Jefferies Makes Huge Summer Changes to Franchise List of Top Stock Picks

STARR Surgical provides Visian implantable Collamer lens (ICL) product family to treat visual disorders, such as myopia, hyperopia, astigmatism and presbyopia. Hyperopic ICL treats far-sightedness. It also offers preloaded silicone intraocular lenses, as well as preloaded injectors for use in cataract surgery. In addition, the company sells injector parts and other related instruments and devices. STAAR Surgical markets its products to health care providers, including ophthalmic surgeons, vision and surgical centers, hospitals, government facilities and distributors.

Jefferies is very positive:

Our conviction in STAA shares is based on our proprietary surveys of both refractive surgeons (n=50) and consumers (n=750), along with our bottom’s up total addressable market analysis. Collectively, the data suggests that the EVO Visian ICL could replace the current gold standard LASIK as the lead US refractive surgical option within 3-5 year post launch (expected late 2021). Our sum-of-the-parts analysis supports ~$90-$110 for the myopia opportunities alone, suggesting the current valuation bakes in minimal contribution from Viva in presbyopia markets.

The $150 Jefferies price target is well above the $138 consensus figure. Wednesday’s closing share price was $140.00.

Take-Two Interactive

This top video game producer also has cashed in with some super-hot titles. Take-Two Interactive Software Inc. (NASDAQ: TTWO) develops, publishes and markets interactive entertainment solutions for consumers worldwide. The company offers its products under the Rockstar Games and 2K labels, as well as under Private Division and Social Point labels.

Take-Two develops and publishes action/adventure products under the Grand Theft Auto, Max Payne, Midnight Club, and Red Dead Redemption names through developing sequels, and it offers downloadable episodes, content and virtual currency, as well as releasing titles for smartphones and tablets. The company also develops brands in other genres, including the LA Noire, Bully and Manhunt franchises.

The company also publishes various entertainment properties across various platforms and a range of genres, such as shooter, action, role-playing, strategy, sports and family/casual entertainment under the BioShock, Mafia, Sid Meier’s Civilization, XCOM series and Borderlands labels. It publishes sports simulation titles, comprising NBA 2K series, a basketball video game; the WWE 2K professional wrestling series; and the Golf Club. Additionally, the company offers free-to-play mobile games, such as Dragon City and Monster Legends.

The stock has been on fire, but the analysts remain very positive:

Recent disclosures into the development pipeline have given us increased confidence that the company will finally be able to deliver multiple meaningful titles per year, and we believe Take-Two is set up to generate the most robust earnings growth over the coming years versus peers. Earlier in the year, the co reported there were 12 larger, non-sports titles in development for release in FY23-24, suggesting that the near-term release cadence is likely to be much higher than the three total releases over the past four year. As a result, we see “normalized” earnings of $9+ with significant upside potential. We expect Take-Two to maintain its usual behavior of announcing games 9-12 months ahead of release, setting up multiple catalysts into the back half of the year.

The Jefferies price target is $231. The consensus target is $221.58, and Take-Two Interactive Software stock closed at $183.59 on Wednesday.

These three top stocks were ushered into the Franchise Picks in a sizable portfolio change. This points to analysts seeing a profound shift as the COVID-19 pandemic continues to abate and the reopening prospects remain positive. With the potential for continued economic and political volatility, now is probably a good time for a little summer cleaning.