CREDIT SUISSE: Here's the best stock in each sector of the market

Credit Suisse published a massive 71-page note detailing their top investment ideas for a trove of different sectors.

Analysts for each sector came up with their top 3 investment ideas for the next 6-12 months.

They include a lot of beaten up names. Many offer over-looked earnings growth stories.

We thumbed through the note and compiled the stocks with the highest upside to Credit Suisse’s price targets, along with excerpts from the analysts’ comment on the stocks.

Check them out below.

Agriculture Science

CF Industries

Company: CF Industries Holding Inc.

Ticker: CF

Price: $US44.19

Price Target: $US70.00

Upside to Target: 58.4%

Comment: 'While we believe nitrogen prices will moderate slightly on a yr/yr basis in '15/'16, in our view this trend is well within market expectations and note even with materially lower pricing CF still has the ability to generate.'


Company: Ashland Inc.

Ticker: ASH

Price: $US99.55

Price Target: $US153.00

Upside to Target: 53.7%

Comment: 'With the recent announcement of the Valvoline spin, we looked at the value of each business and can now point to a sum of the parts that gets us to ~$US153 looking out over the next 12-18 months. Their upcoming investor day in November could be a catalyst as it should provide more colour surrounding the growth opportunities in each business.'

Apparel, Footwear and Softlines

Company: Phillips-Van Heusen

Ticker: PVH

Price: $US96.76

Price Target: $US134.00

Upside to Target: 38.5%

Comment: 'We believe Calvin and Tommy brands remain healthy and are gaining traction at retail with the global consumer. Core business is positioned to grow at a sustained low to mid-single digit rate, helping drive leverage of fixed investments and double-digit earnings growth.'

Autos and Auto Parts

Company: Magna International

Ticker: MGA

Price: $US46.05

Price Target: $US65.00

Upside to Target: 41.2%

Comment: 'Based on excellent, conservative management team and under-appreciated benefits from vehicle globalization, we have confidence in Magna's 2017 revenue and margin targets.'

Gaming and Lodging

YouTube/Marriott Eastern

Company: Marriott International

Ticker: MAR

Price: $US65.44

Price Target: $US93.00

Upside to Target: 42.1%

Comment: 'Despite the recent noise around Airbnb and the threat of other economy sharing lodging alternatives, which could have an industry-wide impact, we believe the industry remains well-positioned to achieve mid-single digit RevPAR growth in 2015, while supply growth still remains tame versus historical trends.'

Homebuilding and Building Products

Company: Caesarstone Sdot-Yam Ltd.

Ticker: CSTE

Price: $US29.01

Price Target: $US62.00

Upside to Target: 113.7%

Comment: 'We expect significant revenue and EBITDA growth over the next several years driven by share gains for engineered quartz countertops and for CSTE specifically within the category, given its significant US manufacturing capacity expansion and increasing brand recognition.'

Packaged Food

Company: Mondelez

Ticker: MDLZ

Price: $US40.18

Price Target: $US52.00

Upside to Target: 27.4%

Comment: 'We think the appointment of Nelson Peltz to the Board will lead to better execution by current management and an improvement in operating margins to 15-16% in 2016 and higher in subsequent years. The recent divestiture of the coffee business is a good example of how we expect Peltz will continue to drive value creation for shareholders.'

Retail: Hardlines

Company: Home Depot

Ticker: HD

Price: $US112.91

Price Target: $US135.00

Upside to Target: 19.6%

Comment: 'From a macro standpoint, we expect better housing turnover, a recovery in pent-up remodel work and product replacement in home products, appliances, and furnishings, and gradual improvements in household formation, a key variable that could add 50-100 bps to comp growth.'


Company: Dunkin' Brands Group

Ticker: DNKN

Price: $US48.39

Price Target: $US58.00

Upside to Target: 19.9%

Comment: 'Our franchisee checks point to very strong demand for westward expansion, which is the key to the DNKN story. Further, DNKN is largely insulated from emerging labour cost headwinds given the ~100% franchised model, though mgmt. will need to work with franchisees to mitigate these costs in order to sustain unit growth targets.'

Alternative Energy

Company: SolarCity

Ticker: SCTY

Price: $US41.04

Price Target: $US105.00

Upside to Target: 155.8%

Comment: 'The company is a key beneficiary of two trends in solar -- lower solar costs making it a viable resource in more markets (residential solar system costs have fallen 40% in four years) and the ability to lower the cost of capital through financing vehicles.'

Integrated Oil and Gas

Company: Marathon Oil Corp.

Ticker: MRO

Price: $US14.97

Price Target: $US25.00

Upside to Target: 67.0%

Comment: 'MRO should become increasingly free cashflow positive as the Eagle Ford production grows. The international business is already free cashflow positive with or without Europe.'


