Truist came out with a spate of stock picks that could rally sharply in the back half of the year. A list of 65 high-conviction picks including Shake Shack and O’Reilly Automotive turned up after the firm searched for stocks that could post big gains heading into the year-end, even as they contend with greater inflation and supply chain issues. “As we like to keep in mind, we invest in a ‘market of stocks’ not just the stock market,” read a Thursday note from the research team. “Our institutional client base is looking for companies that can outperform on a relative basis, and thrive on an absolute basis.” Investors are picking names that could outperform as they study second-quarter earnings for signals on the U.S. economy. On Friday, stocks rallied on the back of strong retail sales data, and better-than-expected earnings from Citigroup and Wells Fargo , that pointed to a strong consumer. Here are 10 of the high-conviction picks: Source: Truist Shares of Shake Shack are a buying opportunity that could surge at least 40% from here. Analyst Jake Bartlett said investors are “severely under appreciating” the fast food chain’s store growth potential, especially as sales recover in urban markets such as New York City. The firm has a $67 price target on Shake Shack. Shares are down about 35% this year to around $46. O’Reilly Automotive could see nearly 15% upside from here, according to Truist. Analyst Scot Ciccarelli has a $788 price target on the stock. The analyst said the auto parts retailer has the pricing power to handle greater inflationary pressures, as drivers will have to pay higher prices to replace needed auto parts. Health care and insurance company Cigna is “well insulated” from many macro challenges, said analyst David MacDonald. He has a $330 price target on the stock, meaning shares have roughly 20% upside from current levels. Cigna is “well positioned” within its sector as it generates strong free cash flows, and has growth opportunities, he said. Other stocks include Five Below , Block , DoorDash , Amazon , Biogen , Marriott and Visa .
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