Are you ready for earnings season? We are now heading into a critical period for investors as companies publish their second quarter earnings results and guidance updates. And with stocks at record levels, any disappointment in the data could send prices plummeting. But there are several stocks still primed to outperform. Here we turned to TipRanks’ Earnings Calendar to see which stocks reporting this week have a bullish outlook according to top analysts. Indeed, all three stocks covered below have a ‘Strong Buy’ Street consensus. That’s based on all the ratings received by the stock over the last three months. Let’s take a closer look now:
Levi Strauss & Co. (LEVI)
Jeans giant Levi is now gearing up for its earnings report on July 9. Investors are keeping a close eye on the event given that the company only just made its market debut in March. That means this is only the company’s second earnings report since it went public.
Luckily the signs are positive that the event will prove a success- especially as the Q1 earnings revealed strong broad-based growth. Indeed, the company even sailed into profit-making territory with earnings of $0.37 per share, up from a loss of $0.5 per share a year ago.
“We are BUY-rated on LEVI with a $26 PT and remain comfortable with our forecasts ahead of next week's 2Q report” cheers five-star Guggenheim analyst Robert Drbul. In a note aptly titled ‘Levi- 501 reasons to buy the stock’, the analyst set out his expectations for around 4% revenue growth in the quarter to $1.294 billion. That’s alongside 2Q/FY19 EPS estimates of $0.13/$1.07 in-line with consensus. “We believe upside potential to these forecasts is achievable this year, as Levi continues to engage in brand-building partnerships/collabs to drive brand heat” he contends.
And looking out past the coming earnings report, Drbul maintains his optimistic tone. “While Levi's already enjoys the highest brand awareness in Denim Bottoms, globally, we believe expansion in underdeveloped segments, including Women’s and Tops, DTC, and markets like China, provide a long runway for growth ahead.” Overall, 3 out of 4 best-performing analysts covering LEVI rate the stock a ‘Buy.’ Their $25.50 average analyst price target translates into 15% upside potential for shares.
KushCo Holdings Inc (KSHB)
Cannabis stock and vape specialist KushCo Holdings is also set to release its earnings report on July 11. And as we can see below, all five analysts rate KSHB a buy ahead of the print. That means the stock has received no hold or sell ratings in the last three months. Plus its $7.90 average analyst price target indicates the stock has significant room to grow with 60% upside potential from current levels.
Canaccord Genuity analyst Robert Burleson, for example, has a ‘Speculative Buy’ rating on the stock with a $7.50 price target. That’s in contrast to its current price of just $4.94.
Following a positive company management meeting, Burleson told investors: “Vape hardware demand continues unabated, evidenced by recent data from BDS Analytics showing vape’s increasing share of retail sales in [recreational use] markets, somewhat to the detriment of flower [or, dry cannabis] sales… As such, we believe KSHB’s revenue mix from vape hardware is likely to remain elevated.”
Similarly Roth Capital’s Scott Fortune sees shares surging to $8. According to Fortune, KSHB is leading the way when it comes to cannabis ancillary products and services- which puts KushCo in prime position to benefit from a rapidly growing legal cannabis industry. The best part is that the analyst sees a slew of catalysts ahead including securing large cannabis operators in key legal (CA) and new states.
He is also anticipating “deepening customer relationships, cross-selling opportunity as the one-stop-shop, cannabis-derivative growth, expansion into Canada, potential acquisition take out, and an upcoming uplisting.”
Delta Air Lines, Inc. (DAL)
US global airline Delta is also fast approaching its earnings results release on Thursday, July 11. Ahead of the print the mood is upbeat following an encouraging earnings guidance update from Delta on July 2. “Delta expects to produce a strong June quarter with top-line growth, margin expansion and over $1.5 billion of free cash flow” the company told investors.
For the quarter, Delta expects earnings per share of $2.25 to $2.35 and revenue growth of 8% to 8.5%, at the high-end of initial guidance provided in April. What’s more, DAL also returned ~$500 million to shareholders through dividends and share repurchases in the quarter. Stifel analyst Joseph DeNardi called the predicted numbers "strong across the board," noting that DAL is one of the biggest beneficiaries of the fact that the grounding of Boeing's (BA) MAX fleet is constraining industry growth. He has a Street-high price target of $90 on the stock (53% upside potential). Bear in mind that shares are already up 18% year-to-date.
The news also prompted Stephens’ Jack Atkins to write that: “DAL's IR update yesterday highlights a Domestic passenger airline market that is solidly outperforming the doom and gloom expectations that many had at the start of the year.” As a result Atkins resumed coverage of DAL with a Buy rating and $70 target price (up from $68 previously).
The analyst sums up his bullish investing thesis on the stock here: “With fare momentum from both the underlying market and its own revenue initiatives, costs firmly under control and a multi-year tailwind from the recently extended co-branded credit card agreement, we continue to believe DAL is very well positioned to drive shareholder value as it continues to find ways to elevate (and monetize) the customer experience."
In total, 8 out of 9 analysts polled rate the stock a 'Buy.' With an average analyst price target of $70, analysts see (on average) 19% upside potential for the months ahead.