Jefferies Top Growth Stock Picks Could Be Huge Year-End Winners


The retail giant has traded down some recently and is offering a very solid entry point. Starbucks Corp. (NASDAQ: SBUX) operates as a roaster, marketer and retailer of specialty coffee worldwide. Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, juices and bottled water.

The company also licenses its trademarks through licensed stores, as well as grocery and national foodservice accounts. The company offers its products under the Starbucks, Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange, Ethos, Starbucks VIA, Starbucks Doubleshot, Starbucks Refreshers and Starbucks Discoveries Iced Café Favorites brand names.

The Jefferies team is bullish on the overall opportunities in China and noted this:

Our bottoms up analysis of the China business implies it could grow at a 15% compounded annual growth rate to $6.4 billion by fiscal 2024, contributing 20% of EBITDA. While a China spin off is unlikely, our sum-of-the-parts analysis suggests a trading range in the mid-60s to high 80s.

Starbucks shareholders are paid a 2.03% dividend. The $76 Jefferies price objective is well above the $66.32 consensus price target. The stock closed most recently at $66.76 per share.

Ulta Beauty

If there is any stock to own in the discretionary sector, this may be the one. Ulta Salon Beauty Inc. (NASDAQ: ULTA) 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.

Jefferies has set its price target at $335. The consensus price objective is $319.52, and the shares ended last week at $297.79.

These four outstanding stock picks from the Jefferies analysts all have solid upside to the firm’s price target. While better suited for more aggressive growth accounts, they all look like good picks for the rest of 2018 and beyond.