Shares are on the verge of rebounding from earnings, UBS says


The Fearless Girl statue is seen outside the New York Stock Exchange (NYSE) in New York, New York, the United States, June 11, 2020.Brendan McDermid | Reuters

(This story is for CNBC Pro subscribers only).According to a new UBS note, third quarter results are really set to start next week, and some stocks are set to take big jumps when they are released.

The financial firm, which is more bullish on S&P 500 earnings than the Wall Street consensus, looked at characteristics that make stocks more likely to see asymmetric price movement when the company reports earnings. These features include improved free cash flow, a lower inventory-to-sales ratio, and a wide range of earnings estimates from Wall Street analysts.

The list identifies “UBS Buy rated stocks that filter well based on the above variables, on a sector neutral basis, which should deliver compelling risk / reward in Q3 reports,” the note said.


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