We’re still early in the second-quarter earnings cycle. So far, it has mostly been the banks and credit card companies that have reported Q2 results. Earnings from the mega-cap technology names are on deck next. However, FactSet reports that with 14% of S&P 500 companies having announced Q2 numbers, 80% have reported better-than-expected profits and 62% have beaten Wall Street forecasts for their sales.
Those are impressive numbers and show that Corporate America remains resilient despite persistently high interest rates and some evidence that the economy is beginning to slow. As is always the case, stocks can rise and fall sharply depending on whether they miss or beat analysts’ consensus forecasts for their quarterly results. Some companies look well-positioned to beat on their Q2 numbers, and their share prices are likely to vault higher.
Don’t delay! Here are three stocks to buy before Q2 earnings.
Eli Lilly (LLY)
U.S. pharmaceutical giant Eli Lilly (NYSE:LLY) is scheduled to report its Q2 financial results on August 8, and they could be a blockbuster as the company ramps up production and sales of its Mounjaro weight loss medication. A lot has been going right for Eli Lilly heading into the Q2 print. Mounjaro was just approved for use in China, opening up a massive new market in the nation of 1.4 billion people.
Also, Eli Lilly has a second potential blockbuster medication on its hands following the U.S. Food and Drug Administration’s (FDA) recent approval of its Alzheimer’s drug called Kisunla. The treatment for early-stage Alzheimer’s disease is one of only two treatment options currently available for the brain disease and is expected to provide the company with even more blockbuster sales.
Eli Lilly’s stock has risen 85% over the last 12 months and is up 702% over the past five years. Despite the huge growth, analysts see more runway ahead with a consensus Strong Buy rating and median price target 10% higher than current levels.
Apple (AAPL)
Lots of upgrades to Apple (NASDAQ:AAPL) stock on Wall Street ahead of the company’s Q2 print on August 1. Analysts at Bernstein just raised their price target on AAPL stock to $240 a share from $195 previously, citing artificial intelligence (AI) monetization opportunities. Analysts at Piper Sandler (NYSE:PIPR), Bank of America (NYSE:BAC) and Wedbush also raised their price targets on Apple stock and reiterated Buy ratings.
Reasons for optimism aren’t solely related to AI. The analysts also cite an uptick in App Store revenue and a rebound in iPhone sales in China and elsewhere in Asia. Wedbush is so bullish on Apple stock that its analysts are forecasting the company will be the first to achieve a $4 trillion market capitalization within the next 12 months. AAPL stock has been on an upswing since management unveiled its AI strategy in June. Year-to-date, the stock is up 20%.
Costco Wholesale (COST)
Costco Wholesale (NASDAQ:COST) isn’t likely to report its Q2 numbers until the end of August or September. But they’re likely to be very good, especially after the company raised its membership fees for the first time in seven years. The warehouse club has announced it is hiking its basic membership fee by $5, taking it up to $65 from $60. The fee for the higher tier “executive membership” is being raised by $10 to $130 a year.
Costco said the fee increases will impact about 52 million memberships in the U.S. and Canada, about half of which are executive members. Analysts have been calling on Costco to raise its membership fees since the Covid-19 pandemic began in 2020. Many analysts have been banging the table on membership fees over the past few years, noting that the company has typically raised its fees every five years in the past.
The fee increase is a big deal because Costco relies on memberships for most of its revenue and to keep prices low. Beyond the membership fee increase, Costco, which reports its sales on a monthly basis, said that its May sales rose 8.1% from a year earlier to $19.64 billion. Management said sales growth continues to be driven by e-commerce, with online sales rising 15.3% year-over-year in May. COST stock is up 50% over the last 12 months.
On the date of publication, Joel Baglole held a long position in LLY. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.