Wells Fargo publishes 9 high-conviction & catalyst-driven long/short ideas for Q1

Investing.com -- In its Q1 2025 Tactical Ideas list, Wells Fargo (NYSE:WFC ) highlighted nine stocks across eight subsectors, each featuring key catalysts poised to drive notable upside or downside performance. 

The list, 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 Overweight ideas, Albertsons Companies (NYSE:ACI ) stands out as a “unique opportunity,” according to the bank. 

Wells Fargo believes the opportunity comes as the company re-emerges from the "KR deal saga." The firm expects momentum from a "fading deal-overhang" and a compelling Plan B update. 

Additionally, share repurchases are expected to start, with the stock showing an attractive $17-$28 skew. 

Wells Fargo analysts also feel McDonald's is poised for a re-rating, driven by a U.S. traffic recovery, easing comparables, and the launch of a national McValue platform in January. With the stock trading 7% below its five-year average P/E, McDonald’s (NYSE:MCD ) is seen as having upside potential.

EOG Resources (NYSE:EOG ) is a name mentioned by the bank, driven by accelerated share repurchases, rising U.S. LNG exports, and an attractive valuation. The firm anticipates these factors could lead to an early-stage re-rating of the stock. 

Masimo Corp (NASDAQ:MASI ) also makes the list, with Wells Fargo saying it is buoyed by the potential separation of its Consumer business and the appointment of a new CEO, which should help lift an overhang and boost margin expansion.

Other long ideas include Veeva Systems (NYSE:VEEV ), Cyberark Software (ETR:SOWGn ), Lions Gate Entertainment, and Twilio (NYSE:TWLO ), each with specific catalysts such as expanding cloud products, Analyst Days, and strategic separations set to drive higher valuations.

On the short side, Sirius XM Holdings (NASDAQ:SIRI ) is expected to face a challenging outlook in H1 2025, with potential subscriber pressures and a tepid auto market, which could result in a de-rating of the stock’s EV/EBITDA multiple.

 

Source: Investing.com