BofA-Merrill Lynch: Buy This Blue Chip

Procter & Gamble was named one of BofA-Merrill Lynch top picks for the first quarter

BofA-Merrill Lynch just named Procter & Gamble Co (NYSE:PG) one of its "high conviction ideas" for the first quarter of 2019. The brokerage firm said it sees sustainability in P&G's recent revenue strength, and that the company is positioned to beat earnings per share (EPS) and organic sales estimates.

Looking at the charts, the security hit a record high of $96.89 in mid-December thanks to an upgrade to "buy" from BofA-Merrill Lynch. The stock pulled back from here, but found support in the $87-$88 region, home to a mid-October bull gap and its rising 80-day moving average, last seen trading at $90.76. Plus, amid stiff broad-market headwinds, PG stock just saw its best quarter since 2013 with a 10.4% gain.

Analysts could start following BofA-Merril Lynch's lead, too -- with P&G overdue for some upgrades. Eight "buy" or better recommendations are currently maintained on the stock, compared to nine "hold" or worse ratings. Plus, the 12-month consensus price target of $90.88 is roughly in line with current levels.

A shift in sentiment among options traders could keep the wind at the Dow stock's back, too. PG's 10-day put/call volume ratio of 1.80 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 96th annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip in recent weeks.