With earnings season in full force this week, the presentation of quarterly numbers will likely drive the direction of many stocks. Despite a huge turnaround by the markets on Friday, there is still a large contingent of financial pundits that remain nervous, and volatility may remain high. A new report from Jefferies scans the horizon for stocks that have catalysts this week that could drive share prices higher.
Here are the five stocks that Jefferies highlights in its research report that have catalysts that could be important this week. All five are rated Buy.
Abbott Laboratories (NYSE: ABT) reports earnings on Wednesday and is Jefferies number two ranked stock pick globally. Because a product recall last year hammered earnings, the Jefferies analysts see very easy comparisons for the company this quarter. They also expect further significant underlying margin expansion on top of natural operating leverage as the company increases focus on purchasing as well as overhead. The Jefferies team is $0.02 higher than the street estimate for earnings per share.
Abbott investors are paid a 2.15% dividend. The Jefferies price target for the stock is $52. The Thomson/First Call consensus target is $44.79. Shares closed trading on Friday at $40.86.
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Amazon.com Inc. (NASDAQ: AMZN) reports earnings on Thursday and the Jefferies analysts feel that the online retail giant will surpass expectations as it continues to dominate market share and drive growth into the busy holiday season. They also believe Amazon’s evolving fulfillment strategy is enabling even faster delivery and helping it minimize chances of missed shipping deadlines. Amazon remains Jefferies top large cap e-commerce stock pick.
Jefferies price target for Amazon is posted at $435, and the consensus target is at $392.43. The stock closed Friday at $303.64 a share.
NXP Semiconductors N.V. (NASDAQ: NXPI) will report earnings on Wednesday and the analysts at Jefferies are a full 5% higher than the rest of Wall Street estimates. They expect increased iPhone 6 silicon content and expectations that the Chinese government-mandated bank card replacement cycle will drive top line growth. They also see the company’s November 5 analyst day and the near field communications (NFC) growth for Apple Pay and Google Wallet as future catalysts to drive share price higher.
The Jefferies price target is $80, and the consensus target is $75.14. Shares ended trading on Friday at $60.42.
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Shire PLC (NASDAQ: SHPG) reports earnings on Friday and is a top large-cap name to make the catalyst list at Jefferies, and it is down a gigantic 35% in less than three weeks. The stock was absolutely destroyed last week when AbbVie made it clear with tax inversion benefits gone that it may want out of the planned acquisition of the company. Jefferies feels that with the AbbVie deal over, the company could become a target for Allergan. Shire had repositioned its business in 2013, undertaking a realignment program with strategic focus on rare diseases and greater operational discipline. Shire has drugs for ulcerative colitis and hereditary angioedema in its portfolio. It also has the top-selling Adderall XR for the treatment of ADHD.
The Jefferies price target is $265, and the consensus target for the stock, which may be reset as the acquisition is over, is $241.38. The stock closed Friday at $179.15.
Textron Inc. (NYSE: TXT) reports earnings Tuesday and is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee and Textron Systems. The Jefferies team noted that the new CEO reported business jet sales had been very strong during the quarter. The company will debut its first fully configured Latitude at NBAA next week, and that could drive orders.
Textron investors are paid a small 0.2% dividend. The Jefferies target is $46, and the consensus target is lower at $43.29. Textron closed Friday at $36.65.
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While most of the catalysts are upside earnings surprises, any combination of that with solid forward guidance could give any of these top stocks to buy a larger boost.
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