Citi updates highest conviction ideas list

Analysts at Citi updated their highest conviction ideas list in a second-quarter refresh.

The list contains Citi's North American analysts' strongest Buy ideas for the next 12 months. They explain that the focus is on bottom-up ideas. In its latest reshuffle, the bank added Evergy (NASDAQ: EVRG), Coca-Cola (NYSE: KO), Royal Caribbean (NYSE: RCL) Cruises, and Atlassian (NASDAQ: TEAM) to the list while removing First Horizon (NYSE: FHN) National Corporation and Walmart (NYSE: WMT).

Citi says it remains constructive on the S&P 500's fundamental picture, with 10% EPS growth projected. However, they state that fundamental broadening is becoming more of a second-half story.

"All told, we are less concerned about valuations and more focused on implied growth expectations," writes the bank. "Against a murky US economic picture, stock selection seems focused on idiosyncratic growth drivers, for now."

From the quantitative perspective, Citi said the environment is more conducive to factors like Growth as it carries less macro exposures currently while remaining not crowded.

"The majority of these stocks have high Price Momentum and Quality ranking, and with above average Growth," they state.

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