{"id":33844,"date":"2023-07-10T18:52:29","date_gmt":"2023-07-10T22:52:29","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/citi-ebay-and-5-more-cheap-stocks-to-buy-before-earnings\/"},"modified":"2023-07-10T18:52:31","modified_gmt":"2023-07-10T22:52:31","slug":"citi-ebay-and-5-more-cheap-stocks-to-buy-before-earnings","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=33844","title":{"rendered":"Citi, eBay, and 5 More Cheap Stocks to Buy Before Earnings"},"content":{"rendered":"
\n

Don\u2019t expect the stock market to surge this earnings season, which kicks off this week with the big banks. It\u2019s already too pricey to be moved by even those robust reports. That said, there are still stocks that could ride a wave of potentially good numbers.<\/p>\n

But before we get to the names that could pop, let\u2019s talk about the broader market. The
\n Russell 1000 index
\n is up more than 20% from its October low. That sizable increase has raised the index\u2019s forward price\/earnings multiple to roughly 19 times from about 15 times, a high valuation given how high interest rates are. <\/p>\n

\n

Right now, stock prices are already reflecting solid profit growth for the next year at least. At this point, modest earnings beats can\u2019t do much to lift the broader market. Only really big beats can do the trick. <\/p>\n

That doesn\u2019t mean, though, that there aren\u2019t cheaper stocks that won\u2019t have nice gains even if their earnings don\u2019t wow. <\/p>\n

Evercore strategists went looking for those names. They screened the Russell 1000 for companies with at least $10 billion market values that have ranked in the index\u2019s bottom 50th percentile of performance since the end of March, the time when concern about bank failures and the stability of the financial system began to ease. <\/p>\n

The companies also had to have beats for both earnings per share and sales in at least seven out of the past eight quarters, with no doubles misses, or misses on both top and bottom lines. And they had to have a double beat in this year\u2019s first quarter\u2014plus an increase in their shares during the trading day after their releases.\u00a0<\/p>\n

Those that made the cut:
\n Kraft-Heinz
\n (ticker: KHC), utility
\n Southern
\n Company (SO),
\n Procter & Gamble
\n (PG), Hershey (HSY), Citigroup (C),
\n eBay
\n (EBAY), and
\n Lululemon Athletica
\n (LULU). <\/p>\n

Let\u2019s take a closer look at the last three stocks on the list. <\/p>\n

Citigroup is about flat since the end of March, compared with the Russell 1000\u2019s just under 7% gain. Besides a first-quarter beat, the investment bank has seen EPS expectations for the next year dip since the end of March because of worries over loan volumes\u2014both consumers and businesses are pulling back on borrowing and spending\u2014and a drop in M&A deals. <\/p>\n

All that has made
\n Citi\u2019s<\/span>
\n shares cheap: Its price\/earnings multiple has fallen to just under 7.5 times, less than half of the Russell\u2019s multiple. With expectations low and the potential for its businesses to stabilize soon, Citi simply has to beat estimates and the stock should go higher. The first-quarter double beat pushed up the price by almost 5%. Citi reports its second-quarter numbers Friday.\u00a0<\/p>\n

Also flat is eBay. Analysts\u2019 EPS estimates for the year haven\u2019t moved much since March. The stock is trading at quite a discount to the Russell 1000\u2019s multiple\u201410 times earnings. In the past few years, it sometimes traded at only a few points below the index, according to FactSet. <\/p>\n

If eBay\u2019s earnings, which come out July 26, show any sign that consumers are spending more, the stock should move higher. It rose just over 5% after its last earnings report.\u00a0<\/p>\n

Lululemon Athletica stock is up just over 1%, and the EPS estimates haven\u2019t moved much. But the stock is down from its November 2021 record high and now trades at 29 times earnings\u2014about 50% higher than the Russell 1000\u2019s multiple but down from about triple at the end of 2021.<\/p>\n

Lulu always trades at a premium versus the rest of the market because of its high growth, driven by its e-commerce business and trendiness. The stock should get a boost even if the company\u2019s earnings, out on Sept. 1, are merely solid enough. Lulu\u2019s last report sent the shares up about 11%.\u00a0<\/p>\n

Remember, earnings season starts Friday. You still have time to pick up a few of these stocks\u2014but not a lot.<\/p>\n

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Don\u2019t expect the stock market to surge this earnings season, which kicks off this week with the big banks. It\u2019s already too pricey to be moved by even those robust reports. That said, there are still stocks that could ride a wave of potentially good numbers. But before we get to the names that could […]<\/p>\n","protected":false},"author":1,"featured_media":33845,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-33844","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nCiti, eBay, and 5 More Cheap Stocks to Buy Before Earnings | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Don\u2019t expect the stock market to surge this earnings season, which kicks off this week with the big banks. 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