There’s still time to buy these 'attractive' stocks before earnings season wraps, analysts say

Published Sat, Apr 30 20229:28 AM EDT

There are still plenty of attractive buying opportunities left for investors even as earnings season begins to wind down, Wall Street analysts said this week. These companies are firing on all cylinders, and analysts say now is the time to snap them up. CNBC Pro combed through the most recent Wall Street research to find the top stocks to buy heading into earnings. They include Procore , Restaurant Brands International, Red Rock Resorts, Nordson and Ovintiv. Restaurant Brands International Investment firm Oppenheimer is getting bullish on the fast-food holding company ahead of earnings next Tuesday. Shares of the Canadian company are down more than 4% this year, but Oppenheimer said it sees a stock that is "underpinned by an attractive valuation and diversified global growth model," analyst Brian Bittner wrote in a recent preview note to clients. Bittner said street expectations appear "subdued," but the firm said it's sticking with Restaurant Brands International, which owns Tim Hortons and Burger King. "We believe promising new mgmt. brings smart strategies to measurably improve results by 2H22—particularly as new marketing gains traction menu innovation takes hold, and operational improvements are implemented system-wide," he said. In addition, Oppenheimer says it sees same-store sales upside, as well as capital returns and unit growth "simultaneously improving." Restaurant Brands International also has a much anticipated investor day next week, and Bittner cited the company's "attractive set-up." Meanwhile, the risk/reward continues to be favorable, and investors should accumulate shares now, the firm said. Nordson Expectations are "very low" across the industrial tech sector, but there are some buying opportunities that investors should absolutely not ignore, according to investment firm Berenberg. The firm said in a recent note to clients that Nordson is a top pick heading into earnings in May. Shares of the industrial adhesives and sealants company are down 15% this year, and analyst Andrew Buscaglia believes the stock is priced just right. "For NDSN, we are surprised by how weak the stock has traded ytd given its resilient business model, an uptick in both its medical and electronics units in FQ1 and its guidance for mid-teens EPS growth in 2022," he wrote. The stock is surprisingly still undervalued, though, even as it has a track record of "strong margin resiliency in difficult environments," the firm added. Buscaglia acknowledged some risk due to the company's foreign exposure but said the earnings set-up is just too "attractive" to ignore. "We expect NDSN will remove the low end of its EPS guidance as we expect margins to exceed expectations due to the success of its cost saving initiatives," he said. Procore Technologies "PCOR's hard hat will weather this storm," Jefferies analyst Brent Thill said recently about the construction management software company. Shares of the company are down 30% this year, but the stock is extremely well positioned heading into earnings, according to Thill. The firm said its recent round of survey checks show a major rebound in construction spend with Procore's "best of breed" software as a key beneficiary. "PCOR also has an attractive setup with the easiest comps of the yr. for top line, CRPO [contract release purchase order] and billing," he wrote. Thill also checked in with several of the company's customers and said he is particularly impressed by Procore's return on investment. Inflation is likely to drive some near-term uncertainty, but patient investors stand to be reward, he added. "The long-term growth levers (large TAM, intl. oppty., and payments/insurance expansion) are intact," Thill wrote. Red Rock Resorts - Wells Fargo, Overweight rating "Growing macro pressures make it difficult to have high conviction here, but we could envision a scenario where a soft-landing for the consumer, combined with a reasonable/low bar for '23 estimates, & significant YTD underperformance could result in an increasingly attractive set-up for Gaming stocks. … RRR is one of our top ideas, as we believe it's relatively well insulated from the current geopolitical environment/higher pump prices, owns its real estate, & has a solid portfolio of drive-to, regional gaming properties." Procore - Jefferies, Buy rating "PCOR's Hard Hat Will Weather This Storm. … Despite NT macro headwinds (higher inflation/rates), our checks indicated a rebound in construction spend substantiated by data. … PCOR also has an attractive setup with the easiest comps of the yr. for top line, CRPO and billings. … Best of Breed Construction Software. … Also, we note that commercial construction spend in the US showed continued signs of life (despite macro concerns) and was up 6% y/y in Feb., 4% in Jan., and 5% in Dec." Restaurant Brands International - Oppenheimer, Outperform rating "Attractive Set-up Into Investor Day and Results. … QSR shares have performed solidly year-to-date underpinned by an attractive valuation and diversified global growth model. We believe risk/reward remains favorable. … We believe promising new mgmt. brings smart strategies to measurably improve results by 2H22 — particularly as new marketing gains traction menu innovation takes hold, and operational improvements are implemented system-wide. … Capital returns and unit growth simultaneously improving." Ovintiv - Goldman Sachs, Buy rating "While production is expected to lower and operating costs are expected to be higher, due to higher royalties/taxes, we believe this is more than reflected in the stock price. The company continues to trade at a deep discount to peers, and we see an attractive set-up with the shift to higher capital returns once the company achieves its net debt target of sub-$3 bn in 2H2022." Nordson - Berenberg, Buy rating "Expectations are low, execution will be key. … Attractive set-up into Q1. … Valuations for NDSN and GGG are back to very attractive levels, in our view, despite their track records of strong margin resiliency in difficult environments... For NDSN, we are surprised by how weak the stock has traded ytd given its resilient business model, an uptick in both its medical and electronics units in FQ1 and its guidance for mid-teens EPS growth in 2022. … We expect NDSN will remove the low end of its EPS guidance as we expect margins to exceed expectations due to the success of its cost-saving initiatives."

The Red Rock Casino Resort in Las Vegas. The entrance to the Casino/Resort with waterfall design.

Lawrence K. Ho | Los Angeles Times | Getty Images

There are still plenty of attractive buying opportunities left for investors even as earnings season begins to wind down, Wall Street analysts said this week.