Here are Barclays' top stock picks for the second half

Published Mon, Jun 26 20174:55 PM EDTUpdated Sat, Oct 14 201710:44 AM EDT

Key Points

Barclays selected 42 stocks to watch as summer begins.
The firm said its selections are its analysts' best high conviction, bottom-up stocks within their industry coverage.
Here are five U.S. stock picks with potential for biggest upside.

Barclays released a second quarter update to its top stock picks, selecting 42 stocks to watch as the summer begins. According to a note on Monday, "each of our Top Picks is an analyst's single-best high-conviction bottom-up stock selection within the associated coverage industry, a compelling fundamental investment case with significant upside potential to its current price target." Here are five U.S. stocks with the highest potential to gain, based on Barclays analysts' price targets: 1. PDC Energy (P DCE) Barclay's PDC Energy price target is $80, representing 79 percent upside from Friday's close. PDC's earnings report is scheduled for August 8. "PDC Energy's stock price has underperformed high growth peers by 13% year-to-date while its relative valuation discount is currently 25%, perhaps prompted by concerns around the resilience of its asset base to lower oil prices. We believe the wide discount is unjustified based on our expectations of comparable balance-sheet-adjusted production growth and capital efficiency between PDC and peers over the next several years." 2. Goldcorp Inc. (GG) Barclay's Goldcorp price target is $18, representing a 30 percent upside from Friday's close. Goldcorp is set to release earnings on July 26. "GG offers the market a profile of solid production growth and lower all-in sustaining costs (AISC) over the next five years that outpace the aspirations of several of its peers. We believe that these goals are achievable and that the stock should outperform as the company delivers on its set annual operating targets, shows incremental progress on its project pipeline, and demonstrates exploration success around its existing assets." 3. Lululemon Athletica Inc. (LULU) Barclay's Lululemon Athletica price target is $85, representing a 54 percent upside from Friday's close. "While short-term operational issues drove comp weakness at the start of 2017, longer term we see no reason, outside of increased competition, Lululemon can't return to its prior mid- to high-single-digit annual run rate. Our recent work on brand interest gives us confidence that the company remains head and shoulders above the competition (excluding the global athletic brands) and we believe the 8% comp result that LULU achieved against two years of difficult comparisons in 4Q16 further demonstrates that the proliferation of Athleisure brands isn't impacting its business." 4. United Continental Holdings, Inc. (UAL) Barclay's United Continental Holdings price target is $105, a 37 percent upside from Friday's close. "United Continental Holdings is our most compelling stock recommendation within the deep value airline sector. The company has recently undergone a meaningful change in leadership that we expect will improve the culture and focus of the organization. Plans to match or exceed industry-leading margins through a variety of revenue and cost initiatives could improve United earnings by more than 40% from 2017 to 2020." 5. Jazz Pharmaceuticals PLC (JAZZ) Barclay's Jazz Pharmaceuticals price target is $200, representing a 26 percent upside from Friday's close. Jazz Pharmaceuticals is expected to release its earnings report on August 8. "Jazz Pharmaceuticals remains a solid standout in our specialty pharma coverage and we believe the 2017 outlook remains strong, with stable Xyrem performance and life cycle efforts under way, anticipated Vyxeos approval, and growth in the Defitelio franchise after the U.S. launch. JAZZ's recent settlement with first-filer Hikma preserves significant economics around the Xyrem franchise and delays generic entry until 2026. Recent JZP-110 data, presented at the annual SLEEP conference, underscores the significant market opportunity for the product, especially if the company receives a broad excessive sleepiness label down the road." —CNBC's Michael Bloom contributed to this report.

A customer looks at sports bras inside a Lululemon Athletica store.

Xaume Olleros | Bloomberg | Getty Images

Barclays released a second quarter update to its top stock picks, selecting 42 stocks to watch as the summer begins.

According to a note on Monday, "each of our Top Picks is an analyst's single-best high-conviction bottom-up stock selection within the associated coverage industry, a compelling fundamental investment case with significant upside potential to its current price target."

Here are five U.S. stocks with the highest potential to gain, based on Barclays analysts' price targets: