<p><img src="https://static2.businessinsider.com/image/5fce065b037cbd001861424e-2400/Joe Burbank:Orlando Sentinel:Tribune News Service via Getty Images.jpg" border="0" alt="SpaceX NASA" data-mce-source="Joe Burbank/Orlando Sentinel/Tribune News Service via Getty Images" data-mce-caption="The SpaceX Falcon 9 rocket lifts off from Launch Complex 39-A at Kennedy Space Center."></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>By most measures stocks have had a good year in 2021, even though the pace of the market's gains has slowed compared to their frantic pace in late 2020.</p><p>But there is always room for improvement, and Jefferies says its analysts are offering one path forward with their Franchise Picks list of best ideas.</p><p>"As of 5/31/21, the Franchise Picks list has outperformed the SPX by ~400 bps on a total return basis," the firm wrote in a note to clients. The S&P 500 posted a total return of 9.5% over the first five months of the year, so that implies a total return of about 13.5% for the Jefferies stocks. </p><p>The list is spread out across the market, and includes companies whose prospects are linked to the economic recovery as well as those that Jefferies simply considers undervalued. There are three additions to the list in June: industrial firm Parker Hannifin, implantable contact lens maker Staar Surgical, and video game publisher Take-Two.</p><p>It removed blood and plasma services company Haemonetics, used car retailer CarMax, and consumer products maker Procter & Gamble from the list.</p><p>In total, Jefferies expects double-digit gains for 20 of the 24 stocks on the list. Those stocks are ranked from lowest to highest based on the gains implied by the analysts' price targets, which shows the upside Jefferies analysts believe they have. Percentages were calculated based on Thursday's closing prices.</p><h3>24. Staar Surgical</h3><img src="https://static5.businessinsider.com/image/60c387e323393a00188e2adb-400-300/24-staar-surgical.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/staa-stock">STAA</a></p><p><strong>Sector</strong>: Healthcare</p><p><strong>Thesis</strong>: "Current valuation continues to assign relatively limited potential for the EVO Visian ICL (myopia lens) and Viva (presbyopia) implantable lens solutions to gain share. … Despite the near peak valuation, we still see significant upside for STAA shares on modest penetration assumptions." — <em>Anthony Petrone</em></p><p><strong>Price target</strong>: $150</p><p><strong>Upside to target</strong>: 4.0%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>23. TransDigm Group</h3><img src="https://static1.businessinsider.com/image/60c3891123393a00188e2ae8-400-300/23-transdigm-group.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/wal-stock">TDG</a></p><p><strong>Sector</strong>: Industrials</p><p><strong>Thesis</strong>: "TDG is ~57% exposed to narrowbody platforms, which supports a quicker recovery in both AM and OE volumes as the global air traffic market shifts away from longer haul international travel in favor of domestic flights. … Any recovery in air travel or improvement in sentiment would help drive the commercial Aerospace business." <em>— Sheila Kahyaoglu</em></p><p><strong>Price target</strong>: $710</p><p><strong>Upside to target</strong>: 7.7%</p><p><em>Source: Jefferies</em></p><p> </p></p><br/><br/><h3>22. Extra Space Storage</h3><img src="https://static6.businessinsider.com/image/60c37ee66d855e00181578cd-400-300/22-extra-space-storage.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/exr-stock">EXR</a></p><p><strong>Sector</strong>: Real estate</p><p><strong>Thesis</strong>: "The Self-Storage sector will continue to deliver the strongest FFO/sh growth among REITs in 2021, driven by an ongoing surge in demand which has driven unprecedented pricing power and all-time high occupancies. We particularly like Extra Space Storage because the company has one of the strongest revenue management strategies." — <em>Jonathan Petersen</em></p><p><strong>Price target</strong>: $173</p><p><strong>Upside to target</strong>: 8.6%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>21. Blackstone</h3><img src="https://static4.businessinsider.com/image/60c38b0c6d855e0018157944-400-300/21-blackstone.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/bx-stock">BX</a></p><p><strong>Sector</strong>: Financials</p><p><strong>Thesis</strong>: "BX has been steadily building out longer-duration permanent capital vehicles such as BREIT, BCRED, and Infrastructure as well as quietly establishing a ~$100B balance sheet light insurance offering. In aggregate, this all works to increasingly add earnings stability and higher multiple fee-paying AUM." — <em>Gerald O'Hara</em></p><p><strong>Price target</strong>: $102</p><p><strong>Upside to target</strong>: 8.9%</p><p><em>Source: Jefferies</em></p><p> </p></p><br/><br/><h3>20. CVS Health</h3><img src="https://static2.businessinsider.com/image/60c37e806d855e00181578ca-400-300/20-cvs-health.