As is the case every year, the major Wall Street firms we cover here at 24/7 Wall St. come out with lists of stocks they feel will be the top performers for the coming year. While 2020 has been a veritable train wreck compared to most years, with everything from the pandemic that has crippled the economy on and off and killed hundreds of thousands of Americans, to a roller-coaster stock market that dropped 35% in less than a month and has since rallied to all-time highs, and more. Nonetheless, the analysts across Wall Street are doing their jobs, and the top picks are coming out fast.
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Many across Wall Street feel that health care will continue to remain strong in 2021, and Jared Holz, who covers the sector at Jefferies, remains positive as well. A recent research report this was noted about the sector:

Despite an overwhelming consensus view to own value-oriented stocks as economic normalcy inches closer (via vaccine administration), Jared believes growth-oriented stocks will continue to lead the way in Healthcare. He encourages investors to stick with themes that will see sustained momentum into 2021, while leaving some room for stocks/sub-sectors that will participate with cyclical improvement (even if more theoretical) into the early portion of next year.

Five stocks are favorites and all are rated Buy at Jefferies. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Avantor

This off-the-radar stock has outstanding upside potential. Avantor Inc. (NYSE: AVTR) was formed by the 2017 merger of Avantor Performance Materials and VWR. Avantor is a manufacturer of advanced materials and a distributor of chemicals, reagents, laboratory products and equipment, to customers in the biopharmaceutical, health care, education and government, and advanced technology and applied materials industries.

The company also offers a wide range of specialty procurement and other value-added laboratory services to help customers in their research and development and manufacturing operations. Avantor is among the companies expected to see an overall sales boost of at least 15%, thanks to the firm’s bioprocessing research work.

In addition, Avantor recently opened its new biorepository and sample archiving facility in Europe. Strategically located near the international airport in Frankfurt, Germany, the new facility enables researchers to have access to their samples for future research and analysis, or study validation, within 24 hours.

Jefferies has a $30 price target on the shares, which compares with the $28.40 Wall Street consensus target. Shares have traded around $27 in recent weeks.

This stock could see a benefit from the roll-out of the COVID-19 vaccine. Catalent, Inc. (NYSE: CTLT) is a contract development and manufacturing organization for the pharmaceutical and biotech industries.
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Catalent offers advanced drug delivery technologies, as well as drug development and manufacturing solutions for pharmaceuticals, biologics and consumer health products. Through its services and expertise, the company seeks to help customers bring products to market faster, enhance product performance and provide reliable clinical and commercial product supply.

The Jefferies price target is $115, while the consensus target is $112.64. The shares slipped below $103 on Tuesday.

Guardant Health

This company posted solid results last month and is another top idea at Jefferies. Guardant Health Inc. (NASDAQ: GH) is a high-growth genomics-based molecular diagnostics company that develops and commercializes precision medicine tests for the study and treatment of cancer.

The company is an early mover and leader in the emerging liquid biopsy-based cancer testing market. The company has one commercial clinical product, a gene panel called Guardant360, and an intriguing pipeline of potentially disruptive products. Guardant Health also has numerous biopharma research and development and companion diagnostics partnerships.

The company delivered good third-quarter results with revenues up 23% year over year, helped by higher average selling prices and Medicare appeals. Clinical volume was up 28% year over year 24% quarter over quarter. Analysts expect additional average selling price improvements following the recent G360 FDA approval.

The $145 Jefferies price target compares with the $137.78 consensus target. Shares slipped below $125 apiece on Tuesday.

HCA Healthcare

This is a market leader and is a good idea for more conservative investors looking for health care positioning. HCA Healthcare Inc. (NYSE: HCA) offers health care services. It provides diagnosis, treatments, consultancy, nursing, surgeries and other services, as well as medical education, physician resource center and training programs. It serves patients in the United States, operating from its network of approximately 185 hospitals and 2,000 sites of care.
With its founding in 1968, HCA Healthcare created a new model for hospital care in the United States, using combined resources to strengthen hospitals, deliver patient-focused care and improve the practice of medicine. The company has conducted a number of clinical studies, including one that demonstrated that full-term delivery is healthier than early elective delivery of babies and another that identified a clinical protocol that can reduce bloodstream infections in ICU patients by 44%.

Shareholders receive a 0.61% dividend. Jefferies has set a $175 price target. The consensus target is $165.95, and shares have traded around $164 in recent days.
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Hologic

This lesser known stock is another favorite across Wall Street, and the company posted good results last month. Hologic Inc. (NASDAQ: HOLX) is a leading manufacturer of medical device products focused on the heath care needs of women.

The company’s portfolio includes products for mammography, breast biopsy, early-stage breast cancer treatment, diagnostics, menorrhagia treatment, the removal of uterine fibroids and medical aesthetics products.

Hologic announced last week that 3D ultrasound imaging is now available on the SuperSonic MACH 40 ultrasound system. Clinicians can now access high-resolution B-mode and ShearWave PLUS elastography 3D volumes, which are designed to enhance diagnostic certainty.

With the 3D volumetric data acquired on the SuperSonic MACH 40 system, clinicians can see areas of interest from a new perspective. Breast tissue can be visualized in any scanning plane of the 3D volume, including coronal or C-plane. MultiSlice display allows these 3D volumes to be viewed slice by slice, while MultiPlanar display virtually reconstructs the slices in any orientation using the acquired and stored volume. The system’s volumetric transducer allows users to acquire these 3D images easily and rapidly with no resolution loss, regardless of where a lesion is located within the breast.

Jefferies has set a $98 price target. The consensus target is $86.92. The stock traded near $75 before Christmas but was last seen closer to $72 a share.

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These are five top picks for 2021 from Jefferies for investors looking to add health care stocks to their portfolios. While certainly not as risky as some high-flying biotechs, they are better suited for growth stock investors with a higher risk tolerance. Those looking more for safety and income should consider large-cap pharmaceuticals.

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