Buyers are watching Nvidia because the chip big prepares to situation earnings, however it’s not the one title value shopping for forward of outcomes, Financial institution of America says. The agency mentioned there’s nonetheless a slew of prime corporations which have but to ship quarterly experiences. CNBC Professional combed by means of Financial institution of America analysis to seek out enticing shares heading into earnings. The agency charges all the names under as purchase. They embrace Arista Networks, Penn Leisure , Nvidia , International Funds and Sweetgreen. International Funds Analyst Jason Kupferberg is doubling down on shares of the fee processing firm heading into earnings on Feb. 14 . The inventory stays undervalued and underappreciated, however Kupferberg mentioned he sees a singular shopping for alternative for affected person traders. International Funds has a “competitive differentiation” with a “sizeable portfolio of owned software assets in select verticals,” in response to the agency. In the meantime, Kupferberg stays bullish on administration adjustments introduced in 2023, noting a “conservative approach to earnings, which we believe would be welcomed by [the] Street.” The corporate additionally has an upcoming analyst day that ought to function a optimistic catalyst for the inventory, he added. With shares up 7% this 12 months, Kupferberg mentioned he is standing by the inventory. “GPN was a top pick in our Year Ahead ’24 report given its growth profile, competitive position, and attractive valuation,” he added. Arista Networks Even in a “weak environment,” Arista is a poised to be a standout, in response to analyst Tal Liani. The cloud-networking firm entered the 12 months with some uncertainty, however the outlook has improved following robust capex commentary from the likes of Microsoft and Amazon, he mentioned. In truth, Arista could be the appropriate inventory on the proper time with consensus estimates seemingly too low, Liani mentioned. “Arista is the only Buy-rated stock in our Networking universe,” he mentioned, attributable to its cloud and synthetic intelligence publicity. Liani additionally raised his value goal to $305 per share from $265. “We remain positive on management’s ability to execute, the company’s technological differentiation, product positioning, and its TAM [total addressable market] growing to $47bn by 2025,” he mentioned. Arista shares are up about 20% this 12 months, and the corporate is scheduled to report quarterly earnings on Feb. 12 . Penn Leisure Purchase the dip in shares of Penn, analyst Shaun Kelley mentioned not too long ago. The agency mentioned expectations stay muted for shares of the playing firm and that is not essentially a foul factor, he wrote. Kelley stays bullish on Penn’s sportsbook cope with ESPN, which is named ESPN Wager . “If executed well, we still think integrations between ESPN’s media app and ESPN Bet could drive sustainable high-single-digit market share,” he mentioned. Penn can be present process a sequence of administration adjustments in its interactive division, which Kelley sees as a long-term optimistic for shares. “The next catalysts for PENN include new interactive leadership which could be announced in the next few weeks, and Q4 earnings on February 15 ,” he wrote. Shares of the corporate are down 10% this 12 months, however Kelley urged traders to stay calm. “We are Buy rated on PENN given stable regional gaming trends and upside opportunity from ESPN Bet,” Kelley wrote. Sweetgreen “Sweetgreen is a digitally native, high growth fast casual concept with a distinct urban core market. Based on our saturation analysis, we see potential for SG to achieve its 1,000 LT store growth target. SG has high unit-level returns (40% in Yr-2) and store productivity (over $1,000/sq ft). We see upside to unit economics as SG continues to leverage investments in labor optimization technology (including automation).” Nvidia “AI demand in infancy, becoming essential to operations. … Expect NVDA to maintain dominance in AI inference also. … Enterprise genAI adoption has yet to kick off and become more material in CY25, with NVDA benefitting from its widespread availability on public clouds & unique partnerships with NOW, SAP, VMWare, Dell, HPE & others. … NVDA is one the rare large-cap tech stocks trading at 31x/25x CY24/25E PE, below its 45% CY23-25E EPS CAGR.” Penn Leisure “After the close, Penn Ent. announced a leadership change in its Interactive division. … While disappointing at face, turnarounds are never a straight line and we think investor expectations for PENN & ESPN Bet remain low. The next catalysts for PENN include new interactive leadership which could be announced in the next few weeks, and Q4 earnings on February 15. … We are Buy rated on PENN given stable regional gaming trends and upside opportunity from ESPN Bet.” Arista Networks “Peer results signal a weak environment … Arista is the only Buy-rated stock in our Networking universe,. … Street expectations are low, with comps easing in 2H24. … We remain positive on management’s ability to execute, the company’s technological differentiation, product positioning, and its TAM [total addressable management] growing to $47bn by 2025.” International Funds “We believe that GPN’s technology-led offerings & distribution, sizeable portfolio of owned software assets in select verticals, & a high concentration of more lucrative SMB volume represents a source of competitive differentiation. … GPN was a top pick in our Year Ahead ’24 report given its growth profile, competitive position, and attractive valuation of 11.4x ’24 P/E. … For initial ’24 guide, we expect new CEO to take a conservative approach, which we believe would be welcomed by Street.”
