Here are Jefferies’ favorite value stock ideas for the next year

Published Fri, Sep 29 20174:39 PM EDT

Jefferies' research analsyts shared their top value-oriented stock ideas in a note to clients Thursday. "The S & P 500 sits near multi-year valuation highs, and though it's the most expensive stocks that have driven much of that expansion, there are actually still plenty of 'cheap' stocks," the firm's analysts wrote. "We started with Buy-rated stocks which are cheaper than the S & P and looked at those with flat or up consensus revisions over each of the last two earnings periods." The analysts said the stocks on its value recommended list are on average cheaper than the market by 3.5 points in comparative price-to-earnings multiples. Here are four buy-rated companies recommended by Jefferies, along with the firm's current price targets. 1) Celgene (CELG) Jefferies analyst Mike Yee has a $160 price target for Celgene shares, which is 12 percent higher than Thursday's closing price. Celgene "remains one of the best 'growth' stories, providing an attractive opportunity to own a premier biotech growth name with a large early-stage pipeline. Over the next few months, and into 2018 [the firm] believes that shares will grind higher on the back of three major Ph.III datasets." 2) Delphi (DLPH) Jefferies analyst David Kelley has a $118 price target for Delphi shares, which is 21 percent higher Thursday's close. Delphi is "best positioned to benefit from secular industry shift to active safety and electrification … [the firm] believes Powertrain benefits from the incremental shift to electrification and estimates 5% annual organic growth to 2020 given the expected rising ICE [internal combustion engine] and power electronics content." 3) Steel Dynamics (STLD) Jefferies analyst Seth Rosenfeld has a $43 price target for Steel Dynamics shares, which is 24 percent higher than Thursday's close. Steel Dynamics is "a high-quality play on the gradually tightening domestic steel market. In the near-term, STLD should benefit from improving margins as scrap input costs begin to retrace heading into Q4 after a period of abnormal strength, which weighed on profitability in recent months." 4) Broadcom (AVGO) Jefferies analyst Mark Lipacis has a $286 price target for Broadcom shares, which is 18 percent higher than Thursday's close. "The company has been on a beat & raise streak for the past two years, fueled by RF [radio frequency] filter content gains in smartphones and acquisitions diversifying its portfolio of semiconductor franchises. Its technology leadership and scale have translated to margin tailwinds and impressive FCF growth."

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Jefferies' research analsyts shared their top value-oriented stock ideas in a note to clients Thursday.

"The S&P 500 sits near multi-year valuation highs, and though it's the most expensive stocks that have driven much of that expansion, there are actually still plenty of 'cheap' stocks," the firm's analysts wrote. "We started with Buy-rated stocks which are cheaper than the S&P and looked at those with flat or up consensus revisions over each of the last two earnings periods."

The analysts said the stocks on its value recommended list are on average cheaper than the market by 3.5 points in comparative price-to-earnings multiples.

Here are four buy-rated companies recommended by Jefferies, along with the firm's current price targets.