Buy Palo Alto if it sees a post-earnings sell-off, according to this chief investment officer

Michael Landsberg, CIO at Landsberg Bennett Private Wealth Management, offers investment insights ahead of key earnings reports, advocating for buying opportunities in specific names. He views any post-earnings dip in Palo Alto Networks as a strategic entry point, citing the robust cybersecurity sector and potential 16% EPS growth, despite the stock's recent weakness. Landsberg is also bullish on Viking Holdings, projecting 32% earnings growth driven by its high-end market appeal. Conversely, he remains cautious on Estee Lauder, highlighting its stagnant revenue and intense competition, suggesting that while an 85% YOY earnings decline could signal a bottom, it is not a current or planned holding for his firm.

Analysis

Ahead of upcoming earnings reports, Michael Landsberg of Landsberg Bennett Private Wealth Management has identified distinct opportunities and risks across several key stocks. For Palo Alto Networks (PANW), he advocates for a 'buy the dip' strategy, suggesting that the stock's recent decline of over 15% in the past six months presents a compelling entry point if further weakness follows its earnings announcement. This view is conditional on the company reporting at least 16% year-over-year EPS growth, underpinned by the long-term secular tailwind of the cybersecurity sector's need to evolve with artificial intelligence. In contrast, Landsberg is bullish on Viking Holdings (VIK) pre-earnings, projecting a significant 32% year-over-year earnings growth. He attributes this to Viking's successful niche strategy, which targets high-end consumers with smaller, more exclusive cruise experiences, a model he believes will sustain its growth trajectory despite the stock's 37% year-to-date rally. Conversely, he expresses significant caution on Estee Lauder (EL), labeling the stock as 'tricky' due to a lack of earnings and revenue growth for over four years and intense competition. While a potential 85% year-over-year decline in earnings could mark a bottom, he currently sees no compelling reason to invest, citing that its fundamentals do not generate the excitement required for his firm to take a position.

Key Decisions for Investors

• For Palo Alto Networks, investors should monitor the upcoming earnings report for year-over-year EPS growth of at least 16%, as any subsequent share price weakness could represent a strategic entry point given the strong secular trends in cybersecurity.
• Investors bullish on the premium travel sector could consider Viking Holdings, which is projected to deliver 32% earnings growth, but should be mindful that the stock has already appreciated over 37% year-to-date, suggesting a high bar for its upcoming earnings release.
• Caution is warranted for Estee Lauder due to its multi-year stagnation in revenue and earnings; while a significant earnings decline might signal a trough, investors should await clear evidence of a fundamental turnaround before committing capital.