Deutsche Bank Overweight Financials and Stocks With High Foreign Exposure

January 2, 2013 2:11 PM EST
With a fiscal cliff deal in pocket, investors lifted the S&P 500 by 1.7 percent to 1450 on the first day of trading in 2013. While no deal was reached on spending issues, overall Wall Street viewed an end to the stalemate as positive. Looking forward, analysts at Deutsche Bank today raised its 12-month price target on the S&P 500 to 1575 from 1500. To start the year, analysts are overweight Financials, Technology and Industrials.

“We expect strong dividend growth to drive PE expansion in Financials and it remains our preferred US play,” said the bank. Analysts prefer big banks with capital markets exposure.

Ex-Financials, the banks likes stocks with higher foreign exposure.

“We encourage investors to rotate back toward companies with high foreign and export sales. Although not the case in 2012, these companies normally deliver stronger EPS growth and returns. We also think that companies exposed to investment spending will benefit from an upturn in global capex as macro uncertainty diminishes."

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