Health and Healthcare

Jefferies Analysts Out With Top Stock Picks Before Big Health Care Conference

Lee Jackson

Published: June 4, 2018 10:05 am

Last Updated: January 11, 2020 10:49 pm

With the official start of summer just a few short weeks away, so is the Wall Street annual conference schedule, as the warm summer days and nights are much more preferable to attendees than the snow and cold in the winter. This week, Jefferies continues to kick off the season with the firm’s annual health care conference, held June 5 through June 8 in New York City. This very popular event should see big attendance, with most of the top health care companies in the industry present.

A new Jefferies research report previewing the conference showcases some of the firm’s top picks and some of their top questions for those presenting and attending.

Sixteen companies are highlighted, and shares of all are rated Buy at Jefferies. Here we focused on five of the higher profile companies. It’s important to note that often catalysts come out of the conferences, so it can make sense to buy shares in front of the presentations.

Abiomed

Many on Wall Street feel this top company has virtually no competition in its space. Abiomed Inc. (NASDAQ: ABMD) engages in the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. It also provides continuum of care to heart failure patients.

The company offers Impella 2.5 catheter, a percutaneous micro heart pump with integrated motor and sensors for use in interventional cardiology; Impella CP that provides partial circulatory support using an extracorporeal bypass control unit; Impella 5.0 catheter and Impella LD, which are percutaneous micro heart pumps with integrated motors and sensors for use primarily in the heart surgery suite; and Impella RP, a percutaneous catheter-based axial flow pump.

The Jefferies price target for the stock is $460, and the Wall Street consensus target is $381.11. Shares traded early Monday at $395.55.

AxoGen

Jefferies started coverage on this top biotech/medtech firm last year with a Buy rating. AxoGen Inc. (NASDAQ: AXGN) offers surgical solutions for peripheral nerve injuries. It provides products and education to improve surgical treatment algorithms for peripheral nerve injuries. Its portfolio of products includes Avance Nerve Graft, AxoGuard Nerve Connector, AxoGuard Nerve Protector and Avive Soft Tissue Membrane.

The company also offers the AxoTouch Two-Point Discriminator and the AcroVal Neurosensory and Motor Testing System. These evaluation and measurement tools assist health care professionals in detecting changes in sensation; assessing return of sensory, grip and pinch function; evaluating treatment interventions and providing feedback to patients on nerve function.

Jefferies has a $45 price target, while the consensus figure is set at $44. However, the stock was trading at $51.00.

Danaher

This top life sciences company is a favorite across Wall Street. Danaher Corp. (NYSE: DHR) is now one of the largest and most diversified life sciences companies. Its products include analytical instruments and consumables for life sciences research, diagnostics, dental instruments and consumables, as well as equipment and services used in water quality testing and product identification.

The company is known as having leading brands across many verticals, with a strong management team and a record of superior execution. Jefferies sees core growth continuing to accelerate via acquisitions, noting that the company is focused on growth markets with recurring revenue streams and high gross margins.

Shareholders receive a 0.65% dividend. The $115 Jefferies price target compares with the consensus target of $111.44. Shares were last seen at $101.05.

Gilead Sciences

This stock is trading a very reasonable 10.6 times estimated 2018 earnings. Gilead Sciences Inc. (NASDAQ: GILD) is a biopharmaceutical company that discovers, develops and commercializes therapies for the treatment of HIV/AIDS, liver disease, cancer and inflammation. The recent acquisition of KITE allows for entry into the CAR-T space, indicating a renewed focus in oncology.

The company’s products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost and Vitekta for the treatment of human immunodeficiency virus (HIV) infection in adults; and Harvoni, Sovaldi, Viread and Hepsera products for the treatment of liver disease.

Gilead also has a large pile of cash overseas that the analysts feel may come back stateside with a low repatriation rate. They also see the stock a cheap biotech play with 10% to 15% free-cash-flow yield and balance sheet optionality, and Wall Street expectations continue to remain low.

Shareholders receive a 3.35% dividend. Jefferies has set its price objective at $95. The consensus price target is $85.81, and shares traded at $68.30.

Haemonetics

This one has been touted as a potential takeover target as it may be a very solid fit for a bigger medical devices player. Haemonetics Corp. (NYSE: HAE) is a health care company that globally provides products for processing, handling and analysis of blood.

It offers plasma collection and storage products, including PCS brand plasma collection equipment and disposables, plasma collection containers, and intravenous solutions, as well as information technology platforms for plasma customers to manage their donors, operations and supply chain.

The Jefferies price target is $95. The consensus target is $84.71, and shares traded at $91.15.

While the health care sector as a whole has had its ups and downs over the past 12 months, there is no question that mergers and acquisitions can spike interest in the companies fast. Many on Wall Street feel that is exactly what could propel the sector going forward. Big biotech and big pharmaceutical companies are cash rich, and many may be repatriating huge sums this year from overseas to make strategic purchases.