Wells Fargo Releases 9 Compelling and Catalyst-Driven Long/Short Ideas for Q1 By Investing.com
Investing.com — In its list of tactical ideas for the first quarter of 2025 Wells Fargo (NYSE: ) highlighted nine stocks across eight subsectors, each with key catalysts poised to spark a significant rally or decline.
The list, which is updated quarterly, includes a mix of long and short ideas, with a particular focus on stocks poised for significant moves in the first quarter of 2025.
Among the ideas about being overweight, Albertsons Companies (NYSE: ) stands out as a “unique opportunity,” according to the bank.
Wells Fargo believes an opportunity arises as the company re-emerges from the “KR deals saga.” The company is expecting momentum from “overcoming fading business” and a convincing Plan B update.
In addition, share buybacks are expected to begin, with shares showing an attractive $17-28.
Wells Fargo analysts also think McDonald’s is poised for a re-rating, boosted by a recovery in US traffic, lower comparable prices and the launch of the national McValue platform in January. With shares trading 7% below their five-year P/E average, McDonald’s (NYSE: ) is thought to have upside potential.
EOG Resources (NYSE: ) is the name mentioned by the bank, buoyed by accelerated share buybacks, rising US LNG exports and an attractive valuation. The company anticipates that these factors could lead to an early-stage re-rating of the stock.
Masimo Corp (NASDAQ: ) is also on the list, with Wells Fargo saying it is encouraged by the potential spin-off of its consumer business and the appointment of a new chief executive officer, which should help shed excess and boost margin expansion.
Other long ideas include Veeva Systems (NYSE: ), Cyberark Software (ETR: ), Lions Gate Entertainment and Twilio (NYSE: ) , each with specific catalysts such as expanding cloud products, Analyst Days and strategic spin-offs set to drive higher valuations.
On the other hand, Sirius XM Holdings (NASDAQ: ) is expected to face a challenging outlook in the first half of 2025, with potential subscriber pressures and a tepid auto market, which could result in a downgrade of the stock’s EV/EBITDA multiple.
