One good thing about the fourth-quarter earnings season coming to an end is that investors get a chance to reflect on the entire previous year, as well as look ahead for the potential positives for the current year. One thing is for sure, with a pricey market and a new president going full speed ahead on executive orders, the likelihood for a spike in volatility is front and center.
In a series of new reports, Jefferies analysts focus on five top growth stocks, which are all rated Buy at the firm. While they had mixed results when reporting earnings, and one is yet to come, they all remain outstanding growth stories for investors that have patience and a touch more risk tolerance.
This company 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 the new launch is expected to be weak and could affect numbers when the company reports this week. Jefferies sees 2017 guidance as the biggest issue going forward, as the company has been conservative in past years and outperformed estimates.
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 noted last year that the new Overwatch game has blown past 10 million users since its release in late May of 2016 and has generated $500 million since its launch, already more than the analysts $400 million for the year.
Shareholders receive just a 0.6% dividend. The Jefferies price target for the stock is $55, and the Wall Street consensus target is $47.77. The stock closed Friday at $43.69.
This absolute leader in online retail and a dominant player in cloud storage business remains a top pick across Wall Street. Amazon.com Inc. (NASDAQ: AMZN) serves consumers through retail websites that primarily include merchandise and content purchased for resale from vendors and those offered by third-party sellers.
Amazon Web Services (AWS) is also the undisputed leader in the cloud now, and many top analysts see the company expanding and moving up the enterprise information value chain and targeting a larger total addressable market. The company serves developers and enterprises through AWS, which provides compute, storage, database, analytics, applications and deployment services that enable virtually various businesses.
Amazon reported a mixed quarter last week, missing sales estimates by 2% while earnings beat expectations. Guidance for revenue growth in the first quarter was a solid 23%, but the company indicated that operating income growth would likely be substantially lower. The stock got hammered and may be offering investors a great entry point, as the long-term story remains intact.
Jefferies has a $975 price target. The consensus target is $929.10, and shares closed Friday at $810.20, down over 3% on the day.