Forget the Noise: Buy These 3 Unfairly Punished Stocks Before Earnings Euphoria Hits


  • Forget the noise: buy these three unfairly punished stocks before earnings euphoria hits.
  • Palo Alto Networks (PANW): The cybersecurity firm is due for a comeback quarter. 
  • McDonald’s (MCD): Its growth strategy should start paying dividends to shareholders. 
  • Nike (NKE): Analysts say the sneaker maker’s stock has been punished enough. 
unfairly punished stocks - Forget the Noise: Buy These 3 Unfairly Punished Stocks Before Earnings Euphoria Hits

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Earnings season is a time when many companies redeem themselves. It doesn’t take much for a beaten down stock to turnaround. A strong quarterly print and upbeat guidance can lead to a big reversal higher in a share price. The stock of United Airlines (NYSE:UAL) just rose 17% in a single day after the carrier issued better-than-expected financial results and offered a bullish outlook to Wall Street. The post-earnings bump pushed UAL stock into positive territory for the year.

So, whose next? Which beaten down stocks are also likely to move sharply higher when they report first quarter 2024 financial results in the coming weeks? There are plenty of candidates given that many well-known and popular names have seen their share price slide lower since the start of the year while the broader market rallied between January and March. Forget the noise: buy these three unfairly punished stocks before earnings euphoria hits.

Palo Alto Networks (PANW)

Palo Alto Networks (PANW) logo on corporate building
Source: Sundry Photography /

Shares of cybersecurity firm Palo Alto Networks (NASDAQ:PANW) fell more than 20% and logged their worst one-day performance ever after the company’s last earnings print. Analysts seemed to agree that the selloff was an overreaction and remain bullish on PANW stock. The company could be in for a bounce back quarter after it reports 2024 first quarter results on May 28. Year to date, the stock is down 2%, which is uncharacteristic. Through five years, PANW stock is up 245%.

Palo Alto Networks did manage to beat Wall Street forecasts with its most recent financial results. The problem was with the guidance. The company lowered its full-year guidance for both revenue and billings, sending investors heading for the hills. Management linked the lowered guidance to a shift in strategy, wanting to accelerate growth in artificial intelligence (AI) products. They also said that markets misinterpreted the guidance that was provided. Look for a big clarification during the next earnings print.

McDonald’s (MCD)

New McDonalds Being Built in 2020, Close Up of Main McD Sign
Source: Retail Photographer /

It seems strange that shares of the Golden Arches are in decline. But the stock of McDonald’s (NYSE:MCD) has fallen nearly 10% this year and is down 7% over the last 12 months. The share price drop comes despite McDonald’s posting consistently strong financial results, raising its dividend, and undertaking an ambitious growth strategy. Most recently, McDonald’s announced a partnership with Krispy Kreme (NASDAQ:DNUT) that will see its doughnuts sold at McDonald’s restaurants across the U.S.

The Krispy Kreme deal comes as McDonald’s diversifies its menu amid a big growth push. Last December, management announced plans to open 9,000 new restaurant locations and add 100 million members to its loyalty rewards program by 2027. The company is also launching a new spin-off brand called “CosMc’s” that’s aimed at teens and twentysomethings. Look for MCD stock to pop if McDonald’s earnings on April 30 show the strategies are bolstering sales and profits.

Nike (NKE)

A stack of red Nike (NKE) shoe boxes.
Source: mimohe /

Nike’s (NYSE:NKE) stock has been unfairly punished and is likely to rise with improved earnings and as the Summer Olympics in Paris, France approach. This is the conclusion of analysts at Bank of America (NYSE:BAC), which recently upgraded NKE stock to a “buy” rating from “neutral” previously and increased their price target on the shares to $113 from $110. Bank of America said in its upgrade that earnings estimates for the sneaker maker “finally look achievable.”

Analysts also cited an upcoming catalyst with the Paris Olympics. Nike makes the uniforms for Team USA. NKE stock has been terrible for several years now. So far in 2024, the company’s share price is down 11%. Its 12-month performance is negative 25%. Problems have included bloated inventories and slowing sales in China. Watch for the company to show progress in those troubled areas when it next reports earnings on June 25. Any positive signs are likely to send NKE stock higher.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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