JPMorgan’s equities desk has released its annual ‘super seven’ list, highlighting Australian stocks expected to rise by at least 10 per cent in the coming year. This year, JPMorgan’s head of Australian equity research, Jason Steed, forecasts the S&P/ASX 200 will climb to 8900 points, up from its recent close of 8778.6. The model portfolio has been reshaped, with energy and retail stocks out, reflecting expectations of further interest rate rises by the Reserve Bank of Australia.
The ‘super seven’ now includes companies in the materials, industrials, finance, and technology sectors. JPMorgan believes technology stocks, which have faced headwinds due to artificial intelligence concerns, are poised for a rebound. The performance of JPMorgan’s super seven picks has been mixed. While the 2024 cohort rallied 16.5 per cent, last year’s selection declined by 3.9 per cent.
Among the selected stocks are Aristocrat Leisure, a slot machine manufacturer with an attractive valuation and expected double-digit earnings growth. BHP Group, a leading resources company, is another pick, driven by its copper exposure and expectations that iron ore supply disruptions are overblown. Also on the list is Challenger, a retirement product provider poised to benefit from regulatory changes. Goodman Group, a real estate group, is included given its data centre pipeline and strong balance sheet, while Macquarie Group is expected to see earnings accelerate. Seek, an employment platform, is tipped to benefit from its Asian ‘freemium’ model. Sims, a metal recycler, rounds out the list, driven by its lifecycle services division and booming demand for data centres.
Aristocrat Leisure is a gaming company focused on slot machine manufacturing. Challenger is a financial services firm that specialises in retirement products. JPMorgan has set price targets for each stock, offering investors insights into the bank’s expectations for their future performance.
