Here are 4 ‘sweet spot’ consumer staples stock picks from Jefferies

Key Points

Jefferies shares its best consumer staples stock ideas from its research team.
The firm has a $75 price target for Tyson Foods, representing 20 percent upside from Tuesday's close.

Jefferies shared with clients the firm's favorite current stock picks in the consumer staples sector. "Large-cap staples are in sweet spot this year: more foreign exposure, more stocks in fastest growing bucket, better quality, and better forward, trailing earnings and sales growth," strategist Steven DeSanctis wrote in a report Wednesday. "Of course, ETFs and passive investing are having a big influence on the performance of sectors. Staples is no exception and these vehicles might have an even bigger impact on these names. Large-cap staples have a big weight in low-volatility ETFs, and with the growth in these strategies, this has boosted large cap names more than small and mid," he added. Here are four consumer staples buy-rated companies Jefferies recommends and their price targets. 1) Tyson Foods (TSN) Jefferies analyst Akshay Jagdale has a $75 price target on Tyson Foods , representing 20 percent upside from Tuesday's close. "Our LT positive thesis is based on TSN's value-added growth which we now believe will be accelerated by the recent acquisition of AdvancePierre. In addition, we continue to see significant LT opportunity to unlock value from the chicken segment." 2) Wal-Mart (WMT) Jefferies analyst Daniel Binder has a $88 price target on Wal-Mart , representing 11 percent upside from Tuesday's close. "Walmart's investment in raising store standards and wages along with better training for its staff has led to a better in-store shopping experience. Management has also been controlling inventory better and negotiating better vendor terms, which has helped fund price cuts and resulted in better traffic trends." 3) Lamb Weston (LW) Jagdale has a $53 price target on Lamb Weston , representing 15 percent upside from Tuesday's close. "LW plays in the attractive frozen potato industry (primarily french fries) which continues to experience consistent, solid demand growth and LW is by far the best operator in the industry. In our view, the company's sustainable margins and attractive strategic value warrants a premium multiple and we continue to see meaningful earnings upside." 4) Ingredion (INGR) Jagdale has a $145 price target on Ingredion , representing 23 percent upside from Tuesday's close. "The operating environment in the core North America business remains favorable, we would expect the company to deploy a greater amount of excess cash to accelerate its specialty growth strategy via accretive acquisitions. In addition, recent market fears surrounding the potential impact of the renegotiation of NAFTA should abate in light of the new sugar suspension agreement between the U.S. and Mexico."

Tyson Foods' frozen chicken products.

Daniel Acker | Bloomberg | Getty Images

Jefferies shared with clients the firm's favorite current stock picks in the consumer staples sector.

"Large-cap staples are in sweet spot this year: more foreign exposure, more stocks in fastest growing bucket, better quality, and better forward, trailing earnings and sales growth," strategist Steven DeSanctis wrote in a report Wednesday.

"Of course, ETFs and passive investing are having a big influence on the performance of sectors. Staples is no exception and these vehicles might have an even bigger impact on these names. Large-cap staples have a big weight in low-volatility ETFs, and with the growth in these strategies, this has boosted large cap names more than small and mid," he added.

Here are four consumer staples buy-rated companies Jefferies recommends and their price targets.

1) Tyson Foods (TSN)

Jefferies analyst Akshay Jagdale has a $75 price target on Tyson Foods, representing 20 percent upside from Tuesday's close.

"Our LT positive thesis is based on TSN's value-added growth which we now believe will be accelerated by the recent acquisition of AdvancePierre. In addition, we continue to see significant LT opportunity to unlock value from the chicken segment."