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Merrill Lynch’s Top Networking and Security Picks for the Rest of 2017

With earnings results pouring in this week, many of the top firms on Wall Street that we cover are starting to get their game plans ready for the rest of the year. While results for the most part have been solid, guidance has been so-so, which makes stock selection going forward critical, especially in a pricey market.

In a new research report, Merrill Lynch seems to be taking the right course for the rest of 2017. The analyst’s top networking and security picks are a combination of contrarian ideas, reduced expectations and companies that have product refresh catalysts. Six stocks make the cut and are rated Buy. All look like solid ideas for aggressive growth accounts.

Top Pick

Ericsson

Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) is the top pick at Merrill Lynch. This top European tech and telecom company offers aggressive investors the potential for big upside. It provides network equipment and software and services for network and business operations worldwide.

Its Networks segment delivers products and solutions for mobile access, internet protocol (IP) and transmission networks, core networks and cloud. This segment offers radio access solutions; IP routing and transport solutions; microwave and optical transmission solutions for mobile and fixed networks; IP multimedia subsystem solutions; a cloud platform that handles workloads for various clouds; and telecom, IT and commercial cloud services.

The company’s Global Services segment delivers managed services, including services for designing, building, operating and managing the day-to-day operations of the customer’s network or solutions; maintenance services; network sharing solutions; shared solutions; and managed services of IT environments, as well as provides broadcast and media services.

While the company missed earnings, the analysts are positive and said in a recent report:

Ericsson reported second quarter results below expectations; management also lowered its 2017 radio access network market outlook. Additional negatives include project adjustment risks, but management expects reductions to help margins, sees 12%+ operating margins beyond 2018. Reiterate Buy; trough valuation, room for margin improvement, attractive longer-term turnaround.

Investors receive a 1.07% dividend. The Merrill Lynch price target for the stock is $8.45, and the Wall Street consensus figure is $6.63. Shares closed trading Monday at $6.32.

Top Security Picks

Check Point Software Technologies

This remains one of the top tech stocks to buy on Wall Street for a security presence. Check Point Software Technologies Ltd. (NASDAQ: CHKP) is one of the best in helping customers protect against advanced persistent threats. The company is considered a worldwide leader in securing the internet, providing...


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