Investment
bank
Jefferies
has
revealed
its
top
stock
picks
that
are
exposed
to
major
themes
like
innovation,
new
products,
and
emerging
markets.
The
table
below
highlights
five
of
its
“Top
Picks”
with
the
biggest
upside
potential.
Prudential
Jefferies
said
Prudential
,
a
U.K.-listed
life
insurance
provider
focused
on
Asia,
has
seen
its
sales
bounce
back
strongly,
with
annual
premiums
up
40%
in
the
first
nine
months
of
2023
compared
to
2019
pre-pandemic
levels.
The
bank’s
analysts
believe
Prudential
will
continue
gaining
market
share
amid
economic
uncertainty
in
mainland
China.
Meanwhile,
Prudential’s
new
chief
executive,
Anil
Wadhwani,
has
said
the
company
will
diversify
its
future
business
towards
India
and
Africa
after
it
was
hit
hard
by
Beijing’s
zero-Covid
policy.
The
investment
bank
forecasts
Prudential
shares
will
rise
118%
to
18,000
British
pence
over
the
next
12
months.
U.K.
shares
are
generally
priced
in
pence,
with
100
pence
equal
to
one
British
pound
($1.27).
Alibaba
Chinese
e-commerce
giant
Alibaba
is
in
Jefferies’
latest
“Global
Best
Ideas”
list.
The
company
recently
unveiled
organizational
changes
under
new
group
CEO
Eddie
Wu.
In
a
note
to
clients
on
Jan.
30,
Jefferies
analysts
said
that
with
Wu
taking
over
leadership
of
Alibaba’s
Tmall
and
Taobao
platforms,
the
Chinese
firm
would
“unlock
synergies
and
drive
AI
innovation.”
The
investment
bank
expects
Hong
Kong-listed
shares
of
Alibaba
to
rise
to
128
Hong
Kong
dollars
($17),
which
implies
an
84%
upside
potential.
The
bank
expects
the
U.S.
listed
stock
to
rise
to
$133
a
share,
85%
above
the
current
share
price.
HSBC
Jefferies
analyst
Joe
Dickerson
believes
HSBC
shares
can
re-rate
higher
from
current
low
valuations
of
0.9
times
tangible
book
value.
The
analyst
sees
HSBC
sustaining
15-16%
returns
on
tangible
equity
in
2024-2025,
with
significant
capital
returns
to
shareholders.
According
to
Dickerson,
the
pending
sale
of
HSBC’s
Canadian
business
also
paves
the
way
for
special
dividends.
Jefferies
estimates
HSBC’s
total
shareholder
payouts
will
reach
$54
billion
by
the
end
of
2025,
funded
through
earnings
power.
The
investment
bank
expects
shares
to
rise
57%
over
the
next
12
months.
ASML
Semiconductor
equipment
manufacturer
ASML
is
also
a
Jefferies
“top
pick”.
The
bank
sees
a
cyclical
recovery
underway
in
the
memory
and
chip
sector,
with
ASML’s
revenues
accelerating
by
25%
in
2025.
Jefferies
believes
concerns
about
U.S.
export
restrictions
on
China
sales
are
overblown.
The
investment
bank
believes
ASML’s
current
valuation
of
33
times
forward
earnings
is
too
low
since
it
forecasts
49%
earnings
growth
over
the
next
two
years.
DexCom
Shares
of
medical
device
maker
DexCom
are
expected
to
rise
by
33%
over
the
next
12
months,
according
to
Jefferies.
The
bank’s
analysts
cited
DexCom’s
expanding
total
market
potential
in
diabetes
care
as
part
of
their
reasoning
for
their
bullish
stance
on
the
stock,
dismissing
concerns
around
the
impact
of
the
growth
of
anti-obesity
drugs.
“The
diabetes
market
remains
large
and
underpenetrated.
The
denominator
is
so
big
(and
growing)
that
even
some
improvement
in
disease
progression
from
[the
anti-obesity
drugs]
therapy
is
unlikely
to
crimp
the
opportunity
ahead
for
[continuous
glucose
monitoring
devices],
it
could
even
be
a
tailwind,”
the
bank
said
in
a
note
to
clients.
—
CNBC’s
Michael
Bloom
contributed
reporting.