These stocks are set to move the most on earnings this week

As the Q2 earnings season progresses with 85% of early S&P 500 reporters exceeding expectations, several major stocks, including Chipotle Mexican Grill, Southwest Airlines, and Charter Communications, are anticipated to see significant movement this week following their earnings reports. Chipotle, reporting Wednesday, is projected for a 6% swing, supported by a recent BMO upgrade citing accelerating sales and margin growth from 2H25. Southwest, also reporting Wednesday, could move 5%, following a Deutsche Bank upgrade based on new strategic initiatives and improved ROIC. Charter Communications, reporting Friday, is forecast for a 7% move, with Loop Capital upgrading on its accretive Cox Communications merger and rebrand traction.

Analysis

The second-quarter earnings season is demonstrating early strength, with 85% of the initial 12% of S&P 500 companies reporting positive earnings surprises, setting a favorable market backdrop. Against this trend, several stocks are positioned for significant volatility based on options market pricing ahead of their respective earnings reports. Chipotle Mexican Grill (CMG), despite a nearly 13% decline year-to-date, is a key name to watch, with an implied 6% post-earnings move. A recent BMO Capital Markets upgrade to "outperform" with a $65 price target—a 21% potential upside—is predicated on accelerating same-store sales and margin improvement beginning in the second half of 2025. Southwest Airlines (LUV), already up 10% this year, could see a 5% swing. The bullish case is supported by a Deutsche Bank upgrade citing a refreshed board, new strategic initiatives poised to drive revenue and EBIT growth, and expectations for significantly improved return on invested capital. Charter Communications (CHTR) faces the largest implied move at 7%, with a recent Loop Capital upgrade pointing to a 33% upside to its $510 price target. The primary catalysts for Charter are its pending accretive merger with Cox Communications and early positive results from its "Life Unlimited" converged service offering.

Key Decisions for Investors

• Given the options market is pricing in significant volatility, investors should closely watch the earnings reports for Chipotle, Southwest, and Charter for confirmation of the bullish catalysts recently identified by analysts.
• For Chipotle, which has underperformed by nearly 13% year-to-date, the earnings report is a critical test of BMO's thesis that a sales and margin inflection point is approaching in 2H25.
• Investors in Southwest Airlines should focus on management's discussion of progress on strategic initiatives and board-driven changes, which underpin Deutsche Bank's forecast for improved shareholder returns and earnings growth.
• The key data points for Charter Communications will be any updates on its accretive merger with Cox and the performance of its 'Life Unlimited' offering, as these are central to Loop Capital's bull case and 33% upside target.