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Earnings: 3 Buy-Rated Stocks to Watch Tuesday

Earnings season isn’t over yet. While the majority of S&P 500 companies have already reported, Wall Street is still eagerly awaiting the results from a select few names. With the results generally being better-than-expected, investors can’t wait to see what is in store for the companies lining up to report.  

Bearing this in mind, we wanted to dig a little deeper to get the lowdown on a few stocks that have yet to release their earnings reports. To get this done, we turned to TipRanks. The platform’s Stock Screener tool enabled us to pinpoint 3 must-watch tickers ahead of their upcoming releases today, all of which are currently buy-rated.  

Let’s get started.  

Advance Auto Parts, Inc. (AAP) 

Advance Auto Parts has captured the Street’s attention thanks to its 19% rise over the last three months. That being said, one top analyst reminds investors to keep their expectations in check ahead of its earnings release. 

While his bullish thesis remains very much intact, Wedbush’s Seth Basham points out that he expects results to fall in-line. Even though the company has taken a step in the right direction with its sales initiatives, it might not have boosted results as much as the car parts company had hoped. This lends itself to his forecasts of flat gross margins and somewhat sluggish comps of about 1%+ (vs consensus +1.2%).  

Nonetheless, Basham is still “constructive” on AAP’s third quarter numbers. “Pricing actions driven mostly by tariffs should provide a sequentially stronger boost to AAP comps, and could also benefit gross margins, helping (along with supply chain cost leverage, which is key to the long-term story) to offset pressures from LIFO and unicap accounting,” he noted.  

Basham adds that even if gross margins fall flat, it can be taken as a positive signal that the headwinds AAP faced in Q2 were only temporary. As a result, the four-star analyst kept his Buy recommendation and $180 price target. This target puts the potential twelve-month gain at 7%. (To watch Basham’s track record, click here

Looking at the consensus breakdown, the rest of the Street’s take on AAP is more mixed. 9 Buy ratings, 4 Holds and 1 Sell give it a ‘Moderate Buy’ analyst consensus. Its $169 average price target indicates downside potential of 0.2%. (See Advance Auto Parts stock analysis on TipRanks)  

Cronos Group Inc. (CRON) 

Given the fact that it has been a tough quarter for the cannabis sector, all eyes are on Cronos Group before it announces earnings results.  

Unlike other key players in the space, CRON has been impressing investors with its prudent spending. Many cultivators in the industry have struggled as a result of funding, but this doesn’t appear to be the case for CRON. The company is set to finance its cultivation JV, Cronos GrowCo, with a $100 million revolving term loan facility. Not to mention the cannabis name also saw its Australian operation close an AUD$20 million public offering. 

Adding to the excitement, Q3 represents the first time that investors will get to see how its Lord Jones brand is performing. Cronos acquired the CBD brand for $300 million back in September.  

Based on all the above, CIBC analyst John Zamparo still sees the cannabis stock as a buying proposition, with his estimates putting quarterly revenue at CA$13.3 million. While this is less than the CA$13.8 million consensus estimate, Zamparo’s prediction still brings the gain from Q2 to 30%-plus. The analyst also highlights Lord Jones as key area to watch, telling clients Lord Jones gross margins could come in 10 to 15 percentage points higher than existing cannabis operations. 

To this end, the analyst kept a $15 price target along with his rating. This implies shares could soar 87% over the next twelve months. (To watch Zamparo’s track record, click here

Similarly, other Wall Street analysts like what they’re seeing. With 5 Buys and 1 Hold received in the last three months, CRON earns a ‘Strong Buy’ Street consensus. Additionally, its $14 average price target suggests 73% upside potential. (See Cronos Group stock analysis on TipRanks

Canadian Solar Inc. (CSIQ) 

Canadian Solar is one of the leading providers of solar PV modules and other solar energy solutions. With tariffs presenting a potential threat to the company, Wall Street is waiting to see how CSIQ will fare in its third quarter. 

The Trump administration announced that it would be imposing tariffs on bifacial solar panels. Even though the decision reversed an earlier ruling in June, a complete reversal was widely considered to be unexpected. This posed a cause for concern as CSIQ was recently awarded a 1.8 GW part-bifacial supply deal from EDF Renewables.  

While it is concerning, Cascend Securities analyst Eric Ross believes that now is not the time to panic. “Bifacials are a no-brainer for low-cost additional capacity. This is a speedbump but not a tragic issue that will stop the massive ramp we’re seeing in solar likely to drive forward over the next several years,” he explained. 

The analyst cites CSIQ as well-positioned within the markets in the U.S., Brazil, Mexico, Japan and China thanks to its shifting of capacity upstream to cells and modules, which are in undersupply, and away from products facing oversupply like ingots and wafers. With Ross betting on earnings jumping higher in the second half of 2019, it’s no wonder he maintained his Buy rating. He is also confident in CSIQ’s ability to surge 48% over the next twelve months according to the $25 price target. (To watch Ross’ track record, click here

Turning to the rest of the Street, 2 Buys and 1 Hold issued in the last three months add up to a ‘Moderate Buy’ consensus. The upside potential lands at 68% based on the $28 average price target, significantly higher than Ross’ forecast. (See Canadian Solar stock analysis on TipRanks