Jefferies Has 10 Stocks to Buy Now That Could Beat Q2 Earnings Estimates

FleetCor Technologies

This top business services company is one that Jefferies expects to report very solid earnings. FleetCor Technologies Inc. (NYSE: FLT) provides fuel cards, commercial payment and data solutions, stored value solutions and workforce payment products and services. The company sells a range of customized fleet and lodging payment programs and offers card products to purchase fuel, lodging, food, toll, transportation and related products and services at participating locations.

The company also offers telematics solutions that allow fleet operators to monitor the capacity utilization and movement of vehicles and drivers, vehicle maintenance services, prepaid fuel and food vouchers and cards, and workforce payment product related to public transportation and toll vouchers.

The report said:

While our $2.17 is just a tad ahead of consensus, we see a relatively clean set-up into the second quarter with improving top-line trends throughout the quarter, coupled with the stock’s notable lag since reporting first quarter (Fleetcor ~flat vs. SPX +11%).

The $300 Jefferies price target is higher than the $289.21 consensus target. FleetCor stock closed most recently at $264.76.

Procter & Gamble

The company offers a very dependable dividend, which was raised to $0.79 from $0.75 this spring. Procter & Gamble Co. (NYSE: PG) is one of the world’s largest consumer products companies, and it operates in five segments: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby & Family Care. Its many brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn. Some of these are among the most valuable brands in the world.

Procter & Gamble sells its products through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, baby stores, specialty beauty stores, high-frequency stores and pharmacies. The company has been very innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors years of steady growth and dividends.

The analysts noted this about the consumer products giant:

We expect earnings per share of $1.04, which compares to consensus at $1.01. The key metric however for this June fiscal fourth quarter print is organic sales growth (OSG) where we see potential upside to our estimates for 4% OSG vs.~2% consensus/-2% to 2% guide. We expect continued strength in the flagship US market (+8%) on strong demand and retailer inventory replenishment, a strong rebound in China (+7%), favorable commodities, and productivity.

Shareholders receive a 2.47% dividend. Jefferies has set its price objective at $148. The consensus figure is $130.69, and Procter & Gamble stock closed at $128.31 on Wednesday.

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Vertex Pharmaceuticals

This is an aggressive biotech idea for investors. Vertex Pharmaceuticals Inc. (NASDAQ: VRTX) engages in discovering, developing, manufacturing and commercializing small molecule drugs for patients with serious diseases in specialty markets. The company focuses on developing and commercializing therapies for the treatment of cystic fibrosis (CF) and hepatitis C.

The company markets Trikafta, Symdeko/Symkevi, Orkambi and Kalydeco to treat patients with CF who have specific mutations in their CF transmembrane conductance regulator gene. It is also developing VX-814, which is in Phase 2 clinical trial, and VX-864, which is in Phase 1 clinical trial for the treatment of alpha-1 antitrypsin deficiency; VX-147 for treating kidney diseases; and CTX001, which is in Phase 1/2 clinical trial for the treatment of beta-thalassemia and sickle cell diseases.

The analysts noted this:

We expect earnings-per-share of $2.23 which compares to consensus of $2.09. We believe Vertex will beat numbers on a continued strong CF launch and likely raise guidance due to conservative level set at first quarter and the recent EU pricing agreements, which now include England, and should have some modest contribution in the fourth quarter. The company should be least affected by COVID-19 (may not mean zero impact to sales) since its oral drugs are processed through traditional specialty pharmacies and do not require hospital visits.

The $340 price target at Jefferies is well above the $295.91 consensus target. Vertex Pharmaceuticals stock was last seen trading at $278.72.

And the Rest

The other five companies that the Jefferies analysts feel also can deliver results that are higher than the consensus: Fortune Brands Home and Security Inc. (NYSE: FBHS), On Semiconductor Corp. (NASDAQ: ON), Plains All-American Pipeline L.P. (NYSE: PAA), Ring Central Inc. (NYSE: RNG) and TE Connectivity Ltd. (NASDAQ: TEL).

The three potential short-sale ideas, which are those companies the analysts expect to miss consensus estimates, are Anthem Inc. (NYSE: ANTM), Parker-Hannifin Inc. (NYSE: PH) and Welltower Inc. (NYSE: WELL).

These are 13 total stocks that Jefferies feels could either beat expectations or fall short. Given the volatility that is creeping back into the market, these may be good trading and long term ideas, especially for investors with a short-term trading posture and a longer-term horizon.