10 Stocks to Buy Before Their Earnings Reports

Published July 22, 2022 at 11:47 am EDT Updated September 7, 2026 at 11:34 am EDT

In this article, we discuss the 10 stocks to buy before their earnings reports.

With the inflation in the US at a 40-year high and the Federal Reserve trying to combat it with interest rate hikes, the probability of a recession occurring by the end of 2023 is gaining momentum with every passing day. Hence, investors are looking for companies that are fundamentally strong and can withstand the impact of a severe economic downturn in the long term. In the next quarterly results, analysts anticipate the companies in the S&P 500 Index to report an average increase in revenue of 10%, but the earnings are only expected to rise by 5.5% as inflation and other economic factors are expected to erode the bottom-line margins.

The S&P 500’s second-quarter earnings season has gotten off to a slower start than usual due to the lower-than-average number and size of revenue and earnings beats. As a consequence, since June 30, there hasn’t been any progress in the second quarter’s revenue and earnings growth rates. Till July 15, the total proportion of companies that had released their Q2 results stood at 7%. The actual EPS provided by these firms exceeded projections by 60%, lower than the 77% average of five years. Companies are collectively declaring earnings that are 2% over projections, which is less than the 8.8% five-year average. Popular companies such as Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc. (NASDAQ:AMZN), and The Procter & Gamble Company (NYSE:PG) are expected to announce their quarterly earnings reports in the following two weeks.

Photo by Alexandr Bormotin on Unsplash

Our Methodology

In this article, we will discuss 10 stocks that investors should buy before their earnings reports are published. These companies have reported strong quarterly revenue and EPS figures in the past, and we expect them to do the same in the coming quarter as well. We will discuss the catalysts that reflect why these companies are in a position to report strong growth and also go through the guidance outlook for the upcoming quarters. The companies discussed are expected to report their earnings in the next two weeks.

10 Stocks to Buy Before Their Earnings Reports

10. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 64

Earnings Announcement Date: July 26

The Coca-Cola Company (NYSE:KO) is a Georgia-based multinational beverage firm.

On July 20, Andrea Teixeira at JPMorgan gave The Coca-Cola Company an Overweight rating with a price target of $70 ahead of the company’s Q2 2022 results. Teixeira stated that it would be ideal for The Coca-Cola Company to maintain its status as a “defensive holding with upside and strong underlying momentum.”

The Coca-Cola Company surpassed the consensus EPS estimates for Q1 2022 by 10.44%. The company also recorded a 16% YoY growth in sales to $10.5 billion. For Q2 2022, The Coca-Cola Company is expected to post an EPS of $0.69, higher than the consensus estimates by $0.2.

The Coca-Cola Company was discussed in the Q4 2021 investor letter of ClearBridge Investments. Here’s what the firm said:

“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”

As of Q1 2022, 64 funds held a stake in The Coca-Cola Company.

9. First United Corporation (NASDAQ:FUNC)

Number of Hedge Fund Holders: 5

Earnings Announcement Date: July 26

First United Corporation (NASDAQ:FUNC) operates as a bank holding corporation.

Analysts expect First United Corporation to record an EPS of $0.88 for Q2 2022, reflecting a YoY increase of over 33%. Furthermore, the revenue has been predicted at $18.73 million, reflecting a 9.3% rise from the same period last year. Analysts remain bullish on First United Corporation stock due to the company’s strong fundamentals. The EPS estimates were revised upwards by 7.87% in the last 30 days.

First United Corporation’s payout ratio stands at 17% as of July 22, reflecting a sustainable level. If the company continues the dividend-paying trend, the payout ratio will rise to 22% by 2023.

EJF Capital was the leading hedge fund holder in First United Corporation’s during the first quarter of the year. At the end of Q1 2022, 5 funds held a cumulative stake worth over $17 million in First United Corporation.

8. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Earnings Announcement Date: July 26

Microsoft Corporation (NASDAQ:MSFT) is a Redmond, Washington-based diversified technology corporation.

In the last four quarters, Microsoft Corporation has consistently surpassed revenue and earnings estimates. Microsoft Corporation has announced that it will slow down the new hiring of employees in the cloud and security division during challenging economic times. Industry peers like Alphabet Inc. (NASDAQ:GOOGL), Apple Inc., and Meta Platforms, Inc. (NASDAQ:META) have already made similar announcements as corporations are taking a conservative approach due to inflation and a recession looming. In Q1 2022, Microsoft Corporation recorded a 31% YoY increase in revenue. Analysts expect Microsoft Corporation to record revenue of $51.1 billion in Q2 2022, higher than the consensus forecast of $50.9 billion.

