With this week shaping up to be all about the Federal Reserve meeting and the potential for the first rate increase in years, many investors are looking to reset portfolios with growth stocks that are more reasonable in price. In a new research report, Jefferies has a host of new ideas for institutional and high net worth accounts.
The Jefferies team highlights eight new top growth stock calls for this week. We screened the list for the stocks that are priced the best and offer the best upside to current price targets.
Bank of America
This company has continued a methodical march back to financial health and is a true big money center bank to make the list of stocks to buy at Jefferies. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States, providing various banking and financial products and services for individual consumers, small and middle market businesses, institutional investors, corporations and governments in the United States and internationally.
Operating 5,100 banking centers, 16,300 ATMs, call centers, online and mobile banking platforms, the company continues to open new markets and expand share, which Jefferies feels the company excels in. The Merrill Lynch brokerage arm has continued to supply the bank with outstanding revenues and growth.
The Jefferies team recently met with CEO Brian Moynihan and came away feeling good about the overall outlook for the bank. With the potential for strong commercial lending and credit card originations, and trading at just 10 times 2016 estimated earnings, the stock makes good sense now.
Bank of America investors are paid a 1.25% dividend. The Jefferies price target for the stock is $21, and the Thomson/First Call consensus target is $19.29. The stock closed on Friday at $16.04.
This is one of the top picks at Jefferies, which feels this large cap stock has solid upside potential for 2015 and next year. Celgene Corp. (NASDAQ: CELG) has an outstanding partnered pipeline, which the firm thinks is low risk and has the potential to yield several blockbuster drugs. The analyst also thinks the company can grow earnings 15% on a compounded annual growth rate basis going forward.
Celgene provided strong guidance earlier this year surrounding its Otezla launch and encouraging feedback from doctors on the potential of new triplet regimens in myeloma. Analysts across Wall Street are raising their estimates for the drug, as after a little more than a year on the market, Otezla, which treats psoriasis and psoriatic arthritis, has achieved considerable prescriptions among physicians.
Celgene’s blockbuster blood cancer drug Revlimid continues to dominate. Pomalyst sales grew nearly 46% year over year last quarter. Cancer drug Abraxane is also growing at a respectable rate, so the company continues to have a strong lineup of top-selling drugs.
While second-quarter numbers were solid, the rest of the year could prove to be better. The Jefferies price target is $140, though the consensus target is $149.83. Shares closed on Friday at $123.97.