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/cvs-stock">CVS</a></p><p><strong>Sector</strong>: Healthcare</p><p><strong>Thesis</strong>: "We expect earnings outperformance to continue, especially as we see further recovery in both healthcare utilization trends (benefiting the pharmacy and PBM) and retail pharmacy traffic. … We believe investors still don't appreciate the longer-term growth and earnings boost that CVS should see from its differentiated, healthcare-focused strategy." — <em>Brian Tanquilut</em></p><p><strong>Price target</strong>: $95</p><p><strong>Upside to target</strong>: 11.1%</p><p><em>Source: Jefferies</em></p><p> </p></p><br/><br/><h3>19. Gilead Sciences</h3><img src="https://static2.businessinsider.com/image/60c379ae6d855e00181578aa-400-300/19-gilead-sciences.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/gild-stock">GILD</a></p><p><strong>Sector</strong>: Healthcare</p><p><strong>Thesis</strong>: "Expectations are low now, sentiment feels relatively weak, and the stock is very under-owned and cheap at ~10x. ... HIV/base biz is worth $50-60 alone, so the pipeline is mostly free, in our view." — <em>Michael Yee</em></p><p><strong>Price target</strong>: $80</p><p><strong>Upside to target</strong>: 15.5%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>18. Alphabet</h3><img src="https://static3.businessinsider.com/image/60c389de6d855e001815793e-400-300/18-alphabet.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/googl-stock">GOOGL</a></p><p><strong>Sector</strong>: Communication services</p><p><strong>Thesis</strong>: "We remain positive on GOOGL thanks to attractive valuation, secular growth trends in the digital advertising market, and call options such as YouTube, Cloud, hardware, and Waymo. … While GOOGL's superior position in digital advertising is well recognized, we believe it is not getting full credit for call options in place for both the near and longer-term." — <em>Brent Thill</em></p><p><strong>Price target</strong>: $2,850</p><p><strong>Upside to target</strong>: 17.0%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>16. Western Alliance</h3><img src="https://static3.businessinsider.com/image/60c376cf23393a00188e2a45-400-300/16-western-alliance.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/wal-stock">WAL</a></p><p><strong>Sector</strong>: Financials</p><p><strong>Thesis</strong>: "WAL outperformed peers significantly on loan/deposit growth in 2020 (19%/40%), which is poised to continue. … We expect WAL to continue to demonstrate beat and raise PPNR performance given robust organic growth." — <em>Casey Haire</em></p><p><strong>Price target</strong>: $118</p><p><strong>Upside to target</strong>: 20.4%</p><p><em>Source: Jefferies</em></p><p> </p></p><br/><br/><h3>15. Parker Hannifin</h3><img src="https://static5.businessinsider.com/image/60c3770923393a00188e2a46-400-300/15-parker-hannifin.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/ph-stock">PH</a></p><p><strong>Sector</strong>: Industrials</p><p><strong>Thesis</strong>: "Near term the restocking of customer and distributor inventory as well as robust end market demand support outgrowth versus other industrial peers … in our view. The company's multi-channel distribution strategy (~50% of sales) also allows for an easier pass-through of pricing to combat material cost inflation which should result in better earnings performance." <em>— Stephen Volkmann</em></p><p><strong>Price target</strong>: $375</p><p><strong>Upside to target</strong>: 23.7%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>15. Take-Two Interactive</h3><img src="https://static3.businessinsider.com/image/60c3886423393a00188e2ae2-400-300/15-take-two-interactive.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/ttwo-stock">TTWO</a></p><p><strong>Sector</strong>: Communication services</p><p><strong>Thesis</strong>: "Of the big three U.S. game publishers we believe that Take-Two is set up to generate the most robust earnings growth over the coming years. The recent disclosures into the development pipeline has given us increased confidence that TTWO will finally be able to deliver multiple meaningful titles a year beyond just annual sports." — <em>Andrew Uerkwitz</em></p><p><strong>Price target</strong>: $231</p><p><strong>Upside to target</strong>: 24.9%</p><p><em>Source: Jefferies</em></p><p> </p></p><br/><br/><h3>14. Bio-Rad</h3><img src="https://static1.businessinsider.com/image/60c3797c6d855e00181578a8-400-300/14-bio-rad.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/bio-stock">BIO</a></p><p><strong>Sector</strong>: Healthcare</p><p><strong>Thesis</strong>: "BIO has a fundamentally strong business that has proven to be resilient thru economic cycles with ~80% recurring revs and #1/2 share in ~85% of its underlying businesses, with the company executing better than it ever has. … BIO is well-positioned to deliver above-average EPS/FCF growth over the next 2-3 years, driven by accelerating organic revenue growth." — <em>Brandon Couillard</em></p><p><strong>Price target</strong>: $760</p><p><strong>Upside to target</strong>: 25.8%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>13. Gentex</h3><img src="https://static4.businessinsider.com/image/60c37fa66d855e00181578d1-400-300/13-gentex.