duch*enne muscular dystrophy (DMD) and Limb Girdle muscular dystrophy (LGMD).

Analyst Tazeen Ahmad says she anticipates positive phase 3 trial data on Sarepta’s DMD gene therapy Elevidys in late October or early November. The U.S. Food and Drug Administration approved Elevidys for DMD patients between the ages of four and five in June, and the company has said a positive readout on the confirmatory trial could open the door for the FDA to eliminate the age restriction for the treatment.

“We are confident in a positive readout for EMBARK based on the trial design and view the FDA’s commitment to a promptly review of the application and active engagement in the regulatory process as a positive,” Ahmad says

Bank of America has a “buy” rating and $186 price target for SRPT stock.

Teva Pharmaceuticals is an Israel-based generic and branded drug company.

Analyst Jason Gerberry says Teva is repositioning its business so that it can achieve a more predictable growth trajectory that could potentially help the stock expand its valuation over time.

Gerberry says Teva has several positive catalysts ahead in the fourth quarter and beyond, including sales numbers from new schizophrenia treatment Uzedy. In addition, he expects positive regulatory updates on key biosimilar programs in the first quarter of 2024 could improve the company’s financial outlook.

“Teva remains a global leader in generics and we see this business as an important source of cash flow to fund pipeline investment and reduce net-debt leverage,” Gerberry says.

Priced at just 3.1 times forward EPS estimates, Teva’s near-term valuation downside may be limited.

Bank of America has a “buy” rating and $13 price target for TEVA stock.