10 Large-Cap Stocks With Upside

NEW YORK (TheStreet) -- Teva Pharmaceutical (TEVA), Itau Unibanco Holding (ITUB), Eni (E), JPMorgan Chase (JPM), VALE (VALE), Apple (AAPL), Google (GOOG), Petroleo Brasileiro (PBR), Rio Tinto (RIO) and Bank of America (BAC) have upside potential of up to 56%, based on analysts' consensus estimates of 12-month price targets.

We have identified 10 stocks across diverse sectors such as banking, mining, oil and gas, pharma, consumer electronics and technology, which investors can consider for long-term growth. The selected stocks have a minimum market capitalization of $44 billion, and analysts expect these stocks to outperform their peers and the broader markets, based on their respective 12-month price targets. These stocks could generate 40% returns during 2011, according to analysts' consensus estimates with a high mean buy rating of 80%.
10. Teva Pharmaceutical ( TEVA) is an Israel-based pharmaceutical company engaged in the development, manufacture, and marketing of generic drugs, specialty pharmaceuticals and active pharmaceutical ingredients. The company is the largest generic drug maker in the world with a global product portfolio of more than 1,250 molecules focused on neurological, respiratory and women's health therapeutics as well as biologics.

Net revenue reported for 2011 first quarter was $4.1 billion, growing 12% from the corresponding period in 2010. Net income earned during the quarter was $936 million, up 13% compared to the first quarter of 2010. Gross profit margin during 2010 fourth quarter was 58.8%, improving 40 basis points from the year-ago quarter.

Teva's performance during the first quarter saw increased contributions from its European business, and along with its high-growth generics markets in Eastern Europe, Latin America and Asia delivered double-digit growth during the quarter.

Revenue guidance for fiscal 2011 stood at $18.5 to $19 billion with EPS ranging from $4.9 to $5.2. Analysts expect the stock to deliver 29% return over the next one year with 81% analyst buy ratings. The stock is trading at 9.3 times its estimated 2011 earnings.

9. Itau Unibanco Holding ( ITUB) is one of the largest private banks in Brazil.

During the first quarter of 2011, total loans grew 22%, higher than the Brazilian central bank's mandated range of 10% to 15% through March. Nevertheless, credit growth could be slower on interest rate hikes and the central bank's monetary curbs.

Itau's buoyant credit growth boosted net income to $2.25 billion, up 9.3% year-over-year. However, profits declined as provisions grew 15% over the same period last year.

Non-performing loans were flat quarter-on-quarter at 4.2%; nonetheless, some deterioration was observed from loans to smaller companies during the quarter.

The bank's return on equity stood at around 22.7%. The stock is trading at 11 times its estimated 2011 earnings with an upside potential of 34% over the next one year. Of the 12 analysts covering the stock, 10 rate it a buy, as per a Bloomberg consensus.

8. Eni ( E) is an integrated energy company operating in the oil, natural gas and petrochemicals sectors with presence in 77 countries.

Oil and natural gas production declined 8.6% during the first quarter of 2011. The shutdown of operations in Libya affected production. However, operating profit and net profit rose 18.4% and 21.6%, respectively, from the year-earlier quarter.

Eni is expanding its operations in energy-rich countries like Venezuela and Iraq. In Iraq, the company has secured license to develop the giant Zubair oilfield. The company has signed agreements for developing the Junin 5 oilfield and has discovered the maxi gas field Perla, offshore Venezuela. Besides, the company has oil assets in Norwegia and Ghana.

Eni is planning a capital expenditure of $19.5 billion for full year 2011. The stock is expected to gain 36% over the next one year and is trading at 7.2 times its estimated 2011 earnings. Analysts recommend 60% buy rating on the stock.

7. JPMorgan Chase ( JPM) is a global financial services firm operating in commercial banking, investment banking, asset management, and private equity.

The company's investment banking and retail financial services fared well during the latest first quarter, boosting the company's profitability. JPM reported 2011 first quarter net income of $5.6 billion, recording net profit growth of 58% year-over-year to $3.3 billion achieved in the first quarter of the prior year.

During the quarter, JPMorgan raised more than $450 billion capital and originated mortgages, offered credit cards, increased credit to small businesses, and lent to not-for-profit organizations, government bodies and corporations.

On the capital adequacy front, Jamie Dimon, the company's CEO said, "We strengthened our fortress balance sheet, ending the first quarter with a strong Basel 1 Tier 1 Common ratio of 10%. Looking forward, we intend to operate the business with the objectives of maintaining a Basel I Tier 1 Common ratio of at least 9% and meeting the Basel III requirements substantially ahead of time. Our earnings power will allow us to generate significant capital in excess of our objectives, enabling us to invest aggressively in our future." The stock is trading at 8.3 times its estimated 2011 earnings with projected upside of 37%, according to a Bloomberg consensus.

6. VALE ( VALE) is a metals and mining giant producing iron ore and iron ore pellets.

During the first quarter of 2011, the company reported operating revenue of $13.5 billion, increasing 98% year-over-year. The proportion of bulk material sales, comprising of iron ore, pellets, manganese ore, ferroalloy, and metallurgical and thermal coal represented 70.3% of the first quarter operating revenue, in line with 71.5% realized during the fourth quarter of 2010. Sales to Asia contributed 49.6% toward total first-quarter revenue, down from 54.5% in the fourth quarter of 2010.

