Investing

Jefferies Top Value Stocks to Buy Have Momentum Stock Upside Potential

Holders of Freeport-McMoRan stock receive a 0.72% dividend. The $55 Jefferies price target compares with a $39.29 consensus price target. The shares rose almost 6% on Wednesday to close at $41.54 a share.

Spotify

This music streaming giant could be poised to trade much higher. Spotify Technology S.A. (NYSE: SPOT) provides audio streaming services worldwide. It operates in two segments.

The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its subscribers with no subscription fees.

The company also offers sales, marketing, contract research and development, and customer support services. As of December 31, 2020, its platform included 345 million monthly active users and 155 million premium subscribers in 93 countries and territories.

Jefferies feels that the company has almost unlimited potential:

The ability to make, distribute, and engage with an audience has never been more accessible, paving the way for the creator economy. We view Spotify as central to that trend, and management believes it will have 50,000 creators on its platform by 2025, a 6 times increase. We view the company as more of a platform than a streaming service. Spotify is quickly building the tools for the broader audio creator market that it has done for the music industry. We see these tool sets unlocking new and innovative ways to deliver audio content, which keeps the flywheel spinning: more content creators -> more subscribers -> more content creators -> more subscribers. We highlighted that the company is one of the cheapest platform names as it trades below the range of the group; 4.1 times versus the group’s 6.3x to 24.6x (forward Enterprise Value/ Sales). We expect shares to re-rate higher as growth and gross margins rise.

Jefferies has set a $360 price target. The consensus target is $325.10, and the last Spotify stock trade hit the tape on Wednesday was at $239.50 per share.


These are four quality stocks to buy have value characteristics but also appear to have the hidden potential to have momentum stock upside. While not suitable for all investors, for value and growth stock buyers with a degree of risk tolerance, there could be some big gains in the future for all four stocks. Note that the two technology names have been hit hard this week and look especially attractive.

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