Wall Street analysts are doubling down on these stocks after earnings

Published Sat, Nov 6 20218:58 AM EDT

Earning season is winding down and there are some companies in particular that are really standing out, according to Wall Street analysts. These stocks had such impressive earnings, analysts say, that they should be bought now. Of the 445 companies in the S & P 500 that have reported earnings to date for the third quarter, 81% reported above analyst expectations, according to Refinitiv. CNBC Pro combed through the top Wall Street research to find the top stocks with more upside following earnings. They include: Tractor Supply, Microsoft, Bank of America , ON Semiconductor, Alphabet and Workiva. Microsoft "It just keeps getting better," William Blair analyst Jason Ader said after the company's monster earnings report last week. Led by the strength of the company's cloud computing service, Azure, Microsoft continues to gain share much to the delight of investors, according to the firm. "Microsoft kicked off the fiscal year in high fashion, beating on the top and bottom lines with a blow-out revenue guide that was $1.65 billion above second-quarter consensus," Ader wrote in a follow up note to clients. "Azure (strong consumption),LinkedIn (hiring and advertising strength), Microsoft 365, and better-than-expected Windows revenue helped drive the beat," he went on to say. Ader noted that Cloud revenue now accounts for 46% of the company's overall total revenue. "This continued strong execution across both established and emerging products give us confidence in Microsoft's ability to sustain strong double-digit revenue and earnings growth in the years to come," he said. Ader acknowledged that even though the stock is up 51% this year, the valuation feels what he calls "rich." Still, "we continue to believe this a must-own name for tech investors," he said succinctly. Bank of America "BAC delivered the most impressive earnings print of all the large banks reporting thus far this season," according to Oppenheimer analyst Chris Kotowski. The banking giant reported third-quarter earnings last month that beat on earnings per share and revenue. Since that time shares are up just over 6.5% and the sky's the limit, the firm wrote. "Like others, it beat on trading, but unlike others, it also beat on really solid growth in 'core' net interest income growth," Kotowski said, pointing to the company's loan business. In the unlikely event the pandemic worsens there could be revenue risks, but that's not the firm's base case. Kotowski says the earnings report gives him "increased confidence for strong earnings momentum" over the next few years. "It was a great quarter in itself, but the underlying financials point to a nice 'core' growth trend, and BAC remains one of our top picks," Kotowski said. Workiva Shares of the software-as-a-service cloud platform provider are on fire up 75% this year and almost 133% over the last year. Additionally, the company is coming off of its third-quarter earnings report earlier this week where it beat on revenue and earnings per share. "Workiva reported another very strong quarter, beating on all key metrics and a raising full year guidance," Baird analyst Rob Oliver said. The strength of the report was so impressive for Oliver, that the firm raised its price target on the stock to a Street high of $190 per share from $165. "WK's multi-product platform continues to fire on all cylinders, driving accelerating growth," he added of Workiva which helps businesses compile financial documents in its cloud software. The firm cited a series of positive catalysts for its bullishness including a large influx of new customers, increased movement in ESG initiatives and partner-led deals. "We made WK a top SMID pick for 2021 [and] our conviction is as high as ever," Oliver wrote. Microsoft- William Blair, Buy rating "MSFT kicked off the fiscal year in high fashion, beating on the top and bottom lines, with a blow-out revenue guide that was $1.65 billion above second-quarter consensus. Azure, LinkedIn, MSFT 365, & better-than-expected Windows revenue helped drive the beat. ... .This continued strong execution across both established & emerging products give us confidence in MSFT's ability to sustain strong double-digit revenue and earnings growth in the years to come. While valuation remains rich, we continue to believe this a must-own name for tech investors given MSFT's stellar financial profile, expanding enterprise wallet share, & sustainable competitive advantages in the cloud." Alphabet- Evercore ISI, Outperform rating "Fundamentally (Close To) Flawless. GOOGL posted impressive Beat & Raise Q3 results, with Revenue, Operating Income, and EPS all better than expected and shrugging off meaningful headwinds experience by FB & SNAP. Fundamentals were intrinsically strong, with impressive growth in core Search revenues and significant Operating Margin expansion. Raising estimates and PT to $3,500." Tractor Supply- Raymond James, Strong buy rating "Equally important, the results were broad-based and reflected "robust demand for everyday merchandise, including consumable, usable, and edible products, and continued growth in summer seasonal categories." This coincides with our view that the company is perfectly aligned with the growing importance of land and home care, increasing consumer adoption of DIY projects, and the rising popularity of pet companionship. All-in, the quarter reaffirmed our favorable thesis on TSCO." ON Semiconductor- Needham, Strong Buy rating "Blowout Quarter As Onsemi Emerges As the Leader In Power & Sensing Semis onsemi reported strong results across the board, with sales, plus Non-GAAP gross margin and EPS well ahead of both our estimates and consensus. ... .We are bullish on ON Semiconductor due to its strong competitive positioning in the automotive, industrial, and communications end markets, where it stands to benefit from multiple secular tailwinds, including vehicle electrification, industrial automation, increased power efficiency requirements, ADAS (advanced driver assistance systems), and 5G." Bank of America- Oppenheimer, Outperform rating "BAC delivered the most impressive earnings print of all the large banks reporting thus far this season. Like others, it beat on trading, but unlike others, it also beat on really solid growth in "core" net interest income growth. ... .That said, our price target is driven by 2022 estimates, and 3Q21 results give us increased confidence for strong earnings momentum into 2023E. We believe there is incremental upside in coming quarters as investors focus shifts to 2023. ... .It was a great quarter in itself, but the underlying financials point to a nice 'core' growth trend, and BAC remains one of our top picks." Workiva- Baird, Outperform rating "Workiva reported another very strong quarter, beating on all key metrics and a raising full year guidance. Strength was across all products. Company delivered a 46% y/y increase in customers > 150k ACV. WK's multi-product platform continues to fire on all cylinders, driving accelerating growth. A trio of catalysts including: Europe filing mandate, ESG (early but seeing activity), and partner-led deals are driving strength, and out-year visibility (atleast 20%+ growth). We made WK a top SMID pick for 2021 our conviction is as high as ever."

The logo of Alphabet Inc's Google outside the company's office in Beijing, China, August 8, 2018.

Thomas Peter | Reuters