As Wall Street prepares for another earnings season, analysts see some stocks better positioned than others for gains. The S&P 500 jumped a hair more than 7% in the first quarter of 2023, marking its second consecutive positive quarter. A rally in tech stocks helped fuel the broader market rally, even eclipsing a regional banking crisis caused by the failure of Silicon Valley and Signature banks. Just look at the Technology Select Sector SPDR Fund (XLK), which is up 20% so far this year, through Monday’s close. Meanwhile, the Financial Select Sector SPDR Fund (XLF) is down 6% so far in 2023. As investors keep one eye on the financial sector and the other on the continued rate hike campaign of the Federal Reserve, Q1 earnings reports will answer which companies are truly resilient. Against this backdrop, CNBC Pro used FactSet data to pick stocks that Wall Street analysts believe have the most upside potential ahead of another earnings season. The screen looked for names in the S&P 500 that met all of the following criteria: and six months Five or fewer earnings downgrades in the past three months The average price target has risen by at least 10% over the past three months Online reservations provider Booking Holdings has the largest estimated increase in earnings per share over the next six months, rising nearly 51%. Meanwhile, its average price target has risen more than 19% over the past three months. Shares have gained nearly 28% year-to-date after falling 16% in 2022. And more than half of analysts covering Booking Holdings still see it as a buy or strong buy, Refinitiv data shows. . BKNG YTD Mountain Shares of Booking Holdings Another stock expected to outperform during the earnings season is Paccar. Shares of the truckmaker have jumped more than 26% in the past 12 months (they haven’t fallen since 2018), and analysts polled by Refiniv estimate the shares will gain another 9% over the year next. Earnings per share estimates have risen 42% over the past six months. Truck maker Peterbilt and Kenworth has also seen its price target rise nearly 11% in the past three months. The only fly in the ointment might be that nearly two-thirds of analysts covering Paccar stock give it a holding rating, according to Refinitiv data. Customer relationship management software maker Salesforce also made the screen. Salesforce shares have soared about 45% in 2023 after falling 48% last year, and following activist moves by hedge funds, led by Third Point’s Dan Loeb, Elliott Investment Management, Starboard Value, Inclusive Capital and ValueAct Capital Partners. Salesforce’s earnings per share are expected to climb 24% over the next six months. CRM YTD mountain Stock Salesforce Software companies Ansys and Ceridian HCM Holdings also appeared on our screen. -CNBC’s Chris Hayes contributed to this report.
Analysts are bullish on these S&P 500 stocks ahead of earnings season
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