Investors face a slew of headwinds, Citi says. Here are its top stocks to play it — including one it says has upside of nearly 130%
Strategists at Citi have named their top stock picks to navigate what they call a "perfect storm of headwinds" for investors. Market participants have been buffeted by a seemingly never-ending stream of headwinds since the start of the year, including the highly infectious omicron Covid-19 variant, the specter of interest rate hikes and the Russia-Ukraine war, Citi's strategists said in a research note on Mar. 18. Despite the challenging environment, Scott Chronert, Citi's managing director and U.S. equity strategist, said steady earnings growth expectations are providing the main tailwind for stocks. He noted that inflation expectations and its spillover effects on supply chains have "remained stubborn" due to the recent spike in commodity prices but should improve as the year unfolds. In addition, the U.S. Federal Reserve's expected rate hikes this year should result in "decelerating but sustainable" GDP growth into 2023, he added. Against this backdrop, Citi's preferred sectors are banks, capital goods, diversified financials, health-care equipment and services, materials and retail. Citi's top pick within the large-cap space is General Motors . The bank has a price target of $100 on the stock, which closed at $43.60 on Mar. 21, representing a potential upside of 129.4%. Other stocks with more than 30% upside include Walt Disney , Advanced Auto Parts , Raymond James , Quanta Services , Enphase Energy and Global Payments . Within the small-and-mid caps space, Citi's preferred pick is OneMain Holdings . The bank's price target of $120 implies a potential upside of 108% to the stock's closing price of $57.70 on Mar. 21. The bank's list also includes several stocks with potential upside of more than 50%. They include TripAdvisor , LPL Financial , data centers equipment manufacturer Vertiv Holdings , Logitech and plastic products manufacturer Berry Global .

A Citibank branch in the central business district of Singapore on Feb. 12, 2018. Ore Huiying | Bloomberg | Getty Images