Jefferies picks the stocks with ‘easy targets’ as growth starts to slow

Published Mon, Aug 16 20217:30 PM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

Analysts from investment firm Jefferies have picked multiple stocks they say have "easy targets," with positive earnings revisions, including tech, chipmakers, health care and energy firms in the U.S. and around the world. The bank noted that 72% of companies globally have beaten their earnings estimates for the second quarter of the year, but it expects earnings to slow down. "As we move into 2H'21, the low base effect of 2020 has started to fade. This year has turned out to be one of the best growth years recently, but it also sets a very high bar for the future," Jefferies analysts stated in a research note on Friday. With this in mind, the bank picked dozens of U.S. and global stocks on its lists of "companies with easy targets" for the second half of the year. All firms have a market capitalization of more than $2 billion and had "positive" earnings revisions for the past one month and three-month periods. They also have a "strong" first half run rate, meaning their first half or full-year earnings ratio is higher than for the 2017 to 2019 period average, according to Jefferies. Its U.S. picks include several real estate investment trusts such as Equity Residential , Prologis , VICI Properties and Extra Space Storage . Also on its U.S. list are tech companies Facebook and Iron Mountain , banks including Citizens Financial Corp and SVB Financial Group and energy companies such as Southern Company , Evergy and Pinnacle West Capital . European companies on Jefferies "easy targets" list include British health care firm Hikma Pharmaceuticals and Swedish drug company Orion , as well as chip maker STMicro and semiconductor suppliers ASM International and ASML . Tech companies on the list include software firm Nemetschek and hardware company Hexagon . Jefferies Asia-Pacific (excluding Japan) "easy targets" list includes tech manufacturers Unimicron , Acer and Yageo , financial firms Industrial Bank of Korea and Krung Thai Bank , and semiconductor companies Realtek , Phison Electronics and Powertech Technology.

Michaela Rehle | Reuters