We are almost halfway through 2024, and the stock market is putting on a masterclass performance. The S&P 500 is up 12% year-to-date after rising 23% last year. Back-to-back years of double-digit gains make finding stocks that can continue on such a torrid trajectory difficult.
Yet analysts at Jefferies Financial Group (NYSE:JEF) have zeroed in on a handful of stocks they think can maintain that pace. Within the past two weeks, they plucked these three stocks for double-digit returns over the next 12 months. These companies have one-year price targets ranging from 52% to 120% for an average 83% return.
So strap in as we climb aboard to understand why Wall Street is so bullish about these stocks for double-digit returns.
Stocks for Double-Digit Returns: Flutter Entertainment (FLUT)
International sports betting giant Flutter Entertainment (NYSE:FLUT) dropped sharply last month after two sports betting scandals erupted and several states proposed hiking taxes on the industry.
Jefferies analyst James Wheatcroft, however, says it’s blown out of proportion. He kept his buy rating on the FanDuel sports betting platform owner and has a one-year price target 52% above its current $183 per share price.
Flutter Entertainment just made the NYSE its primary stock exchange. This move underscores the importance of the U.S. market to Flutter’s operations, which represent 42% of total revenue.
FanDuel is the leading sportsbook with a 52% share. It recently launched in North Carolina, which Wheatcroft says was Flutter’s second-best launch ever.
The sportsbook should continue growing despite twin betting scandals in basketball and baseball, which are bringing more scrutiny to the industry. Wheatcroft also minimized the impact proposed tax hikes in Illinois and New Jersey would have.
Illinois wants to raise the tax on sportsbooks from 15% to 40%, while New Jersey is mulling hiking taxes from 14% to 30%. Other states like Massachusetts have rejected tax hikes. Because large sportsbooks like FanDuel have attained such mindshare already, they don’t have to spend as much on advertising and can direct resources to cover any incidental increases they see in taxes. Flutter’s marketing expenses were down 410 basis points in the first quarter.
Wheatcroft says the drop in Flutter Entertainment’s stock due to the background noise is “overdone.”
Exact Sciences (EXAS)
Exact Sciences (NASDAQ:EXAS) is another stock that is having a difficult 2024 but maintaining the support of Wall Street. Despite shares being down 42% this year, Jefferies initiated coverage of the leading colon cancer screening company with a buy rating and $75 per share price target, implying a 78% upside in the stock.
Jefferies’ target is actually lower than its peers as the consensus price target on Exact Sciences is $93 per share or 120% upside potential.
Exact is off to a rocky start this year due to weaker-than-expected first-quarter results, which are due to the seasonality of its business and an exceptionally strong comparison to last year. The back half of the healthcare stock’s year is expected to be much stronger.
The company offers a stool-based testing kit for colon cancer. Although a colonoscopy is considered the quintessential test for colon cancer, Exact’s stool-based test is much more accessible to many people. That’s why Wall Street is not especially concerned about the potential adoption of a blood test for the disease.
Pacific Biosciences (PACB)
Jefferies also initiated coverage of biotech stock Pacific Biosciences (NASDAQ:PACB), a company long-favored by investing guru Cathie Wood through her Ark Invest exchange-traded funds. The Wall Street firm started off with a buy rating and a $4 per share one-year price target. That implies a 120% upside potential from its current $1.82 per share price, which is again low from the consensus outlook.
Wall Street has a $6.38 per share target for the stock, indicating substantial 250% growth is in the cards. Analysts agree with Wood that the delivery of precision therapies to cure troubling diseases is a big growth industry.
Pacific Biosciences makes gene sequencing equipment that biotechs can use to unlock the human genome. Yet the genomics stock hasn’t been able to turn a profit, although it recorded narrower adjusted net losses of $1.11 per share last year. It lost $1.38 per share the year before.
Pacific Biosciences continued that trend in the first quarter, narrowing its losses again from 36 cents to 29 cents per share. PACB stock, however, has primarily traded sideways since then. Jefferies obviously sees an inflection point approaching.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
