Barclays Capital has chosen 143 companies as top global stock picks for 2012. Among the few Canadian choices are Suncor Energy and Toronto-Dominion Bank .
Barclays is forecasting that oil prices will remain above $100 (U.S.) in the year ahead, partly due to growing security concerns in the Middle East. In this environment, Suncor is well positioned thanks to its oil reserves and focus on the “relatively stable Canadian oil sands.”
Analyst Paul Cheng put a 12-month price target of $48 (Canadian) on the shares, representing a 63 per cent gain from today’s price. That target assumes a price of $100 (U.S.) a barrel for Brent crude.
He wrote: “With all major near-term turnarounds now behind the company and better reliability in the oil sands production and upgrader operation levels, SU should begin to show significantly higher free cash flow earnings power. Despite improved reliability, however, the stock remains one of the worst performers since the end of 2009. We think this disconnect creates an interesting investment opportunity, and we expect SU will regain some of its lost "good operator premium" over the next several quarters.”
Barclays selected TD as its favourite among Canadian banks for 2012, citing diversified revenue streams, relatively low exposure to capital markets revenues and TD’s growing U.S. retail operation that gives it exposure to an eventual U.S. economic rebound.
Analyst John Aiken has a 12-month price target of $87 (Canadian) on the shares, for a potential return of nearly 20 per cent based on today’s price.
“TD Bank’s solid wealth management platform and supplemental loan growth from its Chrysler Financial acquisition adds further revenue diversification,” he wrote. “As global macro headwinds continue to persist and weigh on capital markets revenues, we believe investors will focus on TD Bank’s strong retail franchise in both Canada and in the U.S., ultimately rewarding TD Bank’s balanced growth.”