Investing.com -- UBS has updated its top picks, making notable changes across multiple sectors, including financials, energy, and utilities.
In a shift reflecting expectations for a “soft landing” in the U.S. economy, UBS added Bank of America and Truist Financial (NYSE:TFC) Corporation to its top picks list.
In the financials sector, UBS removed Intercontinental Exchange (NYSE:ICE) and Visa (NYSE:V) from its list, favoring banks with greater leverage to interest rate cuts.
UBS believes that BAC “is the best-positioned multinational bank to benefit from lower short-term interest rates and a soft economic landing.”
The bank’s diversified business model—spanning consumer credit cards, commercial lending, capital markets, and wealth management—positions it well for profitability over the next year.
Truist was also added, with UBS citing the bank’s exposure to “lower deposit funding costs in a declining fed funds rate environment.”
UBS expects Truist to benefit from enhanced efficiency in capital allocation and cost management, supporting profitability growth in the coming 12 months.
The firm also adjusted picks in other sectors. UBS added Suncor Energy (NYSE:SU) to the energy sector, emphasizing its “attractive valuation and accelerating pace of turnaround” under new leadership.
In utilities, UBS added Entergy Corp (NYSE:ETR). and Sempra Energy (NYSE:SRE), highlighting ETR’s declining regulatory risks and infrastructure opportunities and SRE’s growth potential through investments in LNG and its Texas utility operations.
In the MLPs & energy infrastructure space, UBS introduced Kinder Morgan (NYSE:KMI), which it says offers “an attractive valuation” with potential growth tied to increased natural gas demand for AI and data center electricity needs.
UBS maintained financials, information technology, and utilities as its “most preferred” sectors, while listing materials and real estate as “least preferred.”