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Bank of America Names Top 10 Stock Picks for 2026
TLDR
- Bank of America issued its Q1 2026 top stock selections on January 2 with nine Buy recommendations and one Underperform rating
- The Buy list features Amazon, Boeing, Cigna, Constellation Energy, Dollar General, Equinix, Merck, Spotify, and Vertex Pharmaceuticals
- Lennar Corp is the only Underperform pick despite strong homebuilder performance recently
- Catalysts range from AI infrastructure growth to healthcare policy changes and increased tax refund spending
- BofA strategist warns S&P 500 is expensive but identifies opportunities in Health Care, IT, and Real Estate
Bank of America published its top 10 stock selections for Q1 2026 on January 2. The firm selected nine Buy-rated stocks and one Underperform across nine different industries.
The nine Buy recommendations include Amazon.com, Boeing, Cigna, Constellation Energy, Dollar General, Equinix, Merck, Spotify, and Vertex Pharmaceuticals. Lennar Corp is the only stock to receive an Underperform rating.
Anthony Cassamassino, a strategist at the firm, said the selections target companies positioned for major market and business catalysts during the coming quarter. The picks represent a range of sectors rather than focusing on one theme.
Multiple Growth Drivers Identified
Artificial intelligence plays a role in several selections. Amazon, Constellation Energy, and Equinix provide exposure to AI infrastructure development.
Bank of America stated the Q1 catalyst mix is more varied than usual. Each company faces specific circumstances that could drive performance in their respective industries.
Healthcare legislation changes could provide tailwinds for Cigna according to the analysis. Boeing’s trajectory depends heavily on commercial aircraft production rates as the company works toward full recovery.
Dollar General may see benefits from tax refund payments expected in early 2026. First quarter tax refunds historically drive increased shopping at discount retailers.
InvestingPro data shows Dollar General posted an 80% gain over the past year. The company’s balance sheet shows liquid assets surpassing short-term debt.
Dollar General currently trades under its calculated fair value. The company plans to announce earnings results on March 12, 2026.
Dollar General’s Latest Results
Third-quarter sales totaled $10.65 billion, matching what analysts projected. Comparable store sales grew 2.5% during the period.
The company earned $1.28 per share, well above the $0.96 Truist Securities forecast. Several Wall Street firms adjusted their targets higher after the earnings release.
UBS moved its price target up to $143 pointing to customer traffic increases and better margins. Guggenheim set a $140 target based on improved gross margins.
JPMorgan changed its rating to Overweight and set a $166 price target. The firm cited expected same-store sales increases from expansion projects and store updates.
Expensive Valuations Pose Challenge
Savita Subramanian, BofA’s U.S. Equity Strategist, stated the S&P 500 carries expensive valuations. Prices remain elevated following strong gains throughout 2025.
The firm anticipates passive index strategies may face headwinds in the current environment. Stock picking could become more important as broad market gains become harder to achieve.
Despite overall market pricing concerns, certain sectors appear better positioned. Bank of America’s sector analysis points to Health Care, IT, and Real Estate as areas with better near-term prospects.