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/gntx-stock">GNTX</a></p><p><strong>Sector</strong>: Consumer discretionary</p><p><strong>Thesis</strong>: "Increasingly favorable underlying regional mix and strong product positioning should drive top tier supplier revenue growth through '22. … Despite modest share performance YTD (+2% vs. S&P +12%), industry supply chain headwinds should abate by 2H, cycle recovery remains in early stages, & volume/ margin mix benefit visibility remains high." — <em>David Kelley</em></p><p><strong>Price target</strong>: $43</p><p><strong>Upside to target</strong>: 26.0%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>12. Microchip Technology</h3><img src="https://static4.businessinsider.com/image/60c380ef6d855e00181578e8-400-300/12-microchip-technology.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/mchp-stock">MCHP</a></p><p><strong>Sector</strong>: Information technology</p><p><strong>Thesis</strong>: "We think the company will increase its dividend to its historical dividend payout ratio of 50% of free cash flow, from 20%-25% today, effectively, doubling the dividend. … We do not believe that the street fully appreciates the positive impact MCHP's de-leveraging and pending capital return cycle will have on its P/E multiple." — <em>Mark Lipacis</em></p><p><strong>Price target</strong>: $194</p><p><strong>Upside to target</strong>: 26.4%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>11. TJX</h3><img src="https://static1.businessinsider.com/image/60c388d46d855e001815793a-400-300/11-tjx.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/tjx-stock">TJX</a></p><p><strong>Sector</strong>: Consumer discretionary</p><p><strong>Thesis</strong>: "On the supply side, TJX should benefit from the current market dislocation including supply chain bottlenecks, which is leading to strong inventory supply, access to better, brands, and favorable mark-on. On the demand side, TJX should benefit from COVID continuing to disrupt the department store sector, which along with a growing consumer focus on value, is leading to accelerated migration from full-price to off-price." — <em>Janine Stichter</em></p><p><strong>Price target</strong>: $83</p><p><strong>Upside to target</strong>: 28.1%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>10. Walmart</h3><img src="https://static3.businessinsider.com/image/60c376a823393a00188e2a44-400-300/10-walmart.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/wmt-stock">WMT</a></p><p><strong>Sector</strong>: Consumer staples</p><p><strong>Thesis</strong>: "As WMT transforms from a traditional grocery-centered mass retail leader to a consumer-supplier products & services ecosystem and omni-channel platform, with a higher percentage of recurring revenue and growth opportunities, we look for upside to estimates and for the trading multiple to expand." — <em>Stephanie Wissink</em></p><p><strong>Price target</strong>: $184</p><p><strong>Upside to target</strong>: 31.6%</p><p><em>Source: Jefferies</em></p><p> </p></p><br/><br/><h3>9. Nice Ltd.</h3><img src="https://static1.businessinsider.com/image/60c378e923393a00188e2a4f-400-300/9-nice-ltd.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/nice-stock">NICE</a></p><p><strong>Sector</strong>: Information technology</p><p><strong>Thesis</strong>: "NICE is the global leader in contact center as a service (CCaaS) solutions with a significant growth runway ahead. … We believe the sharp pullback in shares in 2021 is overblown and investors are too focused on the less important Product and Services revenues instead of focusing on the more important Cloud segment." <em>— Samad Samana</em></p><p><strong>Price target</strong>: $300</p><p><strong>Upside to target</strong>: 32.1%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>8. Owens Corning</h3><img src="https://static1.businessinsider.com/image/60c3815b6d855e00181578eb-400-300/8-owens-corning.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/oc-stock">OC</a></p><p><strong>Sector</strong>: Industrials</p><p><strong>Thesis</strong>: "We believe the market under-appreciates the pricing opportunities in both roofing and insulation, which would result in significant margin expansion, earnings growth, and free cash flow generation. … The company is authorized and capable of repurchasing ~10% of its share count over the next several years." — <em>Phil Ng</em></p><p><strong>Price target</strong>: $135</p><p><strong>Upside to target</strong>: 36.4%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>7. Six Flags Entertainment</h3><img src="https://static5.businessinsider.com/image/60c386c76d855e0018157928-400-300/7-six-flags-entertainment.