Polen Capital shared its insights on Microsoft Corporation in its Q1 2022 investor letter. Here’s what the firm said:

“Microsoft’s business is firing on all cylinders and continue to enjoy an acceleration in their respective fundamentals because of the increase in digitization around the world. Nearly every company today is searching for ways to become more digital, and both Microsoft and Accenture are positioned to provide many of the solutions these companies seek. This inflection in fundamentals was not lost on the market, and each business’s stock performed exceptionally well in 2021. In fact, they represented two of the three top absolute performers for the Global Growth Portfolio last year. As a result, their respective stocks are currently more fully priced. As such, we lowered Microsoft from our largest position within the Portfolio. We maintain high conviction in Microsoft and plan to own it for many years, but recognize the increase in its prices.”

Of the 912 hedge funds in Insider Monkey’s database, 259 funds held a stake in Microsoft Corporation as of Q1 2022.

7. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Holders: 160

Earnings Announcement Date: July 26

Alphabet Inc. is a Mountain View, California-based diversified multinational technology conglomerate.

Since the start of the year, Alphabet Inc. stock has lost 24% of its value. Alphabet Inc. has undergone a 20-for-1 stock split to make its shares affordable to retail investors and give life to dwindling share price performance. Although Alphabet Inc. can be expected to decelerate in top-line growth due to foreign exchange headwinds and tougher YoY comparatives, the company has taken actions to safeguard its margin and keep it stable in the upcoming quarterly results. In Q2 2022, Alphabet Inc. is expected to report an EPS of $1.30 and revenue of $58.1 billion, reflecting an increase of 14% from the same period last year.

Diamond Hill Capital discussed its stance on Alphabet Inc. in its Q1 2022 investor letter. Here’s what the investment management firm said:

“The market environment in Q1 provided a meaningful opportunity for us to initiate positions in high-quality names that sold off indiscriminately during the quarter and were trading at prices we haven’t seen in quite some time. Alphabet (NASDAQ:GOOG) is an example. Alphabet, which owns Google and other products, sold off as the expected rise in interest rates by the Federal Reserve drove what we viewed as excessive investor pessimism. We believe these headwinds are temporary and expect Google’s search engine advertising, YouTube advertising and other initiatives to continue driving revenue growth over the long term.”

Overall, 160 hedge funds held a stake in Alphabet Inc. as of Q1 2022.

6. QUALCOMM Incorporated (NASDAQ:QCOM)

Number of Hedge Fund Holders: 73

Earnings Announcement Date: July 27

QUALCOMM Incorporated (NASDAQ:QCOM) is a San Diego, California-based semiconductor company.

Ross Seymore at Deutsche Bank sees fundamental strength in the majority of the semiconductor sector during Q2 and Q3 2022 earnings seasons. The analyst has given QUALCOMM Incorporated stock a Buy rating with a target price of $170 in a note issued to investors on July 20. It must be noted that QUALCOMM Incorporated is an industry leader in the growing 5G technology and will have an active role in the adoption of 5G handsets. Furthermore, QUALCOMM Incorporated offers diversity as it sells chips to the cloud computing and automobile industry. The company now has a robust licensing business after settling and winning numerous legal battles.

Here’s what ClearBridge Investments said about QUALCOMM Incorporated in its Q4 2021 investor letter:

“Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker Qualcomm, which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).”

Beech Hill Partners is the leading hedge fund investor in QUALCOMM Incorporated as of Q1 2022.

In addition to QUALCOMM Incorporated, analysts are bullish on popular stocks such as Apple Inc., Amazon.com, Inc., and The Procter & Gamble Company ahead of their quarterly results.

5. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 131

Earnings Announcement Date: July 28

Apple Inc. is a Cupertino, California-based tech giant that will report its Q3 FY22 results on July 28.

T. Michael Walkley at Canaccord thinks that the company will report solid Q3 FY22 results and provide constructive commentary for Q4 FY22. The analyst thinks that the 5G upgrade cycle will be beneficial for Apple Inc. for many years to come. Furthermore, other hardware divisions are also expected to grow in double digits as there is a continuous shift towards high-margin services. Walkley believes that Apple Inc.’s current share price is attractive for a long-term investment horizon. The analyst gave these comments in a research note issued to investors on July 20. He gave Apple Inc. stock a Buy rating and a target price of $200. The target price reflects a potential upside of over 30% from the closing price as of July 20.