Company: Tallgrass Energy Partners, LP

Ticker: TEP

Price: $US35.43

Price Target: $US68.00

Upside to Target: 91.9%

Comment: 'Low commodity exposure and high growth visibility the next few years offset by REX contract roll off risk which could hamper some of its drop down potential beyond 2018.'

Oil and Gas E&P

Company: Devon Energy Corp.

Ticker: DVN

Price: $US36.43

Price Target: $US62.00

Upside to Target: 70.2%

Comment: 'The key part of our favourable investment thesis on DVN hinges in our non-consensus view that there is a Concho Resources (CXO) lurking within DVN.'

Oil Services and Equipment

Company: Weatherford International, Inc.

Ticker: WFT

Price: $US8.35

Price Target: $US13.00

Upside to Target: 55.7%

Comment: 'The CFO continues to implement and push metrics on support ratios, asset impairment, reductions in manufacturing and facilities locations, with ~20% of global headcount cut and >$US1bn in annualized cost savings, W.C. generated, inventories reduced, debt paid down, lawsuits settled; a plethora of long overdue actions and events now being implemented.'

Oilfield Services and Marine Transport

Company: Scorpio Tankers Inc.

Ticker: STNG

Price: $US8.86

Price Target: $US15.00

Upside to Target: 69.3%

Comment: 'STNG is the BETA play for the product tanker trade with a lot of optionality (dividends, buybacks, yield spinoff). '


Company: Exelon Corporation

Ticker: EXC

Price: $US29.15

Price Target: $US39.00

Upside to Target: 33.8%

Comment: 'For EXC we see a number of unique earnings drivers that should play out over the coming year including 1) improvement in retail margins, and 2) legislation on a clean energy standard either in Illinois and on a national basis (which feels a bit more speculative at this point).'

Asset Managers

Company: Affiliated Managers Group

Ticker: AMG

Price: $US166.61

Price Target: $US260.00

Upside to Target: 56.1%

Comment: 'We continue to look for 3-5 deals over the next 12 months. AMG announced a new Wealth affiliate in 2Q (bringing Wealth AuM to ~35B), and it's deal pipeline remains robust, skewed towards Alt Managers (currently ~35% of earnings). '

Mid Cap Banks

Company: KeyCorp

Ticker: KEY

Price: $US12.77

Price Target: $US17.00

Upside to Target: 33.1%

Comment: 'Without heroic forecasts for the near term outlook including a combination of 4% revenue growth, 2% expenses growth, and a 4% decline in the average share count, we forecast 4% growth in operating EPS with confidence in the achievability of the forecast.'

FG and Life Insurance

Company: MetLife, Inc.

Ticker: MET

Price: $US46.34

Price Target: $US60.00

Upside to Target: 29.5%

Comment: 'While initial reaction on shares has been negative, we see the optionality for shareholders as neutral to positive because 1) Given MET's current level of capital returns, adverse consequence of a stress test is not very high, 2) While it is not easy for MET to win, the positive impact from a favourable ruling on MET and on the capital framework would be substantial, and 3) The bold move from MET could imply further significant action from management that would be positive for shareholders.'

Mortgage REITs

Company: New Residential

Ticker: NRZ

Price: $US12.82

Price Target: $US18.00

Upside to Target: 40.4%

Comment: 'NRZ stands to benefit as the company will likely purchase a third of the excess MSRs in partnership with NSM and Fortress funds. The simplification of the investment portfolio also enhances the stability of earnings, further adding to the upside.'


Company: LaSalle Hotel Properties

Ticker: LHO

Price: $US27.71

Price Target: $US39.00

Upside to Target: 40.7%

Comment: 'The company is an upscale, fullservice operator with significant exposure to west coast markets (37.3%) where RevPAR growth is most robust. While growth in certain west coast markets such as San Francisco appears to be decelerating, we note that the city has posted 8.0% RevPAR growth QTD with minimal supply deliveries on the horizon.'

Trust Banks, M&A Advisors and Market Technology

Company: Investment Technology Group, Inc.

Ticker: ITG

Price: $US12.98

Price Target: $US19.00

Upside to Target: 46.4%

Comment: 'The recent management update about client town halls affirms our belief that the impact of the SEC settlement will be temporary, the position of the franchise as a key provider of dark liquidity remains intact and the lost share and capture rate will recover as clients gradually reinstate ITG as a routing venue and restore the firm back to Tier 1 brokerage status -- mgmt. notes that conversations here have been constructive. '

Healthcare Distribution and IT


Company: McKesson Corporation

Ticker: MCK

Price: $US184.77

Price Target: $US263.00

Upside to Target: 42.3%

Comment: 'We believe a positive fundamental backdrop as well as upside to Celesio accretion should support further outperformance.'

