Bank of America picks 5 stocks with room to run after the Fed rate cut
Bank of America named a slew of stocks that have plenty of upside following the Federal Reserve’s rate cut on Wednesday. The central bank delivered on a widely anticipated quarter percentage point reduction in the Fed’s benchmark overnight lending rate, and signaled that two more cuts could happen this year. That will bring down borrowing costs for companies. Bank of America said stocks like Palantir are attractive at current levels. Other buy-rated names screened by CNBC Pro include: Service Corp, Roblox , Nike and Walmart. Roblox The gaming company is firing on all cylinders, the firm says. Analyst Omar Dessouky recently came away from Roblox’s developers conference feeling even more bullish about the stock. “We felt RBLX’s announced an excellent balance of features aimed at both supply side productivity and demand-side TAM [total addressable market] expansion,” he wrote. Further, Bank of America believes the company’s foray into artificial intelligence isn’t getting enough attention from investors. Meanwhile, Dessouky also raised his price target on the stock to $171 per share from $159. “We felt Roblox once again communicated the most compelling technology & commercial roadmap within the Video Game industry, attracting an ever-growth number of creators,” he said. Shares are up around 134% this year. Service Corp International The cemetery company is extremely well positioned based on a meeting with management, analyst Joanna Gajuk wrote. In a recent note to clients, Gajuk called out a slew of tailwinds heading into year-end and beyond. Cemetery revenue is up, pre-sales are rising and Service Corp’s cremation business is showing improvement. “These organic trends combined with capital deployment should drive EPS growth in the 8-12% over the next few years,” she said. Shares are up less than 1% this year, but Bank of America sees room for the stock to run from here. “We maintain Buy given bullish trends in Cemetery, attractive cash flows,” she said. Nike The turnaround is underway for Nike, according to analyst Lorraine Hutchinson. The sneaker company is scheduled to report fiscal first-quarter earnings on Sept. 30 and Bank of America said investors should buy the stock now. “Tailwinds include better full price selling from fewer promotions given a healthier inventory mix, fewer wholesale buybacks, lapping low-margin off price sell-in and pricing actions to combat tariffs,” she wrote. In addition, gross margins appear to be stabilizing. “We think consensus estimates are bottoming and see several catalysts that could drive healthier growth,” she went on to say. Nike shares are down 6% this year, but have risen more than 19% over the past three months. Nike “Tailwinds include better full price selling from fewer promotions given a healthier inventory mix, fewer wholesale buybacks, lapping low-margin off price sell-in and pricing actions to combat tariffs. … .We think consensus estimates are bottoming and see several catalysts that could drive healthier growth.” Roblox “We felt RBLX’s announced an excellent balance of features aimed at both supply side productivity and demand-side TAM expansion. … .We felt Roblox once again communicated the most compelling technology & commercial roadmap within the Video Game industry, attracting an ever-growth number of creators.” Palantir “We see Palantir as a beneficiary of rapidly growing demand for Artificial Intelligence (AI)-platforms in both commercial and government end-markets. Palantir’s dominant position in the AI-powered software market, differentiated end-toend, ontology-powered & highly secure solutions and first mover advantages should support revenue growth and improving profits in the midterm.” Service Corp We maintain Buy given bullish trends in Cemetery, attractive cash flows. … .These organic trends combined with capital deployment should drive EPS growth in the 8-12% over the next few years. … .When the Baby Boomers reach their 80s and become a bigger driver for the at-need business, earnings would accelerate.” Walmart “We reaffirm our Buy rating, and we increase our PO to $125 from $120, now based on 42.5x on increased confidence on WMT’s strong top and bottom line. … .We expect WMT’s value & convenience to continue resonating esp. as online pricing is the same as in-store.” Read more. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here .)
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