Second quarter earnings season has delivered robust profits despite the recessionary concerns that have roiled the market in recent days. Now, Wolfe Research recommends a handful of stocks that are positioned to outperform in the back half of the year. The Wall Street research firm screened the S & P 500 for stocks that not only beat both analysts’ earnings and revenue expectations in the first half of the year, but that also saw positive share price action around the release of their first- and second-quarter results. “Our sense is that companies beating on the top- and bottom-lines in addition to having positive price action around their reports should have an increased chance of outperforming their peers in the months ahead,” Chris Senyek, Wolfe’s chief investment strategist, wrote in a report to clients on Monday. Here are some of the stocks that made the Wolfe Research screen: Apple was the only “Magnificent Seven” stock that made Wolfe’s screen. Shares of the iPhone and iPad maker are up 13% this year, sending its market value above $3.3 trillion. But Apple has soared 19% in just the past three months alone. Wolfe also notes that Apple sells at a price-to-earnings ratio of 31.3 based on 2024 estimated earnings. Earlier this month, Apple beat estimates in the June quarter , with iPhone, iPad and Services sales all surpassing Street expectations. Apple’s finance chief Luca Maestri said it expects Services sales growth in the current quarter to grow at around 14% – about the same rate as the last three quarters. Much of the Street is also bullish on Apple, with 35 of the 46 analysts polled by LSEG holding a buy or strong buy rating. The consensus price target on Apple is $237, which implies about 9% upside from Monday’s close. Kellanova also made Wolfe’s list. The former snack food unit of Kellogg’s that was spun out in March last year now has a market cap of more than $26 billion, and shares have soared 31% in the past month alone, hitting a new 52-week high on Monday. Kellanova stirred this month’s gains by topping earnings and revenue estimates that analysts polled by FactSet had expected in the second quarter, and raising its full-year outlook. On top of those gains, shares also popped last week following reports that Mars – the provately-held maker of M & M’s and Snickers – was interested in buying the company. CNBC’s David Faber reported that rival Hershey was also interested in a potential takeover. Still, analysts remain mostly neutral on the Pringles maker, according to LSEG. Of 20 analysts covering Chicago-based Kellanova, only a little more than a quarter now rate it a buy, althought that’s up from 14% in July. Zoetis also appeared on the Wolfe screen. Though shares of the former Pfizer Animal Health are down 7% this year, the stock has moved up about 9% in the past three months. Last week, Zoetis surged about 6% on Tuesday after issuing quarterly results. The New Jersey-based company beat earnings and revenue estimates in the second quarter and raised its forecasts for the full-year, per FactSet. Duke Energy , which also reported quarterly results that beat expectations last week, also made Wolfe’s screen. Shares of the North Carolina-based utility have soared 22% in just the past six months.
