When a market starts to get pricey like we are experiencing currently, the last thing investors want to see is companies in their portfolios missing earnings expectations. The only thing that can drive stocks higher when multiples are extended is higher earnings, and at this juncture, with second-quarter earnings reports right around the corner, it makes sense to be invested in large cap blue chips that look poised to exceed current expectations.

In a new research report, Jefferies analysts focus in on three blue chips stocks rated Buy that they feel have the potential to beat current second-quarter earnings expectations. With the market very edgy, and a host of potential volatility causing headline events on tap, all three make good sense now.

Charles Rivers Laboratories

This is one of the premier contract research companies in its sector. Charles Rivers Laboratories International Inc. (NYSE: CRL) provides essential products and services to help pharmaceutical and biotechnology companies, government agencies and leading academic institutions around the globe accelerate their research and drug development efforts. The company is focused on providing clients with exactly what they need to improve and expedite the discovery, early-stage development and safe manufacture of new therapies for the patients who need them.

The Jefferies analysts feel that the company’s presentation at its recent health care conference was extremely positive and they in turn raised the numbers for the second quarter and for all of 2016. They also lifted their 2017 earnings estimates to a level that is solidly higher than current Wall Street expectations.

The Jefferies price target for the stock is posted at $94, and the Thomson/First Call consensus estimate is $85.57. The stock closed most recently at $83.82 per share.

Home Depot

This company remains the undisputed leader in the home improvement retail category. Home Depot Inc. (NYSE: HD) is the world’s largest home improvement specialty retailer, with 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

Home Depot stores sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance and professional service programs to do-it-yourself (DIY), do-it-for-me (DIFM) and professional customers.

With summer here, some people think that Home Depot and other home improvement companies can benefit as new and existing home sales continue to be strong and consumers are feeling much more confident than even this time last year. Earnings gains have consistently been in the 15% to 20% range, and a consensus of analysts is forecasting earning increases to continue to grow at about 15% annually for another two to three years.

The Jefferies team feels that, after an early spring slowdown, sales have picked up, and they also sense that the home improvement giant is managing overall inventory better and is improving inventory turnover.

Home Depot investors are paid a 2.2% dividend, The Jefferies price target is posted at $156, well above the consensus price objective of $147.29. Shares closed Wednesday at $126.53 apiece.

Procter & Gamble

This stock is trading at almost the same level it was this time last year, in part because it has a very large 65% of sales directed to foreign customers, which should improve as the dollar’s run has slowed dramatically. Procter & Gamble Co. (NYSE: PG) is a solid consumer staples stock for conservative investors to consider.

The company sells lots of very well-known household items that are essential for everyday life, and it operates through five segments: Beauty, Hair and Personal Care; Grooming; Health Care; Fabric Care and Home Care; and Baby, Feminine and Family Care.

The company posted an earnings beat for the fiscal third quarter, and the Jefferies team, which just initiated the company at a Buy rating, feel that the new focus on a slimmed down product portfolio will help spur earnings growth and return the company to its long-time premium consumer staples multiple. The analysts estimates for the next two years are 2% above current Wall Street expectations.

Shareholders are paid a very solid 3.2% dividend. Jefferies has a $95 price target on the stock, and the consensus target is lower at $82.95. The stock closed most recently at $83.95.

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Three outstanding blue chip stocks with solid chances to exceed current earnings expectations. With a nervous market, all three make sense for investors looking to add stocks that can do well regardless of the current climate.

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