All the firms we follow here at 24/7 Wall St. keep a list for their institutional and retail clients of high-conviction stock picks. These are generally the stocks they not only like on a longer term basis, but those that usually have big upside to the assigned target price. With December here and 2021 right around the corner, many firms on Wall Street have tweaked their lists to account for potential changes in the new year.
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The analysts who contribute to the well-respected Raymond James Analysts Current Favorites list of stocks to buy have to provide one stock in their coverage space for inclusion in the list. Hence, it is considered a favorite choice. We screened the list looking for well-known stocks that are not overextended and overbought, and found five that look like very good ideas for growth investors looking to reset portfolios for the coming year. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

AutoZone

Given the ongoing lockdowns and stay-at-home edicts, people have plenty of time to work on their vehicles this year, and this is the retail leader. AutoZone Inc. (NYSE: AZO) is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States.

Each AutoZone store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts.

As of August 29, 2020, the company had 5,885 stores in the United States, 621 stores in Mexico and 43 stores in Brazil, for a total store count of 6,549.

The Raymond James price target on AutoZone stock is a stunning $1,565, which compares with the much lower Wall Street consensus target of $1,388.65 and a Monday closing price of $1,137.65.

CVS

This top stock gapped up in early November but has come back in and offers a much better entry point. CVS Health Corp. (NYSE: CVS) is one of the largest health care companies in the United States, providing retail, mail and specialty pharmacy dispensing services and pharmacy benefits. CVS has become one of the most vertically integrated publicly traded health care companies.

CVS serves employers, insurance companies, unions, government employee groups, health plans, prescription drug plans, Medicaid managed care plans, plans offered on public health insurance and private health insurance exchanges, other sponsors of health benefit plans and individuals. This segment operates retail specialty pharmacy stores and specialty mail order, mail order dispensing, and compounding pharmacies, as well as branches for infusion and enteral nutrition services

The company completed a $69 billion purchase of health care provider Aetna in November of 2018 and remains one of the top picks for 2021 and beyond.

Holders of CVS stock receive a 2.95% dividend. Raymond James has a price target of $90, while the posted consensus price target is $81.71. The shares closed at $67.79 on Monday.

Trading volume is exploding and looks to continue, and this stock is a great way to play that theme. Intercontinental Exchange Inc. (NYSE: ICE) was founded in 2000 as an over the counter (OTC) energy market and has since expanded both organically and through acquisitions. The firm offers central clearing services for the futures and OTC markets. Its primary products include agriculture, financial and energy contracts and credit default swaps.
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Earlier this year the company completed a transformational acquisition of NYSE Euronext that greatly diversifies the company while offering significant optionality. While the low interest rate environment certainly has been a tailwind for near-term growth, company management believes ICE Mortgage Services is well-positioned to generate 8% to 10% in annualized long-term growth over the next decade. As for the data business, growth in index revenue, fixed income capabilities and ESG position, ICE well for consistent 5% to 6% growth in this business as well.

Investors receive a 1.14% dividend. The $125 Raymond James target price is above the posted consensus target of $118.53. Intercontinental Exchange stock closed Monday’s trading at $105.51 a share.

Jabil

This technology outsourcing company does significant business with Cisco and its stock is a great way for more conservative investors to play technology. Jabil Inc. (NYSE: JBL) is the ultimate outsourcing stock for technology and more, offering electronics design, production and product management services.

Jabil provides electronic circuit design services, such as application-specific integrated circuit design, firmware development and rapid prototyping services, and it designs plastic and metal enclosures that include the electro-mechanics, such as the printed circuit board assemblies.

The company also specializes in the three-dimensional mechanical design, comprising the analysis of electronic, electro-mechanical and optical assemblies, as well as offers various industrial design, advance mechanism development and tooling management services.

Investors receive just a 0.81% dividend. The Raymond James price objective is $45. The consensus figure is $44.70, and the last Jabil stock trade on Monday came in at $38.22 per share.

Kansas City Southern

This top railroad stock could have a very solid 2021 with the prospect for an economic rebound. Kansas City Southern Inc. (NYSE: KSU) is a Class 1 North American railroad, with a nearly 6,000-track mile network, serving 10 states in the central and south-central United States, as well as Mexico.

With a network spanning across the U.S./Mexico border through Laredo, Texas, the company provides a direct connection between the United States and the industrial centers of Mexico. The company’s Mexican operating subsidiary, Kansas Southern de Mexico, is one of the two largest primary Mexican rail carriers.

The company is expected to generate $500 million in free cash flow for 2020, and analysts expect strong operating leverage potential as volumes start to rebound with an improving economy.

Shareholders receive a 0.92% dividend. Raymond James has set its price objective at $210. The consensus target price is $197.35, and Kansas City Southern stock was last seen trading at $186.17.

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These five stocks from the Analyst Favorite list at Raymond James all have a degree of a contrarian play to them, and all offer outstanding value in a time when the stock market is very rich and overbought as well. Plus, they look poised for a solid 2021, given the strong balance sheets and top-flight management teams.

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