As the first quarter of 2023 kicks off, Wells Fargo is eyeing what it calls equities that offer tactical trading opportunities. Last year was the worst stock market since 2008, with the S&P 500 index down 19.4% as investors grew worried about a possible recession and slowing earnings. But Wells Fargo’s list of strategic ideas includes six stocks that his equity research division said could bode well in the first quarter of the new year. The three names that made the list are: Wynn Resorts’ exposure to Macau’s gambling hub should benefit from China’s move to reopen its economy after a long zero-corona policy. China has announced it will lift quarantine requirements for inbound travelers from 8 January. Wells Fargo analyst Daniel Politzer upgraded Wynn from equal weight to overweight on Monday. He also raised his price target by $27 to $101. That means he’s up 18% from Tuesday’s close. Macau’s recovery “remains the main driver for WYNN shares,” Politzer said in a note. “For the first time in years, we see better days ahead as China turns away from its Covid-free strategy and eases travel restrictions.” Moved from 30-day hold to overweight. Stocks will fall 3% in 2022 and outperform the S&P 500. Merck is also on Wells Fargo’s listing, and the company has set a price target on him at $125. The target means the stock will rise more than 12% from Tuesday’s closing price. The world’s fourth largest pharmaceutical company, as measured by revenue, will surge nearly 45% in 2022. Wells Fargo said Merck was “improving”. its new drug pipeline. The bank received positive results from Phase 3 data on subcutaneous administration of KEYTRUDA and Merck’s trials of a potential drug to further treat high cholesterol (Phase 2) and pulmonary arterial hypertension (Phase 3). We hope to get a catalyst. Also, Wells Fargo has set his Dynatrace target price at $50. This means it is 30% above Tuesday’s closing price. Wells Fargo believes the software company has “the only enterprise-grade cloud platform capable of supporting modern workloads in a hybrid environment.” This helps Dynatrace maintain what Wells Fargo called “best-in-class” operating margins. The bank said at Dynatrace’s next earnings call and user conference scheduled for February, investors will listen to plans to accelerate revenue growth while maintaining margins. Dynatrace, which went public on the New York Stock Exchange in 2019, is down 36.5% in 2022. — CNBC’s Michael Bloom contributed to this report.
