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As Wall Street gears up for another earnings season, analysts see some stocks better positioned than others for gains. The S & P 500 jumped a hair more than 7% in the first quarter of 2023, marking its second positive quarter in a row. A tech-stock rally helped fuel the broad market’s rise, even overshadowing a regional banking crisis caused by the failure of Silicon Valley and Signature banks. Just look at the Technology Select Sector SPDR Fund (XLK), which is up 20% so far this year, through Monday’s close. Meanwhile, the Financial Select Sector SPDR Fund (XLF) has declined 6% so far in 2023. As investors keep one eye out on the financial sector and the other on the Federal Reserve’s continued rate-hiking campaign, first-quarter earnings reports will answer which companies are truly resilient. Against this backdrop, CNBC Pro used FactSet data to screen for stocks that Wall Street analysts think have the largest potential upside heading into a new earnings season. The screen searched for names in the S & P 500 that met all of the following criteria: At least five upward revisions of earnings per share estimates in the past three months Forward per share earnings estimates changes of at least 10% for the next three- and six months Five or less downward earnings revisions in the past three months Average price target increased at least 10% in the past three months Online reservations provider Booking Holdings has the highest estimated increase for earnings per share over the next six months, reaching almost 51%. Meanwhile, its average price target is up more than 19% during the past three months. Shares have gained nearly 28% year to date after dropping 16% in 2022. And more than half of analysts covering Booking Holdings still rate it a strong buy or buy, according to Refinitiv data. BKNG YTD mountain Shares of Booking Holdings Another stock expected to outperform during earnings season is Paccar . The truck manufacturer’s shares have surged more than 26% over the past 12 months (they haven’t fallen since 2018), and analysts polled by Refiniv estimate the shares will gain another 9% over the next year. Per-share earnings estimates have increased 42% over the past six months. The Peterbilt and Kenworth truck maker has also seen its price target rise nearly 11% over the last three months. The only fly in the ointment might be that almost two-thirds of analysts covering Paccar the stock give it a hold rating, according to Refinitiv data. Customer relations management software maker Salesforce also made the screen. Salesforce’s stock has soared about 45% in 2023 after tumbling 48% last year, and in the wake of activist moves from hedge funds , led by Dan Loeb at Third Point, Elliott Investment Management, Starboard Value, Inclusive Capital, and ValueAct Capital Partners. Salesforce’s earnings per share are estimated to climb by 24% over the next six months. CRM YTD mountain Salesforce stock Software companies Ansys and Ceridian HCM Holdings also popped up on our screen. —CNBC’s Chris Hayes contributed to this report.
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