All Wall Street firms we follow here at 24/7 Wall St. keep a list for their institutional and retail clients of high-conviction stock picks. These are generally the stocks they not only like on a longer term basis, but those that usually have big upside to the assigned target price. Since the beginning of the year, many analysts have tweaked their lists to account for potential changes in 2018, and one company has added a new stock we feel could have outsized upside potential.
In a recent research note, the analysts at Jefferies make a big move by adding a top retail company Ulta Beauty Inc. (NASDAQ: ULTA) to its well-respected Franchise Picks list of stocks to Buy.
If there is any company to own in the retail sector, this may be the one. Ulta Beauty is a holding company for the Ulta Beauty group of companies. It is a beauty retailer that offers cosmetics, fragrance, skin care, hair care products and salon services. The company offers approximately 20,000 products from over 500 beauty brands across all categories, including its own private label. Ulta Beauty also offers a full-service salon in every store featuring hair, skin and brow services.
Ulta Beauty operates approximately 970 retail stores across over 48 states and the District of Columbia and also distributes its products through its website, which includes a collection of tips, tutorials and social content. The company offers makeup products, such as foundation, face powder, concealer, color correcting, face primer, blush, bronzer, contouring, highlighter, setting spray, shampoos, conditioners, hair styling products, hair styling tools and perfumes.
The Jefferies price target on Ulta Beauty is a stunning $300, while the Wall Street consensus price objective is $270.82. The shares trade at $221.75 on Monday morning.
Furthermore, we screened the Franchise Picks List for the highest dividend-paying stocks.
This is one of the top pharmaceutical stock picks across Wall Street. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.
One of the biggest concerns with AbbVie is what might eventually happen with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. Last year the patent board instituted Coherus’s Inter Partes Review against the Humira ‘135 patent. The problem with Humira is that biosimilars and generics are itching to enter the market.
The company reported strong fourth-quarter results that beat consensus sales and non-GAAP earnings per share estimates, mainly driven by strong Mavyret sales. Tax rate guidance of 9% for 2018 estimated to 13% in 2023 came in well above expectations.
Shareholders are paid a solid 3.38% dividend. Jefferies has a $130 price target on the shares, and the posted consensus price target is $125.90. The stock traded on Monday at $114.40.