By Jacob Sonenshine
Strategists at Evercore have taken a swing at a vital question for investors: Which stocks are most likely to jump as companies unveil their financial results?
A stock screen the investment bank published Sunday looked for potential winners. It targeted companies in the Russell 3000 Index whose sales and profits both exceeded analysts' forecasts in at least seven of the past eight quarters. For a company to qualify, the consensus forecast for earnings had to have risen by at least 1% in the past month, a sign of business momentum.
Every stock on the list trades at a forward price/earnings multiple that is at least 5% below its five-year average, creating the potential for strong earnings to give the shares a boost. Every stock on the screen also beat the index by one percentage point on average in the month after earnings following each of their past eight reports.
The research comes as companies will start reporting their fourth-quarter results this week, beginning with the banks. JPMorgan Chase will kick off the process, reporting its results on Tuesday morning.
Earnings season always represents investors and traders with opportunities to capitalize on large stock-price movements as companies reveal whether their financial performance met, exceeded or fell short of the market's expectations.
Evercore's list includes Booking Holdings, Deckers Outdoor, Dutch Bros, Gap, Sprouts Farmers Market, AppLovin, CrowdStrike, Cloudflare, Fortinet, Zebra Technologies, S&P Global, and Sofi Technologies.
An especially interesting name is Fortinet, a $58 billion provider of cybersecurity software. Unlike many of the consumer and financial companies that made Evercore's cut, demand for its products isn't particularly vulnerable to a weakening economy.
Shares trade at less than 27 times the earnings per share expected for the coming 12 months. That is not only 40% below Fortinet's five-year average, it is one of the lowest valuations among cybersecurity stocks. Some of them are valued at well over 100 times.
That makes the stock look cheap, especially because earnings are likely to exceed estimates. Profits have surpassed analysts' consensus forecasts in seven of the past eight quarters, and sales haven't fallen short of expectations once.
For 2026, analysts project sales will rise 27% to $2.73 billion as the entire industry grows. Salaries and marketing costs likely won't rise as fast as revenue, so profit margins should increase. Earnings are expected to rise 30%.
If Fortinet proves it is on course to achieve that type of growth, it could take the stock higher. The fourth-quarter results come out on Feb. 5.
Choose from this list of stocks.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 12, 2026 15:54 ET (20:54 GMT)
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