Bank of America highlighted a number of stocks it thinks offer compelling upside after their most recent quarterly results.
It highlighted names in sectors such as technology, consumer products, airlines and food services where the firm sees improved financial prospects despite market uncertainty.
Microsoft, Delta Air Lines and Levi Strauss are among the companies highlighted.
Investment firm reiterates buy ratings for these stocks, citing robust business models and improved fundamentals.
Delta Air Lines’ premium strengths drive analyst confidence
Andrew Didora, a Bank of America analyst, says that Delta Air Lines is still the top choice despite its 15% decline in 2025.
Didora’s bullish outlook was reaffirmed after the latest company earnings report. He cited the airline’s resilience and continued premium offering.
Business and Premium Cabin Revenues grew 4.7% in Q2 2020, despite a 5.5% decline for main cabin revenue.
Didora reported that “Delta’s premium services continue to be strong despite the uncertain environment for consumers.”
The company has also been consistent in its messaging about free cash flow, debt reduction and other positives.
Didora raised his Delta share price target from $60 to $66.7 and encouraged investors to accumulate shares at the current level.
Levi’s and Domino’s are among the consumer brands that have experienced growth.
According to Christopher Nardone, Levi Strauss shows encouraging signs in terms of strategic implementation and growth.
Nardone, following earnings and an annual management meeting expressed his confidence in Nardone’s brand and its international momentum. He also highlighted the ability of Nardone to increase shelf space as well as improve sales at full price.
Levi’s shares are up by 11% in the past year. Bank of America has raised their price target to $26 (from $24), using a multiple of 10x EBITDA/EV.
Analysts described Levis’s sales as “consistently compounding” with sustainable growth.
Domino’s Pizza was also recognized for its operational size and strong value proposition. Analyst Sara Senatore cited the loyalty program, platform innovations, and pricing strategies as the main drivers for continued growth of same-store sales in the second half.
She highlighted Domino’s “scale advantages” and “best in class franchisee unit economies,” which, she said, will continue to support unit expansion.
Stocks have risen by 11% in the past year.
Procter & Gamble is a favorite in the consumer staples industry.
Bank of America referred to the company’s portfolio of global leading brands as “bellwether”.
The recent portfolio-streamlining efforts have now produced positive results. There is potential for consistent outperformance on the top line in the next quarters.
Microsoft’s long-term outlook is strong
Analysts expect Microsoft to grow at a low-double-digit rate over the next 3-5 years.
Bank of America cited the growing profits from Xbox Game Pass and the Office 365 suite as the main contributors in this forecast.
Microsoft’s cloud-based and consumer-centric ecosystems are well positioned for Microsoft to continue its momentum, resulting in a long-term bullish outlook on its stock.
The post Bank of America Picks 5 Stocks with Post Earnings Rally Potential may be updated as new information unfolds.
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