Bank of America says these five stocks have room to run following earnings

Bank of America has highlighted several stocks with significant upside potential following their latest quarterly reports, including Microsoft, Delta Air Lines, Domino's Pizza, Procter & Gamble, and Levi Strauss. Analysts raised price targets for Delta to $67 and Levi Strauss to $26, citing Delta's robust premium service growth and focus on free cash flow despite broader consumer uncertainty, and Levi's sustainable sales inflection and international expansion opportunities. Domino's is positioned for market share gains through value and innovation, while Microsoft is expected to achieve sustained low double-digit growth from its cloud services, and P&G to deliver continued top-line beats due to portfolio optimization.

Analysis

Bank of America has identified a select group of companies, including Microsoft, Delta Air Lines, Domino's Pizza, Procter & Gamble, and Levi Strauss, as having significant upside potential following recent quarterly earnings reports. For Delta Air Lines (DAL), despite a 15% year-to-date share price decline, analysts highlight a compelling valuation, raising the price target to $67 from $60. This is underpinned by robust growth in its premium services, where Q2 revenues grew 4.7%, in stark contrast to a 5.5% decline in main cabin revenues, demonstrating resilience amid consumer uncertainty. Levi Strauss (LEVI) is viewed as a 'consistent compounder,' with increased conviction in its sustainable sales growth leading to a price objective increase to $26. Analysts note the potential for conservative second-half guidance and opportunities for international market share gains. Similarly, Domino's Pizza (DPZ) is positioned for market share gains driven by its value proposition, loyalty programs, and a scale advantage that supports both investment and franchisee growth. For consumer staples and technology, Procter & Gamble (PG) is expected to deliver sustainable top-line beats from a more focused portfolio, while Microsoft (MSFT) is positioned for sustained low double-digit growth driven by its Azure and Office 365 cloud platforms.

Key Decisions for Investors

• Given Bank of America's strong conviction and upward revisions to price targets for Delta and Levi Strauss, investors could consider these buy-rated stocks for potential upside post-earnings.
• For Delta Air Lines, investors should look past the year-to-date share price decline and focus on the bifurcation in revenue, where resilient premium cabin strength and commitment to debt reduction present a compelling value case.
• Consider Levi's and Domino's, both up 11% year-to-date, as names with potential for further gains driven by sustainable sales momentum, market share expansion, and strong operational execution.
• For long-term growth positioning, Microsoft's sustained double-digit growth outlook powered by its cloud segments offers a compelling thesis, while Procter & Gamble provides exposure to a staples bellwether showing positive results from strategic restructuring.