Life Sciences and Tools

Company: Illumina Inc.

Ticker: ILMN

Price: $US169.82

Price Target: $US230.00

Upside to Target: 35.4%

Comment: 'Return to sequential revenue growth, driven by the MiSeq launch and improving consumable sales, provides nearterm comfort. Longer-term, we are bullish on the company being able to successfully drive their technologies into the lucrative clinical diagnostics arena.'

Medical Supplies and Devices

Company: Boston Scientific Corp.

Ticker: BSX

Price: $US16.00

Price Target: $US19.00

Upside to Target: 18.8%

Comment: 'We believe BSX is well positioned to deliver 4%+ organic top-line growth through the next-gen S-ICD, US quadripolar ICD, US Synergy, US Watchman & European Lotus launches. '

Aerospace and Defence

L-3 Communications
L-3's SPYDR aircraft.

Company: L-3 Communications

Ticker: LLL

Price: $US102.08

Price Target: $US145.00

Upside to Target: 42.0%

Comment: 'We believe that (1) divesting some of the lagging service-driven businesses, and (2) margin upside from integration of legacy acquisitions should drive a catchup trade to peers.'

Airfreight and Ground Transport

Company: JB Hunt Transport Services

Ticker: JBHT

Price: $US71.77

Price Target: $US97.00

Upside to Target: 35.2%

Comment: 'We believe there is scope for upside to Hunt's lowered intermodal volume outlook for '15 should a pickup in consumer goods demand unfold.'

Aerospace and Defence

Company: BE Aerospace Inc.

Ticker: BEAV

Price: $US43.59

Price Target: $US59.00

Upside to Target: 35.4%

Comment: 'While growth in 2016 will be low single digit (mix & timing), it will pick up again in 2017 given higher volumes (Boeing and Airbus deliveries rising) and content expansion on new aircraft (737 lavatories, A350 galleys, oxygen tanks on several platforms, strong seating business).'

Airfreight and Ground Transport

Company: Canadian Pacific Railways

Ticker: CP

Price: $US138.14

Price Target: $US179.00

Upside to Target: 29.6%

Comment: 'The key driver of growth is improving network velocity to turn assets faster, provide better service, increase network capacity, and take both price and market share in the process. We saw evidence of this during 1H and this has persisted into Q3 with service levels having returned to prior peak levels.'

Electrical Equipment and Multi-Industry

Company: Ingersoll-Rand Plc

Ticker: IR

Price: $US50.61

Price Target: $US66.00

Upside to Target: 30.4%

Comment: 'IR is one of the best plays on the recovering U.S. non-residential construction cycle and well placed to take market share in Commercial HVAC.'

Engineering and Construction

Company: Fluor

Ticker: FLR

Price: $US41.35

Price Target: $US61.00

Upside to Target: 47.5%

Comment: 'FLR is one of the highest quality contractors and well diversified by end market, with more than 80% of backlog tied to cost-plus contracts and close to 50% of sales in markets outside oil & gas.'


Company: The Manitowoc Company, Inc.

Ticker: MTW

Price: $US14.69

Price Target: $US22.00

Upside to Target: 49.8%

Comment: 'Our sum-of-the-parts valuation, which is underpinned by conservative assumptions, implies a $US22/share valuation for Cranes and Foodservice. Foodservice appears undervalued, in our view, and is a quality business for MTW who is one of the large players in the market with a broad range of products across both hot and cold.'


Tommaso Boddi/Getty Images for Amazon

Company: Inc.

Ticker: AMZN

Price: $US496.07

Price Target: $US700.00

Upside to Target: 41.1%

Comment: 'We expect margins to stabilise driven by gross margin upside from growing mix of 3P, AWS, and digital revenue and fulfillment leverage. This should drive continued growth in 2015.'


Company: ON Semiconductor Corp.

Ticker: ON

Price: $US9.08

Price Target: $US15.00

Upside to Target: 65.2%

Comment: 'Positive Shift from M&A to cash return and margin expansion -- wireless power could be surprise upside.'

Semiconductor Equipment

Company: LamResearch Corp.

Ticker: LRCX

Price: $US62.86

Price Target: $US105.00

Upside to Target: 67.0%

Comment: 'Increasing SAM opportunity (3D NAND, multi-patterning in logic and DRAM).'

Small and Mid Cap Software

Company: Synchronoss Technologies, Inc.

Ticker: SNCR

Price: $US33.40

Price Target: $US60.00

Upside to Target: 79.6%

Comment: 'We view Synchronoss' products as increasingly important for wireless carriers to exert leverage against handset OEMs by enabling cross-platform data synchronisation among devices that were designed to not interoperate.'

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