Increasingly, the Wall Street firms we cover are starting to agree that, while the future is still bright for the U.S. economy, it also may be one of much lower stock market gains than has been the norm over the past decade. When that is the case, then investing strategies often shift from indexing to a more disciplined stock-picking routine. That’s when investors need solid growth ideas.
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Jefferies highlights its top growth stocks to buy each week, and this week is no exception. Like many on Wall Street, Jefferies analyst Aneta Markowska expects big-time 2021 gross domestic product prints. In fact, her projection is a stunning 6.4% GDP growth. So, adding some exciting growth stocks now makes sense for investors.

We found four that look like solid picks for more aggressive growth investors that all have significant catalysts to drive growth the rest of 2021 and beyond. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Caesars Entertainment

Shares of this well-known old-school gaming company offer solid upside. Caesars Entertainment Corp. (NASDAQ: CZR) provides casino-entertainment and hospitality services, primarily under the Harrah’s, Caesars, Horseshoe and Eldorado brand names.

Its facilities include gaming offerings, food and beverage outlets, hotel and convention space, and non-gaming entertainment options. Caesars Entertainment is one of the largest gaming companies in the world and currently owns or operates 50 casino properties in 13 states and in four other countries.

Also the largest casino company in the United States, Caesars Entertainment, recently bought a minority stake in fantasy sports platform, SuperDraft. Caesars has the option to increase its stake to 100% over time at predetermined levels. SuperDraft will join the Caesars online brands, which include World Series of Poker, Caesars Online Casino and William Hill, and it will become part of Caesars’ single wallet solution that allows members more options to play games both live and online.

Jefferies has an $85 price target on the shares, though the Wall Street consensus target is up at $89.92. Caesars Entertainment stock closed trading on Friday at $83.16 a share.

DraftKings

The company became a huge favorite with younger people due to the surge in popularity of fantasy football. DraftKings Inc. (NASDAQ: DKNG) operates as a digital sports entertainment and gaming company. It provides users with daily sports, sports betting and iGaming opportunities. It also is involved in the design and development of sports betting and casino gaming platform software for online and retail sportsbook and casino gaming products.
DraftKings entered the market in April 2020 at a time when most companies were putting off their initial public offerings. The offering was not an IPO in the truest sense because DraftKings came public through a merger with a special purpose acquisition company called Diamond Eagle, but similar rules applied, a practice that has grown exponentially since then.
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On the revenue side, DraftKings saw a 98% year-over-year surge to $132.8 million in the latest quarter, reported on November 13. The company raised its full-year 2020 revenue range to $540 million to $560 million, which equates to 25% to 30% annual revenue growth. DraftKings also introduced 2021 revenue guidance of $750 million to $850 million, which equates to 45% year-over-year growth using the midpoints. The company is expected to post fourth-quarter results on Friday.

The Jefferies price target is $67, which is higher than the $62 consensus target. Friday’s last DraftKings stock trade came in at $60.91 per share.

Extra Space Storage

This top real estate investment trust (REIT) has very solid upside potential for investors and is on the Jefferies Franchise List of top stock picks. Extra Space Storage Inc. (NYSE: EXR) is a fully integrated, self-administered and self-managed REIT headquartered in Salt Lake City, Utah. Like many self-storage companies, Extra Space offers rentable storage space offering customers conveniently located and secure storage units across the country, including boat storage, recreational vehicle storage and business storage.

As of the second quarter of 2020, the company owned or operated 1,878 self-storage stores in 40 states, Washington, D.C., and Puerto Rico. The portfolio consists of approximately 145.4 million square feet of rentable space and 1.4 million units, making the company the second-largest owner/operator of self-storage stores and the largest self-storage management company in the United States.

The analysts said this when discussing the industry:

Our most recent web-scrapes indicate that strong demand for self-storage units carried into the fourth quarter of 2020 and the first few weeks of 2021. While the winter months are usually a seasonally weak time for storage, we noted that into the end of 2020 and in the first few weeks of 2021, the Storage REITs have been pushing rents higher. We estimate that fourth quarter asking rents were about 5% higher than 3Q20 asking rents. Further, we pointed out that web traffic to Storage REITs remained elevated since spiking over the summer. We highlighted the company as our top pick as strong revenue management through the pandemic, the highest web traffic increase, and the second highest implied mark-to-market on rents, sets the company up for leading growth in 2021.

Extra Space Storage stock investors receive a dependable 3.01% distribution. The $135 Jefferies price target is well above the $125.54 consensus target. Shares closed at $119.63 on Friday.

Jazz Pharmaceuticals

This top stock is a great idea for investors seeking exposure to aggressive health care. Jazz Pharmaceuticals PLC (NASDAQ: JAZZ) is a biopharmaceutical company that identifies, develops and commercializes pharmaceutical products for various medical needs in the United States, Europe and elsewhere.
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The company has a portfolio of products and product candidates with a focus in the areas of sleep and hematology/oncology. The company’s largest products are Xyrem for narcolepsy (excessive daytime sleepiness), followed by Erwinaze for acute lymphoblastic leukemia and Defitelio for veno-occlusive disorder (blockage of blood vessels in liver).

Jazz Pharmaceuticals GW Pharmaceuticals recently announced a definitive agreement for the former to acquire the latter for $220 per American depositary share, for a total consideration of $7.2 billion. The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the second quarter of 2021.

The Jefferies team likes the deal and noted this:

After taking a look at the new company pro forma, we see low double-digit dilution to our current JAZZ fiscal year 2021 EPS, prior to low double-digit accretion in 2023, 25%+ accretion in 2024, and potentially 40% accretion by 2025. Based on our assumptions, we see the GW acquisition helping to smooth over the impact of the 2023 Xyrem loss of exclusivity and can envision strong double-digit EPS growth through 2025. We continue to like the combination and noted that there are likely sources of upside that aren’t included in our analysis such as cost and tax synergies, NOLs, etc.

Jefferies has set a price target of $190. The slightly higher consensus figure is $194.06, and Jazz Pharmaceuticals ended last week at $160.60 a share.

These four top growth stocks for investors include two red-hot companies cashing in on sports betting that could be massive long-term winners. Again, after a long rally that has put all the major indexes and the Russell 2000 near all-time highs, caution clearly is warranted here. It may be smart to buy a partial position and see if we don’t have a correction.

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