Bank of America says these 'compelling' stocks are going higher
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Bank of America named a host of stocks that the firm said are too attractive to ignore. The investment bank said it's bullish on stocks like Yum China and that investors should take advantage of any weakness. Other buy-rated names the firm likes include Bath & Body Works, Church & Dwight, Aramark and Taiwan Semiconductor. Yum China Stay calm and buy the stock now, analyst Chen Luo said recently of Yum China. "We attribute the weakness mainly to flows, rather than fundamentals, amid the recent bifurcation of AI vs. everything else," he wrote. The firm said its checks show same-store sales growth trending higher for brands Yum China owns, like KFC and Pizza Hut in China. Luo also said the company has wisely resisted suitors' overtures to merge and that makes it financially sound with a "compelling" risk/reward. "We see a particularly attractive buying opportunity post the sell-off and reiterate our Buy rating," he said. The stock is down 10% in 2026. Aramark Analyst Curtis Nagle said the food services and facilities management company is well positioned to be a data center beneficiary. "Aramark has established a first mover advantage with its Nexus platform launch, which leverages deep experience in remote facilities services and an initial hyperscaler win totaling several hundred million in revenue," he wrote. Nexus is the company's new platform , which aims to provide hospitality and workforce support services for hyperscale artificial intelligence data centers. Nagle said that while this opportunity is early, it's too attractive to ignore. "We see the potential for significant earnings upside for Aramark from data center buildouts and new Nexus contract wins," he said. Nagle also raised his price target to $62 per share from $59. "The stock offers a compelling momentum story," he said. Shares are up almost 45% in 2026. Bath & Body Works Analyst Lorraine Hutchinson said the turnaround is working out for the body care and fragrance company. "We think management is taking the right steps to turn the brand and expect multiple expansion as BBWI makes progress on inflecting sales and stabilizing margins," she said following the company's recent earnings report. In particular, the analyst said the company's strategy with Amazon appears to be paying off. "Selling on Amazon is successfully attracting a new customer who is willing to pay more for a faster, more convenient experience," she added. Fuel costs remain a concern, but Hutchinson said Bath & Body Works is battling it successfully as margins remain stable. Shares are down 13% this year. Church & Dwight "We see a compelling risk/reward setup due to: 1) long-term improving volumes with consistent market share gains, 2) limited private label risk to the value portfolio, 3) potential for tuck-in M & A, and 4) a history of outperformance in economic downturns. We appreciate CHD's 36% exposure to value products while continuing to elevate the premium portfolio through innovation." Taiwan Semiconductor "The ongoing semi content growth in mobile, rise of artificial intelligence (AI), and proliferation of Internet of Things (IoT) should result in sustainable upside in aggregate computing power globally. TSMC, as the leading contract manufacturer of semiconductor chips, is in a good position to capitalize. We are structurally positive on TSMC and expect it to sustain over 15% growth with rising FCF from 2026 onwards." Yum China "Stock oversold on flows; compelling risk reward at one-year lows. ... We attribute the weakness mainly to flows, rather than fundamentals, amid the recent bifurcation of AI vs. everything else. ... We see a particularly attractive buying opportunity post the sell-off and reiterate our Buy rating." Aramark "Aramark has established a first mover advantage with its Nexus platform launch, which leverages deep experience in remote facilities services and an initial hyperscaler win totaling several hundred million in revenue. ... "We see the potential for significant earnings upside for Aramark from data center buildouts and new Nexus contract wins. ... The stock offers a compelling momentum story." Bath & Body Works "Early proof points that the new strategy is working. ... We think management is taking the right steps to turn the brand and expect multiple expansion as BBWI makes progress on inflecting sales and stabilizing margins. ... Selling on Amazon is successfully attracting a new customer who is willing to pay more for a faster, more convenient experience."