Piper Sandler picks 6 highest-conviction stocks

Piper Sandler selected six top-decile rated stocks in its portfolio strategy team’s Macro Select Model that look attractive, according to its Technical Research team.

All stocks are rated overweight. Piper Sandler explains the choices in macro, technicals and fundamentals.

1. Boston Scientific (NYSE:BSX) - One of the top ranked stocks within healthcare (XLV) and scores well on profitability, earnings growth and free cash flow generation. Its relative strength continues to outperform as price trends above the 40-week moving average. It has a great new product pipeline in med tech.
2. Expedia Group Inc. (EXPE) - The company has higher cash flow profitability compared to its peers, and its earnings estimate revisions are positive. Its relative strength remains constructive as shares broke out the bottom pattern since 2022. The stock is the most attractive on valuation, according to Piper Sandler analysts.
3. Progressive Corporation (PGR) - The company has strong and stable fundamentals, analysts said. Shares continue to rally out of a pullback since October. “The combination of improving underwriting margins and PGR’s top-line growth should allow the company to increase earnings at a fast pace for the next couple of years,” analysts said. “PGR’s expense ratio is currently among the best in the industry at roughly 20% compared to its peers that are typically above 30%.”
4. Skechers U.S.A. (SKX) - High earnings growth relative to its peers. Shares broke out to all-time highs from its “cup and handle” pattern that lasted three years. Although analysts said they’re taking “a conservative approach” on EMEA sales, “we do think we will see improving U.S. wholesale order books for brands that have seen strong sell through in the wholesale channel as inventory levels get light.”
5. Synovus Financial (SNV) - Higher profitability compared to peers. Its relative strength has also improved with its price above its 40-week moving average. The stock is one of the most discounted names from a P/E basis. “SNV is certainly situated in markets that should allow it to outpace peers over the long-run, and the bank is much improved from a funding, capital, and business mix perspective,” analysts said.
6. Zoetis Inc. (ZTS) - Shares broke out from a “head and shoulders” bottom pattern that lasted two years. Price has consolidated above its rising 40-week moving average. “ZTS is the king of blockbuster drugs in animal health,” analysts said.