Goldman Sachs says its a good time for investors to eye single stock options ahead of a slate of quarterly results. “Single stock options are more attractive ahead of earnings than at any time in the past 20+ years, in our view,” analyst John Marshall wrote in a Wednesday note from the firm. “We favor option buying strategies ahead of select earnings events to gain leverage to directional moves.” The firm compiled a list of stocks that Goldman labels as “out-of-consensus opportunities” for put and call options ahead of each company’s quarterly earnings report date. Call options give an investor the right to buy a given amount of an underlying security at specific price — known as the strike price — and date. A put option is the right to sell under these criteria. CNBC Pro picked some of the more noteworthy names from the list of both calls and puts. Nvidia ‘s exceptional earnings report in May helped add more fuel to the hype surrounding artificial intelligence, and sent the stock soaring. Goldman sees 3% upside to earnings consensus for the current quarter and 4% upside for the next four quarters. Nvidia reports on Aug. 23, and the stock could swing 9.3%, according to the firm. “[Goldman Sachs analyst Toshiya Hari] notes that NVDA is supported by its competitive moat founded on consistent investments in hardware and software, and it has been a key enabler, beneficiary of traditional AI for nearly a decade,” the note said. “He believes the company has entered a new phase of growth driven by the emergence and proliferation of Generative AI, as witnessed by the recent step-function increase in its Data Center revenue outlook.” The firm sees 17% upside to the stock over the next 12 months. The firm recommends call options at a $430 strike price for contracts expiring in September. NVDA YTD mountain Nvidia stock has added more than 195% since January. Bath & Body Works , meanwhile, will report quarterly results in mid-August. Shares could move 6.8%, according to Goldman. The retailer raised its forward guidance as it reported results in May, which sent the stock climbing more than 10%. Goldman Sachs retail analyst Kate McShane is forecasting 34% upside for the stock over the next 12 months. “BBWI posted a beat-and-raise quarter on last earnings, where investors were positively surprised about its gross margin performance (42.7% vs 41% guide) due to better expense management and balanced Average Unit Retail (AUR) prices,” the note said. “This indicates strong execution from management despite weak macro and a highly promotional environment.” Ahead of upcoming results, Goldman recommends buying call options for a $37.50 strike price, expiring in August. BBWI YTD mountain Bath & Body Works stock has slipped nearly 13% so far in 2023. eBay is on the Goldman list for put option plays. In February, the company announced plans to lay off 500 employees , or roughly 4% of its workforce. The stock has added about 13% so far this year. eBay is expected to post results on July 26, and the stock could swing 5%, Goldman found. The firm said that “investors continue to question the company’s competitive positioning vis-à-vis broader eCommerce and consumer internet companies,” while analyst Eric Sheridan forecasts about 15% downside for the stock in the next 12 months. Goldman highlighted a $45 strike price for put contracts expiring in August. EBAY YTD mountain eBay stock has added nearly 13% so far this year. — CNBC’s Michael Bloom contributed reporting.
