Stocks with upside Bank of America says.
Analysts at Bank of America say there’s a slew of buy-rated stocks well positioned heading into earnings season. CNBC Pro combed through the firm’s research to find companies the firm likes as quarterly reports begin. They include: Warner Bros Discovery, Birkenstock , Spotify and United Airlines. United Following on the heels of Delta’s robust earnings report last week, analyst Andrew Didora is feeling bullish on shares of United. “We expect UAL to report strong 4Q24 results and guide 1Q25 ahead of consensus when the company reports earnings after the close on January 21,” he wrote. The firm raised its price target on the stock to $120 per share from $100 and says it sees robust revenue growth continuing. In addition, travel demand remains strong despite the macro uncertainty, according to Didora. “The airline is the biggest beneficiary of the strong premium, corporate, and transatlantic growth mentioned in DAL’s earnings report last week,” he wrote. United was also added to Bank of America’s prestigious US1 top ideas list. Shares are up 183% over the last year. Warner Bros Discovery Buy the dip in shares of the media and entertainment company, analyst Jessica Reif Ehrlich said. The stock is down 6.3% over the last year, but the firm says the buying opportunity is just too compelling to ignore. “WBD’s 4Q earnings should reflect a continuation of the various headwinds in the business,” she wrote acknowledging the challenges the industry faces. Still, the firm says the positive catalysts outweigh the negative. They include “easing studio comparisons, potential recovery in advertising, further growth in DTC [direct to consumer] and potential profit inflection.” “We continue to believe WBD has a compelling assortment of assets,” she added. The company is scheduled to report earnings later this quarter. Birkenstock The shoe company is firing on all cylinders ahead of earnings in late February, analyst Lorraine Hutchinson wrote following a recent meeting with company management. The firm says it sees several tailwinds in the months ahead including pricing power, product diversification and international growth. “We view Asia as a largely untapped opportunity,” she noted. Further, the company recently reiterated revenue guidance of 15% to 17% growth in fiscal year 2025, which Bank of America said is eminently “achievable.” Meanwhile, Birkenstock shares are up 20% over the last 12 months with plenty more room to run, Hutchinson said. “We retain our Buy rating and view BIRK as a brand that will continue to take share globally,” she went on to say. Spotify “We reiterate our Buy rating and $515 PO. We believe SPOT is at an inflection point in profitability and FCF driven by: 1) deeper penetration in existing markets, 2) recent/future price increases, 3) new pricing tiers, 4) an improvement in advertising driven by digital initiatives and 5) new businesses such as audiobook.” Birkenstock “BIRK reiterated its FY25 guidance of 15-17% revenue growth. We view this as achievable given current brand momentum. We retain our Buy rating and view BIRK as a brand that will continue to take share globally. … .We view Asia as a largely untapped opportunity,” United Airlines “We expect UAL to report strong 4Q24 results and guide 1Q25 ahead of consensus when the company reports earnings after the close on January 21. … .The airline is the biggest beneficiary of the strong premium, corporate, and transatlantic growth mentioned in DAL’s earnings report last week…” Warner Bros Discovery “WBD’s 4Q earnings should reflect a continuation of the various headwinds in the business. … .We continue to believe WBD has a compelling assortment of assets. Upcoming catalysts include: 1) easing Studio comparisons, 2) potential recovery in advertising, 3) further growth in DTC and 4) potential profit inflection.”
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