One thing is becoming crystal clear as the first quarter earnings roll in fast and furious. Even if a company that is a leader in its sector comes in at the estimates or even light, if the overall metrics are intact, and things look to be better the rest of the year, the market is not overly punishing companies. That shows a degree of patience that is often lacking if the market is way overbought and frothy.

This week’s top growth stock picks from Jefferies stay with some large cap blue chip leaders, two of which that did miss on some Wall Street analysts estimates or guided future numbers lower. Jefferies makes the solid case that the past quarter should not be held up as a road map for the future, which makes good sense with solid companies.

Alphabet

This technology giant is a top pick at Jefferies and is on the Franchise picks list. Alphabet Inc. (NASDAQ: GOOGL), through its subsidiaries, builds technology products and provides services to organize the information. The company offers Google Search, which provides information online, and Google Now, which offers information to users when they need it.

It also provides YouTube, which offers video, interactive and other ad formats. Android is an open source mobile software platform. Its hardware products include Chromebook, Chrome OS devices, Chromecast and Nexus devices. Google Play is a cloud-based digital entertainment store for apps, music, books and movies, while Google Drive is a place for users to create, share, collaborate and keep their stuff. Google Wallet is a virtual wallet for in-store contactless payments.

Top Wall Street analysts cite the company’s growing presence in the cloud, which some ultimately feel can be a $7 billion revenue opportunity by 2020. The current cloud products offered by the company are improving, and the analysts cite five potential strengths and key potential adoption drivers for the company.

Many Wall Street analysts have lauded the numerous upcoming catalysts and point out that the company showed consistent revenue growth and margin stabilization, and finally gave cash back in the form of a $5.1 billion stock buyback last year. Last, but certainly not least, the company remains one of the best overall portfolio plays that focuses on the biggest Internet trends: the mobile/multiscreen shift, wearable devices, video, the Internet of Things and much more. Alphabet delivers investors the full package.

While the company modestly missed revenue expectations last week, core margins were up smartly. Jefferies is a buyer of the stock into the weakness and cited three specific reasons for being positive going forward:

1. YouTube is the premier vehicle to play online video, and Google Sites paid clicks increased 38% in the first quarter of 2016.
2. Mobile search, which has continued to grow at a frantic pace, was the number one revenue driver silo for the first quarter.
3. The chief financial officer is implementing very shareholder friendly policies, and the company bought back $2.3 billion worth of stock in the first quarter.

Alphabet’s empire isn’t going anywhere, but investors do have a chance to buy shares at a nice discount to last week.

The Jefferies price objective for the stock is $925, and the Thomson/First Call consensus target price is $911.07. The shares closed Tuesday at $725.37.

Anacor Pharmaceuticals

This biopharmaceutical company has been hit hard as upheavals in the specialty pharmaceutical area have proved damaging to all. Anacor Pharmaceuticals Inc. (NASDAQ: ANAC) is focused on discovering, developing and commercializing novel small-molecule therapeutics derived from its boron chemistry platform.

Anacor’s first approved drug, Kerydin (tavaborole) topical solution, 5%, is an oxaborole antifungal approved by the U.S. Food and Drug Administration (FDA) in July 2014 for the topical treatment of onychomycosis of the toenails. In July 2014, Anacor entered into an exclusive agreement with Sandoz, a Novartis company, pursuant to which PharmaDerm, the branded dermatology division of Sandoz, distributes and commercializes Kerydin in the United States.

Jefferies notes that the company reported lower than expected earnings recently on softness in the Kerydin numbers, but the firm also notes that Crisaborole, an investigational non-steroidal topical PDE-4 inhibitor for the potential treatment of mild-to-moderate atopic dermatitis and psoriasis, is still the big story at the company should get FDA approval in 2017.

The analysts attended the American Academy of Dermatology conference and mentioned a buzz for various new atopic dermatitis therapies, including Crisaborole. They feel that Crisaborole peak sales will be $1 billion or more, and that was reinforced based on their discussions and the new data. Plus, they note that the fact that it is not asteroid is a positive from a safety concern level.

Jefferies has a $105 price target. The consensus estimate is $131.25. The stock closed Tuesday at $68.01.
O’Reilly Automotive

The automotive parts sector has been, and has stayed, on fire for the past couple of years. O’Reilly Automotive Inc. (NASDAQ: ORLY) is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional service provider markets.

Its stores also offer enhanced services and programs comprising used oil, oil filter and battery recycling; battery, wiper and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; professional paint shop mixing and related materials; and machine shops. Its stores provide customers a selection of brand name, house brands and private label products for domestic and imported automobiles, vans and trucks.

The company reports Wednesday after the close, and the Jefferies team is bullish on what they think will be solid numbers. They cite the mild winter and the leading comparables given the regional store mix. They also note the higher miles driven in the quarter in the western and southern regions of the country.

Many on Wall Street have applauded the company and see near-term secular growth and gains in market share driven by high quality of services and strong management.

The Jefferies price target is $325, and the consensus target is $295.47. The stock closed on Tuesday at $272.34.

Visa

This top credit card issuer is a leader in digital pay. Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments.

The company operates one of the world’s most advanced processing networks, VisaNet, that is capable of handling more than 56,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products.

The company reported numbers last week that slightly beat on the top and bottom lines, but it also guided some forward estimates lower and amended the Visa Europe deal. Jefferies feels that despite the lowered 2016 numbers, management’s commentary suggests that 2017 will show a strong pick up.

Visa shareholders receive a 0.72% dividend. The Jefferies price target is $93. The consensus target is $88.58. The stock closed Tuesday at $78.53.

Four top growth stories for more aggressive growth accounts to buy now. With some of them offering outstanding entry points, and already having the quarter behind them, they make good sense for investors looking to perhaps shift capital and take profit on winners.

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