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/six-stock">SIX</a></p><p><strong>Sector</strong>: Consumer discretionary</p><p><strong>Thesis</strong>: "The business retooling initiative led by the new management has refined focus towards domestic operations and a more sustainable growth trajectory. … Pre-COVID, SIX indicated that single-day visits and attendance were up over double digits from the comparable year prior, reversing the negative trends that started the shares' down-trend in 2019." — <em>David Katz</em></p><p><strong>Price target</strong>: $59</p><p><strong>Upside to target</strong>: 37.2%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>6. PennyMac Financial Services</h3><img src="https://static5.businessinsider.com/image/60c384e923393a00188e2acc-400-300/6-pennymac-financial-services.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/pfsi-stock">PFSI</a></p><p><strong>Sector</strong>: Financials</p><p><strong>Thesis</strong>: "The company's expansion of its higher-margin direct to consumer channel (which is in the very early stages of growth) is a meaningful catalyst which insulates the company from broader pricing pressures on the mortgage industry." — <em>Ryan Carr</em></p><p><strong>Price target</strong>: $85</p><p><strong>Upside to target</strong>: 39.1%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>5. Carvana</h3><img src="https://static1.businessinsider.com/image/60c37e0323393a00188e2a78-400-300/5-carvana.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/cvna-stock">CVNA</a></p><p><strong>Sector</strong>: Consumer discretionary</p><p><strong>Thesis</strong>: "We consider CVNA a rare opportunity to participate in the early stages of a secular shift to e-commerce (~1% penetration today) within the massive $550B market for used cars. … We believe the market under-appreciates how trends in CVNA's market cohorts imply there is significant upside to consensus." — <em>John Colantuoni</em></p><p><strong>Price target</strong>: $375</p><p><strong>Upside to target</strong>: 40.5%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>4. Bright Horizons</h3><img src="https://static2.businessinsider.com/image/60c37ce923393a00188e2a71-400-300/4-bright-horizons.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/bfam-stock">BFAM</a></p><p><strong>Sector</strong>: Consumer discretionary</p><p><strong>Thesis</strong>: "Investors have been concerned about the potential impact of universal pre-K on the business … potential legislation likely does not influence BFAM's customers decisions as to where they will send their children. ... We also look for new employer-sponsored center openings particularly in under-penetrated verticals like industrials, tech, education and government." — <em>Hamzah Mazari</em></p><p><strong>Price target</strong>: $215</p><p><strong>Upside to target</strong>: 45.6%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>3. Freeport-McMoRan</h3><img src="https://static6.businessinsider.com/image/60c37f206d855e00181578cf-400-300/3-freeport-mcmoran.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/fcx-stock">FCX</a></p><p><strong>Sector</strong>: Materials</p><p><strong>Thesis</strong>: "The copper market is entering a multiyear period of growing deficits and higher prices due to cyclical demand upside, policy-driven secular demand drivers related to de-carbonization, and serious, worsening supply constraints. We forecast a peak annual average price of $7/lb in 2025. ... We expect Freeport to benefit from the combination of higher attributable copper volumes, a higher copper price, and, over time, declining capex." — <em>Chris LaFemina</em></p><p><strong>Price target</strong>: $60</p><p><strong>Upside to target</strong>: 49.6% </p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>2. Huntsman</h3><img src="https://static1.businessinsider.com/image/60c3809723393a00188e2a8b-400-300/2-huntsman.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/hun-stock">HUN</a></p><p><strong>Sector</strong>: Materials</p><p><strong>Thesis</strong>: "Huntsman combines operating leverage to a recovery in construction and automotive markets, significant regional exposure in China, a strong balance sheet and mid-cycle leverage. ... This should keep Huntsman's organic growth above GDP for the next several years." — <em>Laurence Alexander</em></p><p><strong>Price target</strong>: $44</p><p><strong>Upside to target</strong>: 63.3%</p><p><em>Source: Jefferies</em></p></p><br/><br/><h3>1. RingCentral</h3><img src="https://static2.businessinsider.com/image/60c3865a23393a00188e2ad3-400-300/1-ringcentral.jpg" alt="" /><p><p><strong>Ticker</strong>: <a href="https://markets.businessinsider.com/stocks/rng-stock">RNG</a></p><p><strong>Sector</strong>: Information technology</p><p><strong>Thesis</strong>: "RNG's stock has significantly underperformed this year as a result of overhangs from the Zoom lawsuit and Microsoft Teams moving more aggressively into Voice. However, we believe RNG's competitive advantages are real and the company will not only fend off, but thrive despite these competitive forces. Lastly, the company's three large partnerships are beginning to hit full stride, which could drive upside to consensus expectations over the next 12-24 months." — <em>Samad Samana</em></p><p><strong>Price target</strong>: $475</p><p><strong>Upside to target</strong>: 77.3%</p><p><em>Source: Jefferies</em></p><p> </p></p><br/><br/>
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