Bank of America suggests there are still many attractive stocks to consider ahead of earnings season. Among their top picks are companies like Nvidia, along with others such as JD.com, Block, and Toronto-Dominion Bank.
Starting with Toronto-Dominion Bank, analyst Ebrahim Poonawala has recently upgraded the stock from neutral to buy. The bank has faced challenges, particularly in managing its anti-money-laundering unit. However, according to Poonawala, the bank is making significant progress following a series of fines imposed by the U.S. Department of Justice. With new CEO Raymond Chun at the helm since February 1st, there is renewed confidence in the bank’s path towards increased profitability. Poonawala noted that the stock has risen 8% this year and sees it as undervalued given the potential for better execution. Toronto-Dominion is expected to release its earnings by the end of February.
Moving on to JD.com, analyst Joyce Ju highlights the exceptional performance of this China-based e-commerce giant. The company’s shares have surged nearly 75% over the last year, and the growth trajectory seems promising. Ju estimates a 10.5% increase in direct sales year-on-year, mainly driven by the electronics, home appliances, and general merchandise sectors. Additionally, logistics and other service revenues are poised for significant growth. JD’s direct sales model and robust third-party marketplace are notable strengths, and Ju expects the company to outpace industry growth with its diversified product offerings and evolving business models. JD.com is set to announce its earnings in early March.
Block, a fintech payment company, is another standout pick according to analyst Jason Kupferberg. He is particularly optimistic about Block’s dual-sided ecosystem, involving both its Cash App and Square services. Despite impressive growth and profitability, Block’s potential seems underappreciated by investors, Kupferberg argues. Even though the company’s upcoming earnings report on February 20 might not be a game-changer given its 25% stock rise over the past year, there’s still a lot of optimism for further potential.
Finally, Nvidia remains a top pick, with expectations of positive reassurances about its outlook during the upcoming Q4 earnings call scheduled for February 26. As the company navigates product transitions and China restrictions, Nvidia is expected to provide modest sales guidance and demonstrate resilience.
These selections reflect a blend of tech, finance, and e-commerce, showcasing opportunities where these businesses could surprise investors with robust performance and strategic growth.
