Citi analysts’ 10 favorite stocks to invest in for 2014

Editor’s note: This article was first published in April 2014, and all price targets, current prices and expected returns come from a Citigroup report of that month. Several prices predate later stock splits, and some companies listed have since been renamed, acquired or delisted. The list is kept as published.

Citigroup’s analysts have drawn up a list of the 50 global stocks they believe could be a very profitable investment for 2014–2016. To be selected, companies had to have a market capitalization of more than 3 billion dollars (very solid businesses), a global business model with a significant share of revenue coming from outside their home market, and room to keep growing their market.

Here we look at the 10 companies for which Citi predicts the most promising future and the highest returns for investors, although at the end of the article you’ll find the full list of 50 companies Citi chose, in alphabetical order. One thing worth saying: leaving Apple off the list is a big mistake, since Apple is precisely the company whose shares have soared the most this week after its results pleasantly surprised the market.

1. Gilead Sciences

This is one of Citi’s favorite companies, with a price target of 96 dollars. Its business is focused on hepatitis C, HIV and oncology. Citi believes the company could start paying dividends within 2 or 3 years, as it is in full expansion. It is expected to acquire new products and to buy back shares.

2. Facebook

Citi has confidence in Facebook’s future, seeing upside of 40%, to 85 dollars a share, because it believes mobile advertising revenue and the user base will keep growing.

3. The Blackstone Group

Citi gives it a price target of 40 dollars a share, an expected return of 38%. The analysts believe it is one of the strongest companies in its business.

4. Visa

Citigroup’s analysts give it a price target of 265 dollars. It currently trades at around 208, which means a return of 35%. They think electronic payments are the future and that Visa is very well positioned for it.

5. Cerner Corporation

With a price target of 70 dollars, up from the current 52, the expected return is 36%. The healthcare IT business continues to benefit from government incentives, and the company also has the opportunity to generate more revenue by expanding internationally.

6. FleetCor Technologies

A price target of 147 dollars and an expected return of 34%. The company has shown steady, solid growth over the past decade and is increasingly consolidating its position as a leader in its sector.

7. The Boeing Company

Citi is optimistic about this company, giving it a price target of 160 dollars, a return of 31%, given how well placed it is to take advantage of the growth in global air traffic.

8. Mastercard

As with Visa, Mastercard is positioned to benefit from the growth of online payments. It has a price target of 91 dollars, an expected return of 33%.

9. Las Vegas Sands

The company’s investment in international markets such as Singapore and Macau, as well as Japan and Korea, will bring it growth that should translate into high returns for shareholders. It has a price target of 97 dollars, an expected return of 32%, although outside the Citi report many people think these estimates fall short and that the company’s growth could be even greater.

10. Starbucks Corporation

The company will keep gaining global market share and become one of the most profitable and fastest-growing companies in the US. It has a price target of 89 dollars, a 30% return.

The report also includes Google, with a price target of 676 dollars, although bear in mind that the analysts are assessing this company only on the growth of its core business (online advertising) and not on the potential future markets it is investing in. Personally, I expect it to become the most valuable company on the planet.

Also on the list are eBay (+27%), American Express (+24%) and Harley-Davidson (+21%). Here is the full list of 50 companies Citi considers suitable for investing in 2014:

1. Aberdeen Asset Management
2. AB InBev
3. Accenture
4. Affiliated Managers Group
5. Amazon.com
6. American Tower
7. Amphenol
8. ARM Holdings
9. Atlas Copco
10. Blackstone Group
11. British American Tobacco
12. Celgene
13. Cerner
14. Check Point Software Technologies
15. Coach
16. Computershare
17. CSL
18. Cummins Inc.
19. eBay
20. Edenred
21. Estée Lauder
22. Fanuc
23. FMC Technologies
24. Fossil
25. Gilead Sciences
26. Google
27. Harley-Davidson
28. Inditex
29. Intertek
30. Keppel Corp.
31. Las Vegas Sands
32. MasterCard
33. Microsoft
34. Monsanto
35. MTN Group
36. Nissan Motor
37. Novo Nordisk
38. Oracle
39. Pernod Ricard
40. Philip Morris
41. Polaris Industries
42. Qualcomm
43. ResMed
44. SAP
45. Seadrill
46. Sociedad Química y Minera (SQM)
47. Tata Consultancy Services
48. Uralkali
49. Visa
50. VMware

Further reading

• The best and worst investments for 2014, according to Gary Shilling
• The pyramid of financial success

Featured image: Ajay Suresh, CC BY 4.0, via Wikimedia Commons.