Weitz Investment Management discussed its outlook on Apple Inc. in its Q1 2022 investor letter. Here’s what it said:

“Changes to Apple’s (NASDAQ:AAPL) mobile operating system have temporarily impacted growth of Meta’s advertising business just as the company’s investments in Instagram’s “Reels” feature ramp ahead of full monetization. (Shareholders can read research analyst Jon Baker’s in-depth discussion of current events impacting Meta and reasons why we’re optimistic about the company in our recent Analyst Corner feature.) CoreCard (formerly Intelligent Systems) struggled early in the fiscal year to hire and train staff to handle growth from new and existing clients. Lately, Apple-related headlines also took a bite out of CoreCard shares, as reports suggest Apple is exploring a transition of its credit card and other financial services to internally built solutions. Such a move would create revenue headwinds for its partners, which CoreCard is widely believed to be. We are monitoring these developments and stress-testing our model accordingly.”

4. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 271

Earnings Announcement Date: July 28

Amazon.com, Inc. is a Seattle, Washington-based technology giant primarily involved in cloud computing and e-commerce.

Brent Thill at Jefferies thinks that Amazon.com, Inc. stock price is set to outperform the market and industry peers in the second half of the year due to acceleration in revenue growth and improvement in the bottom line. However, due to tougher comparatives from the same period last year and rising inflation, the company’s net income for Q2 2022 is facing an overhang. Any possible downward revision in Q3 operating income guidance would be a clearing event and the last guide-down. The analyst has given Amazon.com, Inc. stock a target price of $150 with a Buy rating due to solid business fundamentals.

Amazon.com, Inc. was mentioned in the Q1 2022 investor letter of Diamond Hill Capital. Here’s what the firm said about the company:

“Amazon, one of the leading providers of public cloud services and online retailing, is a rapidly growing business that has been investing heavily in infrastructure and content to improve its customer experience. These investments have obscured the magnitude of sustainable free cash flow as well as the attractive valuation of the business relative to peers.”

Amazon.com, Inc. was held by 271 hedge funds at the end of Q1 2022.

3. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 83

Earnings Announcement Date: July 29

Exxon Mobil Corporation (NYSE:XOM) is an Irving, Texas-based integrated energy company.

In an investor note released on July 19, Ryan Todd at Piper Sandler upgraded Exxon Mobil Corporation stock from a Neutral to an Overweight rating and increased the target price from $102 to $109. The analyst thinks that Exxon Mobil Corporation looks attractive ahead of the Q2 2022 results. Although higher exploration and production (E&P) costs could be negatively interpreted by investors, the improvement in refining margin is helping analysts remain bullish on Exxon Mobil Corporation. Todd also anticipates a show of resilience from the company’s chemicals division.

Exxon Mobil Corporation was mentioned in the Q3 2021 investor letter of Goehring & Rozencwajg Associates. Here’s what the firm said about the company:

“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.

What should Chevron expect?

It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects.

According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”

GQG Partners increased its stake in Exxon Mobil Corporation by 60% at the end of Q1 2022.

2. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 72

Earnings Announcement Date: July 29

The Procter & Gamble Company is a Cincinnati, Ohio-based household goods company.

CEO Jon Moeller thinks that during uncertain times, The Procter & Gamble Company needs to make investors believe that it can continue to deliver solid value. The Procter & Gamble Company will report its Q4 FY22 results on July 29 and is expected to remain conservative with FY23 guidance. Analysts have already accommodated this into their financial models, bringing The Procter & Gamble Company in a position to report better-than-expected guidance for FY23. In the last four quarters, The Procter & Gamble Company has consistently surpassed the EPS estimates. The company’s Q3 FY22 EPS outperformed the consensus forecast by 2.88%.

Of the 912 hedge funds in Insider Monkey’s database, 72 funds held a stake in The Procter & Gamble Company as of Q1 2022, up from 67 in the previous quarter.

1. Gilead Sciences, Inc. (NASDAQ:GILD)

Number of Hedge Fund Holders: 68

Earnings Announcement Date: August 2

Gilead Sciences, Inc. (NASDAQ:GILD) is a Foster City, California-based biotech company that is focused on researching and developing antiviral drugs.

Gilead Sciences, Inc. is in the middle of a transformation from a pure play in the virology sector to a more diversified portfolio. The company needs to work on the optics of slowing growth. This can be either done by coming up with a new explosive drug or through a shrewd acquisition at a time when the valuations across the pharma sector are attractive. Once Gilead Sciences, Inc. manages to sort this overhang, there will be no looking back. The strategy of the oncology segment is positive, and there is a potential upside in the long term. In the last 90 days, there have been five upward revisions in Gilead Sciences, Inc.’s EPS estimates.

Here’s what ClearBridge Investments said about Gilead Sciences, Inc. in its Q4 2021 investor letter:

“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences’ remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”

As of Q1 2022, 68 hedge funds held a stake in Gilead Sciences, Inc., with a cumulative stake of $4 billion.

You can also take a peek at 10 Industrial Stocks That Are ‘Must Buys’ According to Caxton Associates and 10 Small-Cap ETFs to Buy Now.

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