With earnings reports for the third quarter underway, and the fourth quarter of 2016 in full swing, many of the top companies we follow on Wall Street are making some changes to the lists of their high conviction stock picks for clients. With the market continuing to trade to near all-time highs, it makes sense to examine the lists and make some changes as the rest of the year could have additional volatility as the political cycle could prove to be very volatile component.
In a recent research note, the analysts at Jefferies make a big move by adding National Fuel Gas Co. (NYSE: NFG), a top energy company, to the firm’s well-respected Franchise Picks list of stocks to Buy. This is an off-the-radar pick that is an outstanding addition to the portfolio.
This diversified energy company is headquartered in western New York and operates an integrated collection of natural gas and oil assets across five business segments. Jefferies analysts added the stock to the Franchise Picks list because believe the company is an outstanding addition at current levels. Their report noted:
The analysts believes the company is in a unique position to have the N. Access pipeline in New York approved and with that he lifted his some-of-the-parts analysis valuation to $67 from $60. Even without the N. Access benefits, the company trades at ~17.4x fiscal 2017 earnings-per-share and offers a 3% dividend yield, which is attractive relative to gas utilities, and in our view still leaves room for upside even without the pipeline.
National Fuel Gas investors receive a 3% dividend. The Jefferies price target for the stock is $67, and the Wall Street consensus target is $62.50. The shares closed on Friday at $54.03.
In addition, here are the top technology companies in the Jefferies Franchise Picks portfolio
This company reported very solid second-quarter results last week and remains a top pick on Wall Street. Activision Blizzard Inc. (NASDAQ: ATVI) develops and publishes online, personal computer (PC), video game console, handheld, mobile and tablet games worldwide.
The company develops and publishes interactive entertainment software products through retail channels or digital downloads and downloadable content to a range of gamers. The company’s Call of Duty franchise has propelled earnings for this industry, but some analysts feel the company could earn up to $3 per share by 2018 if it can optimize the King Digital advertising opportunities and unlock synergies.
Jefferies notes that the new Overwatch game has blown past 10 million users since its release in late May and already has generated $500 million since its launch, more than the analysts’ projections of $400 million for the year.
Shareholders receive a small 0.6% dividend. Jefferies has a $55 price target. The consensus target is lower at $47.77. The stock closed Friday at $43.69.