Q1 Earnings Preview: 3 Stocks to Buy Before Reports Drop


  • The earnings season has begun, so now is the time to load up on top performers. 
  • Microsoft (MSFT): The firm will beat analyst expectations driven by its AI prowess and cloud investments.
  • Chevron (CVX): With oil trading at $85 per barrel, Chevron will report a sturdy quarter. 
  • Netflix (NFLX): The entertainment blue chip starts a powerful year with momentum likely to continue throughout 2024. 
stocks to buy before earnings - Q1 Earnings Preview: 3 Stocks to Buy Before Reports Drop

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I love earnings season.

But, I am also someone who wants proof for everything. The earnings season is a chance for me to get the proof I need before I make a stock investment. And, it’s a great chance to load up on companies that beat market expectations and are ready to take on the challenges of another quarter. Whether you are a beginner or an expert, reading quarterly results to identify the stocks to buy before earnings can be tedious. But I am here to make the job easier for you.

I’ve identified three companies that are set to beat analyst expectations, and the results will take these stocks higher. If you’ve been waiting and watching for the market to slow down, wait no more. While trading at a premium, these stocks are set to keep rallying this month, and we may also see a dividend hike.

Let’s dig deeper into the stocks to buy before earnings.

Chevron (CVX)

Chevron (CVX) logo on gas station sign with "diesel" and "food mart" written underneath
Source: Sundry Photography / Shutterstock.com

Oil and gas sector giant Chevron (NYSE:CVX) is Warren Buffet’s favorite stock that enjoys robust cash flow. With oil prices steadily rising and now trading at over $85 per barrel, Chevron preps to report impressive quarterly results. The company aims to increase production and free cash flow through the Hess (NYSE:HES) deal. This means higher dividends.

A dividend aristocrat, Chevron has steadily paid dividends for over two decades. Trading at $162, the stock is up 8% year-to-date (YTD) but lower than the highs it achieved at the end of 2022. So, the stock has potential to keep moving upward. It boasts a dividend yield of 4.02%. And, the strong cash flow will allow it to sustain the dividends for years to come. 

Also, Chevron has managed to report solid earnings even when oil was trading in the range of $70. But this quarter has seen the oil sector soar which will impact the top and bottom line. Since its performance is dependent on oil and gas prices, it looks undervalued now.

In Q4 results, the company saw a revenue of $2.3 billion while increasing the quarterly dividend by 8%. It is diversifying in other areas and has invested in a solar-to-hydrogen project set to commence in 2026. The cash-heavy business will continue to enjoy steady returns and reward investors. 

Chevron is set to report results on April 26. The stock is moving closer to $200 and is a hot buy now. 

Microsoft (MSFT)

MSFT stock: A Microsoft office building
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Tech giant Microsoft (NASDAQ:MSFT) has been in the buy range for a long time now. However, the upcoming earnings could see the stock rally. Driven by its artificial intelligence (AI) prowess and growing revenue, Microsoft may report record numbers in upcoming earnings. 

The safe and steady stock is exchanging hands for $426 today and is already up 14% YTD. It’s gone from $370 in Jan to $426 today and is up 47% in the year.

The company’s hefty investment in OpenAI is paying off, leading to increased interest in the AI space. Further, its cloud business is thriving, and it recently announced an investment of $2.9 billion in AI and cloud infrastructure in Japan. 

Additionally, MSFT’s Co-Pilot has become an integral part of several organizations. In the second-quarter results, the company proved the cloud division’s monstrous growth.

Specifically, the cloud segment generated revenue of $25.88 billion, up 20% in the quarter. Microsoft reported a revenue of $62 billion and has guided revenue in the range of $60 and $61 billion in the third quarter. It managed to beat analyst expectations.

With a new AI hub in London, MSFT has an explosive future. Thus, buy the stock before the reports drop. 

Netflix (NFLX)

Netflix (NFLX) logo displayed on smartphone on top of pile of money.
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Blue-chip stock Netflix (NASDAQ:NFLX) is set to soar higher after the earnings report on April 18. Optimism is soaring about anticipated results. It has bounced back from the lows of 2022 , reporting impressive numbers in the last quarter. 

Also, the company’s Q4 revenue hit $8.83 billion. Now, it’s expecting the Q1 revenue of $9.2 billion, which will be a significant year-over-year (YOY) jump. NFLX cracked down on password sharing and then started a cheaper subscription plan which has been favorable. 

So, this led to subscriber increase and boosted the company’s revenue growth. Further, Netflix is adding premium content to prevent losing customers amid the streaming wars.

Finally, the stock has always traded at a premium and is exchanging hands for $618 and is up 31% YTD. NFLX started the year at $468 and has been moving higher over the past three months. It is already up 82% in the year. And, the stock could hit a new 52-week high after smashing the analyst expectations in the upcoming results.

JP Morgan has already raised the price target of the stock to $650 with an overweight rating. Several analysts raised the price target of NFLX. Make it a clear buy before the results print. 

On the date of publication, Vandita Jadeja did not hold (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 InvestorPlace.com Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

Article printed from InvestorPlace Media, https://investorplace.com/2024/04/q1-earnings-preview-3-stocks-to-buy-before-reports-drop/.

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