In this article, we discuss the 5 stocks to buy before their earnings reports. If you want to read about some more stocks expected to gain following their quarterly results, go directly to 10 Stocks to Buy Before Their Earnings Reports.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 131
Earnings Announcement Date: July 28
Apple Inc. (NASDAQ:AAPL) 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. (NASDAQ:AAPL) 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 (NASDAQ:AAPL) 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. (NASDAQ:AAPL) 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. (NASDAQ:AAPL) 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. (NASDAQ:AMZN) is a Seattle, Washington-based technology giant primarily involved in cloud computing and e-commerce.
Brent Thill at Jefferies thinks that Amazon.com, Inc. (NASDAQ:AMZN) 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. (NASDAQ:AMZN) stock a target price of $150 with a Buy rating due to solid business fundamentals.
Amazon.com, Inc. (NASDAQ:AMZN) 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. (NASDAQ:AMZN) 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 (NYSE:XOM) stock from a Neutral to an Overweight rating and increased the target price from $102 to $109. The analyst thinks that Exxon Mobil Corporation (NYSE:XOM) 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 (NYSE:XOM). Todd also anticipates a show of resilience from the company’s chemicals division.
Exxon Mobil Corporation (NYSE:XOM) 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 (NYSE:XOM) 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 (NYSE:PG) is a Cincinnati, Ohio-based household goods company.
CEO Jon Moeller thinks that during uncertain times, The Procter & Gamble Company (NYSE:PG) needs to make investors believe that it can continue to deliver solid value. The Procter & Gamble Company (NYSE:PG) 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 (NYSE:PG) in a position to report better-than-expected guidance for FY23. In the last four quarters, The Procter & Gamble Company (NYSE:PG) 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 (NYSE:PG) 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. (NASDAQ:GILD) 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. (NASDAQ:GILD) 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 (NASDAQ:GILD) EPS estimates.
Here’s what ClearBridge Investments said about Gilead Sciences, Inc. (NASDAQ:GILD) 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. (NASDAQ:GILD), 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.
