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Apple (AAPL), IBM (IBM), CBS (CBS) Among Top 24 Stocks for 2014 - Deutsche Bank

December 12, 2013 11:14 AM EST
Get Alerts AAPL Hot Sheet
Price: $173.72 +0.64%

Rating Summary:
    40 Buy, 24 Hold, 7 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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Deutsche Bank thinks the S&P will level off at 1800 then slowly rise to 2000 in 2015. In the note, Deutsche Bank highlights a number of themes for 2014. Themes include "stick with capex plays", "keep cautious on commodity plays", "buy the dips", and "stay constructive". Deutsche Bank also named 24 stocks investors should buy now.

"Healthy EPS growth with yields slowly rising from low levels justifies S&P at 1800," said analyst David Bianco. "Our 2014E EPS of $119 assumes: ~5% sales growth, ~1.5% of mostly pension related margin expansion and a ~1.5% share count decline. We also expect ~15% DPS growth. Our sales outlook it tied to our US capex and export outlook of 5% or higher real growth in 2014 on: 1) $85+/bbl WTI oil prices, 2) healthy China growth, and 3) an overdue upgrade cycle in US manufacturing, enterprise technology and private infrastructure. The S&P price should rise on this EPS growth and with dividends deliver worthy returns in 2014 and 2015."

"With a broad return, across sectors, to healthy real EPS growth, we consider a 16x trailing and 15x forward PE to be fair. This PE aligns with averages since 1960 and implies that 6% is a fair real return on long-term S&P 500 ownership. Further PE expansion in 2014 or 2015 would be justified if long-term real interest rates stay below historical norms when the Fed stops asset purchases," he added.

2014 picks include: Apple Inc. (Nasdaq: AAPL), Accenture plc (NYSE: ACN), Amgen Inc. (Nasdaq: AMGN), Air Products & Chemicals Inc. (NYSE: APD), CBS Corporation (NYSE: CBS), Dupont (NYSE: DD), Delphi Automotive PLC (NYSE: DLPH), EMC Corporation (NYSE: EMC), General Electric Company (NYSE: GE), Gilead Sciences Inc. (Nasdaq: GILD), General Motors Company (NYSE: GM), Honeywell International Inc. (NYSE: HON), IBM (NYSE: IBM), Loews Corporation (NYSE: L), Lincoln National Corporation (NYSE: LNC), LyondellBasell Industries NV (NYSE: LYB), Marsh & McLennan Companies, Inc. (NYSE: MMC), Praxair Inc. (NYSE: PX), QUALCOMM Incorporated (Nasdaq: QCOM), Time Warner Inc. (NYSE: TWX), United Technologies Corp. (NYSE: UTX), and Viacom, Inc. (Nasdaq: VIAB).


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