These stocks growing profits just got cheaper, and analysts love them
Navigating this earnings season has been difficult for many investors, as companies have slashed earnings outlooks for this year citing high inflation that’s increasing costs, inventory issues and economic uncertainty. However, there are some standout names that look relatively cheaper after reporting earnings. These stocks are also loved by analysts. To find them, CNBC Pro screened the S & P 500 for companies which meet the following criteria: Their forward price-to-earnings ratio is 20% below their five-year average. 2022 earnings per share are expected to grow by more than 15%. At least 60% of analysts covering them rate them as a buy. Our search yielded a concentrated list made up of several energy names as well as media giant Disney and Signature Bank . Disney on Wednesday evening reported better-than-expected quarterly results, sending the stock up more than 5% on Thursday. Who made the list Walt Disney Company , for example, is buy-rated by nearly 70% of the analysts covering the stock. Wall Street especially cheered the company after its earnings beat , when it reported subscribers for its combined Hulu, ESPN+ and Disney+ streaming services outpaced Netflix. Analysts also pointed to strong results from its parks segment, showing that they’re well positioned ahead of a recession. The entertainment company’s price to earnings discount is more than 24%, with a 2022 earnings per share rate of 68.3%. The company just posted solid earnings that beat expectations for the second quarter and is slated to see even more growth going forward. Energy companies such as Valero , Diamondback and Halliburton all made the list. Valero has the highest 2022 earnings per share rate of 759.6%, and boasts a price to earnings discount of nearly 77%. Energy companies have been the top performers in the S & P 500 this year , supported by surging commodity prices. Even though oil has retreated from recent highs, these companies have pledged to keep up with demand. The highest rated company of the group is Signature Bank, which has a 100% buy rating from Wall Street analysts covering it. The financial services company also has a 2022 earnings per share growth forecast of nearly 46%. JPMorgan recently moved Signature to the second spot on its “Fab 5” list. The company has a strong growth tailwind, according to the firm, which sets it up well going forward. “Signature also has a high quality (and low risk) balance sheet, which should give investors comfort in the quarters ahead,” Steven Alexopoulos wrote in a July 1 note.