Nvidia shares are compelling heading into earnings
Bank of America named a slate of stocks this week that are poised for upside, even as the major averages trade near their highs. Those names include Nvidia , which is scheduled to report earnings on May 22 and has soared nearly 87% in 2024. CNBC Pro combed through Bank of America’s research to find stocks that are undervalued and compelling. The other buy-rated stocks are Raymond James Financial , S & P Global , Monster Beverage and Topgolf Callaway Brands. Raymond James Financial This stock has no shortage of underappreciated qualities, analyst Mark McLaughlin said, following the financial services company’s quarterly report in late April. The analyst said he’s bullish on each of Raymond James’ individual businesses including asset management, capital markets and brokerage services. “RJF operates a high-growth well-diversified business model building its platform around its wealth management segment,” he said. Further, Raymond James offers a steady stream of organic growth and a “cheap valuation,” McLaughlin said. Shares of the company are up 13% this year, and they have more room to run, the analyst said. Raymond James is also in a place to take advantage of the current high rate environment, he added. “We believe RJF is well-positioned to benefit from higher interest rates as well as a turnaround in markets including higher beta levels and less uncertainty given its diversified model,” McLaughlin wrote. Monster Beverage Shares of Monster Beverage are down 6% this year, but investors should buy the dip, according to analyst Peter Galbo. In early May, the energy drink manufacturer reported first-quarter earnings that came just short of consensus estimates, but that’s not stopping Galbo from recommending the stock. Data points indicate growth rates are on an upward trend, he said. The company also announced it would begin a tender offer to repurchase up to $3 billion of common stock , a move that suggests that management thinks shares are undervalued, Galbo noted. “In our view, MNST offers superior growth to competitors and should see accelerating topline and margin growth,” he added. Capital returns are also showing signs of stability, and Galbo said Monster has other levers to pull, including its pricing power. The firm is expecting Monster to increase prices in the months ahead. “In addition, MNST maintains a pristine balance sheet with strong [free cash flow] that we expect to funnel into share repurchases over the next several years,” he added. Topgolf Callaway Brands Analyst Alexander Perry is standing by the golfing company. Topgolf Callaway reported a mixed first-quarter report earlier this month, but Perry said the stock has room for upside. The analyst said a slew of “new initiatives should drive an acceleration in Topgolf same-venue sales” in the months ahead. Perry cited catalysts like increased summer marketing spend and improving walk-in comps. He said Topgolf is also using a new data platform to increase foot traffic with special deals and offers that will resonate with consumers. Meanwhile, Topgolf is just “starting to unlock synergy potential” between its various businesses, Perry added. “We rate MODG shares Buy as we believe shares are undervalued given an uptick in golf participation, increasing market share in golf balls, and strong unit growth at Topgolf,” he wrote. Shares of the company are up more than 5% this year. Nvidia “Maintain Buy, top pick on NVDA ahead of its FQ1 ’25 (Apr) eps due May-22. … In our view, valuation remains compelling, with NVDA stock currently trading around 29x CY25E [calendar year] PE on current consensus and lower on more bullish investor expectations, so towards lower-end of the 24x-48x historical next annual PE [price earnings] range.” Topgolf Callaway Brands “New initiatives should drive an acceleration in Topgolf same-venue sales. … Topgolf comps should accelerate in 2H on new initiatives. … MODG starting to unlock synergy potential. … We rate MODG shares Buy as we believe shares are undervalued given an uptick in golf participation, increasing market share in golf balls, and strong unit growth at Topgolf.” S & P Global “We rate SPGI with a Buy rating. The Street undervalues S & P’s attractive growth story that includes an improving credit supply cycle, M & A sales synergies (ramping in 2024), and more diversified sales mix post its IHS acquisition. We expect multiple expansion as credit supply inflects positive and the market rewards it for a steadier sales algorithm post IHS.” Monster Beverage “In our view, MNST offers superior growth to competitors and should see accelerating topline and margin growth. … Reiterate Buy rating, long term category growth rates remain positive and share buyback shows management believes stock is undervalued. … In addition, MNST maintains a pristine balance sheet with strong FCF that we expect to funnel into share repurchases over the next several years.” Raymond James Financial “Reiterate Buy; cheap valuation + overlooked qualities. … RJF operates a high-growth well diversified business model building its platform around its wealth management segment. … We believe RJF is well-positioned to benefit from higher interest rates as well as a turnaround in markets including higher beta levels and less uncertainty given its diversified model.”
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