Wall Street analysts say to bet on these global stocks heading into earnings

Published Thu, Feb 3 202210:30 PM EST

As Europe's earnings season gets off to a positive start, with a slew of strong results, CNBC Pro uncovers some of Wall Street's top stock picks. By Feb. 1, 29% of European companies that had reported earnings had beaten their earnings per share (EPS) estimates, according to Morgan Stanley , while a "record" 63% beat their sales estimates. However, the specter of record-high inflation and growing geopolitical tensions over Ukraine are weighing on the minds of investors, despite the early set of strong results. Against this backdrop, CNBC Pro highlights five of Wall Street's favorite stocks: Deutsche Post Morgan Stanley analyst Ross MacDonald said the German logistics behemoth is most likely to outperform this earnings season given its "strong risk reward" and "low consensus expectations." The bank expects Deutsche Post to deliver above-consensus earnings for 2021 on the back of its "strong pricing" and a smooth peak season. The bank has forecast a "very strong" 2022 for the company and believes its exposure to the secular growth of e-commerce is not yet fully reflected in its valuation. Moreover, the company is also more resilient to disruption from Amazon compared to its peers in the U.S, MacDonald said. Deutsche Post will report its financial results for 2021 on Mar. 9. Heineken Heineken , the world's second-largest brewer, is one of Credit Suisse's "highest-conviction" stock picks for 2022. The Swiss bank expects the brewer to deliver a price mix (which takes into account different pricing strategies) of 8% for 2021 and 2022 — significantly higher than market estimates of 6% and 4.6%, respectively, Credit Suisse's analyst Richard Kersley said on Jan. 28. The bank is also 16% above consensus on the brewer's EPS estimates for 2022, led by stronger pricing in emerging markets, premium trends and recoveries in Europe and the Asia-pacific, it said. Heineken will report its financial results for 2021 on Feb. 16. BP Goldman Sachs said the oil industry is poised to perform well this year, with the investment bank's EPS estimates for the sector 44% above consensus, Goldman's analyst Michele Della Vigna said on Jan. 20. The bank said it believes BP is on the cusp of delivering one of the industry's strongest pipelines of new oil and gas projects. The oil major is also intensifying its focus on cost efficiency and de-carbonization, Vigna added. In addition, cash flow growth will also unlock higher returns to shareholders through dividends and accelerated buybacks, Goldman said, with BP one of the sector's leaders in terms of total cash returns to shareholders. BP will report its financial results for 2021 on Feb. 8. TotalEnergies French oil major TotalEnergies is another of Goldman's top picks, with the bank describing the company as a "structural industry winner" with "strong cash flow generation." The investment bank has forecast dividend yield of 5.4% and about 2.9% in buybacks for the company in 2022 — making it one of the industry's leaders in terms of cash returns to shareholders, Vigna said. The company is also likely to benefit from strong spot gas exposure this quarter, he added. TotalEnergies will report its financial results for 2021 on Feb. 10. Engie Morgan Stanley believes the French utility company's new strategic plan creates the potential for a re-rating — a revaluation by analysts. It expects the first phase of this to take place this year and a second phase contingent on the materialization of the company's growth potential in wind and solar. In the near-term, the bank expects Engie 's full-year results release to be a "positive catalyst" for the stock, with the bank anticipating a better-than-expected performance. "We also expect Engie to surprise positively on earnings guidance for 2022-24 on the back of the supportive commodity environment - we are 15% above consensus on average for 2022-25 recurring net income," MacDonald said. Engie will report its financial results for 2021 on Feb. 15.

Heineken beer cans sit stacked at the Heineken NV brewery in Zoeterwoude, Netherlands.

Jasper Juinen | Bloomberg | Getty Images

As Europe's earnings season gets off to a positive start, with a slew of strong results, CNBC Pro uncovers some of Wall Street's top stock picks.