Operating income and net profit surged more than 250% each to $8 billion and $6.8 billion, respectively. Operating margin increased to 48.9% from 31.2% in the prior year's March quarter.

The stock has analysts' buying rating of 84% and an upside potential of 38% over the next one year. Vale is trading at 5.7 times its estimated 2012 earnings.

5. Apple ( AAPL) designs and markets a range of PCs, mobile communication and media devices, and portable music players. The company derives around three-fifths of its revenue from international sales.

During the second quarter of fiscal 2011, net profit increased to $5.99 billion from $3.07 billion during the same quarter of 2010. Gross margin for the September quarter was 41.4% versus 41.7% last year.

The company posted revenue of $24.67 billion compared to $13.5 billion in the same quarter last year. Apple's Mac and iPhone sales picked up during the quarter -- 3.76 million Macs were sold during the quarter, a 28% increase in volume over the year-ago quarter. Besides, Apple sold 18.65 million iPhones during the quarter, up 113% in volume. However, iPods sales declined 17% from the year-ago quarter.

"With quarterly revenue growth of 83% and profit growth of 95%, we're firing on all cylinders" said Steve Jobs, Apple's CEO, in a press statement dated April 20, 2011.

Peter Oppenheimer, Apple's CFO, indicated the company's expectations for the third quarter, "Looking ahead to the third fiscal quarter of 2011, we expect revenue of about $23 billion and we expect diluted earnings per share of about $5.03." The stock is trading at 13.1 times its estimated 2011 earnings with an estimated upside of 38%.

4. Google ( GOOG) focuses on areas like internet search, advertising, operating systems and platforms. Domestic revenue forms 47% of company's total revenue.

During the first quarter of 2011, revenue from Google sites, a major revenue spinner and the fastest growing segment, stood at 32%. Overall, Google reported revenue of $8.6 billion compared to $6.8 billion, representing a 27% increase from the first quarter 2010.

Net income earned during the first quarter of 2011 was $2.3 billion, up 21% compared to the first quarter of 2010. Earnings per share for the reporting quarter were $7.04 as against $6.06 in the first quarter of 2010.

Cash and cash equivalents stood at $36.7 billion, as of March 31, 2011. Google's full-time employee strength was 26,316. Of the 39 analysts tracking the stock, 33 rated a buy and 6 maintained a hold. The stock is trading at 14.5 times its estimated 2011 earnings with an estimated upside of 48%, according to analysts polled by Bloomberg.

3. Petroleo Brasileiro ( PBR) is an integrated Brazilian oil and gas company operating in segments like exploration and production, refining, transportation, and marketing of gas and power.

For the first quarter of 2011, net income increased 42%, boosted by a 7% uptick in domestic sales, led by jet fuel, natural gas, and diesel. Higher crude oil prices and volumes during the year buoyed the company's exploration and production segments, while downstream was negatively affected.

The company recently acquired Libra oil field in the Santos Basin with high replacement ratio of 144%. Petrobras' estimates oil reserves in Libra at around 11-12 billion barrels of oil equivalent (boe) with a production output of more than 2 million boe per day.

Exploration and production capex stood at $9.2 billion for the quarter, primarily expanding oil and natural gas capacity in the pre-salt areas.

The stock is trading at 9.5 times its estimated 2011 earnings. Going forward, on average, analysts expect the stock to deliver 50% during the next one year.

2. Rio Tinto ( RIO) is a global metal and mining player, especially aluminum, copper, coal and iron ore. The company has operations in more than 50 countries with bulk production coming from Australia and North America.

Australian coal, iron ore, uranium and alumina operations were affected by extreme weather conditions in the March quarter; however, higher prices during this period provided support. Global iron ore production fell 3% year-on-year to 42 million tonnes during the quarter. Besides, coal, uranium, and bauxite production also dwindled. Australian hard coking coal declined 12% year-over-year, while alumina production reduced by 4% in the March quarter.

On the operational front, Tom Albanese, Rio's CEO commented, "We have successfully gained control of Riversdale Mining Limited and plan to accelerate the development of these significant tier one coking coal assets." The stock is trading at 6.9 times its 2011 earnings and has potential upside of 50%, according to analysts.

1. Bank of America ( BAC) offers a range of services including investment, asset management, and financial and risk management products and services.

The bank provided $144 billion in the first quarter of 2011 toward first mortgages, consumer business cards, home-equity products, and other consumer credit. Overall, credit quality improved in the first quarter of 2011 with net write-offs declining across most portfolios, compared to the first quarter of 2010.

Net income improved on lower credit costs, higher fee income and investment gains. Net income for the first quarter of 2011 was $2 billion as opposed to a net loss of $1.2 billion in the fourth quarter of 2010 and $3.2 billion in the year-earlier period.

The bank's loan book expanded $101 billion in the first quarter of 2011, while deposits grew 5%. The Tier-1 capital ratio at the end of the March quarter was 11.2% and capital adequacy ratio was 15.8%. The stock trades at 10.4 times its estimated 2011 earnings and is likely to deliver 57% over the next one year.

>>To see these stocks in action, visit the 10 Large-Cap Stocks With Upside portfolio on Stockpickr.

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