These stocks reporting next week usually top analyst estimates and gain afterward

Amid a strong Q2 earnings season, a screen identifies stocks with a high probability of beating estimates and gaining post-earnings based on historical performance. Mastercard stands out, having historically beaten estimates 93% of the time with an average 1.7% gain, supported by strong analyst buy ratings and a Deutsche Bank price target suggesting 15% upside. Booking Holdings also consistently beats expectations (90% rate, 2% average gain), though its valuation is noted as full. Semiconductor firms Lam Research and Monolithic Power Systems are also highlighted for their post-earnings gains.

Analysis

Against the backdrop of a strong Q2 earnings season that has propelled the S&P 500 to new all-time highs, a quantitative screen has identified several companies with a high probability of outperforming based on historical data. Mastercard (MA) emerges as a key highlight, with a historical record of beating earnings per share estimates 93% of the time and averaging a 1.7% stock price gain on the subsequent trading day. This statistical pattern is reinforced by strong current analyst sentiment, with 30 of 40 analysts rating the stock a buy and Deutsche Bank setting a $650 price target, which implies over 15% upside from recent levels. Similarly, Booking Holdings (BKNG) has historically topped earnings expectations in 90% of its reports, leading to an average post-earnings gain of 2%. However, its 13% year-to-date appreciation has led to a valuation that a Barclays analyst describes as "fairly full," potentially limiting near-term upside even with a positive report. The screen also flagged semiconductor firms Lam Research (LRCX) and Monolithic Power Systems (MPWR) as potential outperformers, with track records of rising 1.3% and 2.5%, respectively, after their earnings announcements.

Key Decisions for Investors

• Investors could consider tactical long positions in Mastercard, Booking Holdings, Lam Research, and Monolithic Power Systems ahead of their earnings reports to capitalize on their historical tendency to beat estimates and gain post-announcement.
• Mastercard appears to be the most compelling opportunity, given its high probability of an earnings beat is coupled with strong analyst consensus and a specific price target indicating significant upside potential.
• For Booking Holdings, investors should weigh the strong historical performance against the noted risk of a full valuation, which could cap immediate share price appreciation even if the company delivers a positive earnings surprise.
• The presence of Lam Research and Monolithic Power Systems suggests investors should monitor the semiconductor sector for similar event-driven trading opportunities around earnings releases.