Goldman’s top trades for this upcoming earnings season
The first full week of earnings kicks off Monday, and several stocks stand to move higher on the strength of their quarterly results, according to Goldman Sachs. To be exact, 35 S & P 500 companies and six in the Dow Jones Industrial Average are set to report next week, including two of the largest banks in the country, JPMorgan and Citigroup , both of which report before the market opens on Tuesday. Other standard bearers, like PepsiCo and Netflix , are scheduled to release their latest financials on Thursday. “We expect investors to reward fundamental beats this quarter as positioning appears neither crowded nor fearful,” Goldman analysts led by John Marshall wrote in a report on Thursday. The options market is anticipating average earnings-day moves of plus or minus 4.7%, the lowest in two years, and far below the 7.1% that was priced in last quarter, suggesting investors are “much less fearful” in July than they were in April, the Goldman analysts said. “We expect a return to elevated single stock earnings-day volatility driven by thematic trades (AI, Tariffs, policy) this quarter,” Marshall said. Heading into second-quarter earnings, Goldman analysts screened for 25 of the most “out-of-consensus” stock opportunities and found 19 opportunities where upward earnings revisions might lead individual stocks to outperform. Below are some of the names that floated to the top of the Goldman screen. Oil and natural gas company Permian Resources could see gains ahead. The stock has already soared more than 28% in the past three months, through Friday, outpacing the S & P 500 gain of nearly 17% in the same period. PR 3M mountain Permian Resources over three months. Goldman energy analyst Neil Mehta rates Permian a buy and sees roughly 13% upside ahead, believing that it can outperform its peers due to “continued efforts to reduce well costs, optimize the cost structure of the business, Midland headquarters and increased scale through small to larger scale M & A.” Permian Resources is scheduled to release earnings August 6, Goldman said. Financial services provider State Street Corp., which has also outperformed the market in the past three months by climbing about 38%, may continue to rally. Asset managers and capital markets analyst Alexander Blostein, who rates State Street a buy, calls its risk-reward profile the “most attractive” among trust banks in his coverage. STT 3M mountain STT, 3-month State Street is expected to report second-quarter results Tuesday before the market opens, and Blostein believes analysts will raise their estimates afterward, spurred by “stronger fees, stable [net interest income]/deposit outlooks and continued focus on expenses.” GE HealthCare is additionally expected to exceed earnings expectations this next season due to stability in end markets, Goldman said. Medical technology analyst David Roman rates GE HealthCare a buy and believes its 2% guidance for 2Q and 3Q growth underestimates a strong U.S. imaging market, the pace of recovery in China and the launch of its radioactive diagnostic drug, Flyrcardo . GEHC 3M mountain GE HealthCare over the past three months. Shares have risen more than 19% over the past three months through Friday. The $35 billion, Chicago-based medical equipment maker is expected to release second-quarter financials before the market’s opening bell on July 30.
<
