Jefferies adds 5 new stocks to Franchise Picks list, highlighting potential in various industries.

From Investing.com: 2024-12-20 07:23:59

Jefferies updates Franchise Picks list with five new high-conviction stocks including Caterpillar, EPAM Systems, Flowserve, TransDigm Group, and Ventas. These stocks join 17 others on the list representing top Buy-rated ideas with catalysts and favorable valuations.

Caterpillar highlighted for exposure to infrastructure and commodity industries with projected peak sales of $70 billion. Trading at a 15x EV/EBITDA multiple, Jefferies estimates over 40% potential upside to $560 per share.

EPAM Systems expected to benefit from IT services clients increasing discretionary spending in 2025. Recent expansion efforts signal confidence in growth prospects with potential mid-single-digit growth as it trades near the lower end of its P/E range.

Flowserve positioned to benefit from strong demand in oil and gas, power, and pipeline markets with expected mid-teens EPS growth through 2027. Forecasts over 5% annual organic growth and margin expansion driving valuation multiple growth.

TransDigm Group’s aftermarket aerospace business seen as strong due to aging aircraft fleets and OEM capacity constraints. Jefferies believes potential margin compression concerns are overblown, forecasting significant upside.

Ventas expected to see improving occupancy rates in senior housing, with same-store NOI growth of 7%+ annually. Transition to the senior housing operating platform model seen as closing the valuation gap with peers, according to Jefferies.



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