Shares like Nike and McDonald’s are properly positioned in a tricky financial system

There’s a complete bunch of corporations which can be firing on all cylinders and well-positioned going into the third quarter and second half, in keeping with Wall Road analysts.

These shares additionally supply defensive potential, analysts say, notably if the macro setting worsens.

Of the practically 300 corporations within the S&P 500 which have to date reported their newest quarter’s earnings, nearly 78% topped analyst expectations, in keeping with Refinitiv.

CNBC Professional combed by means of high Wall Road analysis to seek out corporations that analysts consider are persevering with to execute properly following these earnings.

They embody: McDonald’s, Nike, Citizens Financial, Pool Corp. and Autoliv.

The worldwide athletic items retailer hasn’t been immune to provide chain challenges, however funding agency Jefferies says that the inventory is simply too “enticing” to disregard proper now.

Shares of the corporate are up nearly 12% since Nike’s fiscal fourth-quarter earnings report in late June, the place it beat analysts’ expectations.

Jefferies mentioned in a latest notice that Nike is simply beginning to hit its stride.

Stock and provide chains are starting to stabilize and that ought to lead the inventory increased, in keeping with analyst Randal Konik.

“Supported by a rising appreciation for well being and wellness and informal life, NKE’s enterprise and model are strengthening globally, and we anticipate that the corporate’s continued emphasis on digital ought to result in share positive factors forward,” the analyst wrote.

Demand stays robust as properly, Konik famous, whilst North American gross sales are down barely.

In the meantime, whereas many corporations are seeing FX headwinds, Jefferies says its base case is that Nike shall be a key beneficiary of a stronger greenback over the following 12 months.

“Regardless of Covid points impacting all corporations, NKE is executing properly, and we consider the inventory a number of has room to broaden,” Konik mentioned.

The pool provide and outside residing firm is coming off a largely combined earnings report final quarter, however funding agency Goldman Sachs says the inventory simply is not getting sufficient credit score.

Analyst Susan Maklari wrote in a latest earnings observe up notice to shoppers that Pool is “executing towards a moderating macro.”

“We keep our favorable view on POOL following 2Q outcomes as we search for its technique together with significant money era to drive EPS towards an unsure macro backdrop,” she added.

The analyst additionally says Pool Corp is a beneficiary of fast inflation, giving it loads of pricing energy properly into 2023.

As well as, Maklari referred to as Pool’s income outlook “favorable” as gross sales stay sturdy in lots of the firm’s year-round markets.

“Furthermore, with 80% of revenues pushed by upkeep and restore, we consider POOL is properly positioned to ship progress off the present base regardless of a slower financial setting,” she mentioned.

Development backlogs are easing, too, she famous and provide chain normalization is properly underway.

Goldman mentioned this 12 months’s selloff is overdone and that buyers should purchase the inventory now.

Shares of Pool Corp. are down nearly 37% to date in 2022.

The auto security provider is firing on all cylinders, Mizuho analyst Vijay Rakesh mentioned final week.

Shares are up 20% this month and Autoliv is coming off a really robust second-quarter earnings report on July 22.

Rakesh acknowledged that provide chains have been a difficulty but it surely seems to be like that is starting to average.

“ALV famous tailwinds with pricing, and a greater 2H auto LVP (mild automobile manufacturing) rebound as provide chains re-open post-Covid shutdowns,” he mentioned.

The macroeconomy is a threat, Rakesh wrote, however buyers ought to stay calm as headwinds from rising prices might have peaked.

“Whereas many uncooked supplies stay elevated vs. prepandemic ranges, we consider some commodities have began to melt, with pricing doubtlessly having peaked, which may very well be a tailwind to raised gross margins,” he wrote.

All informed, Rakesh says Autoliv is properly positioned for a giant end to 2022.

“We see ALV persevering with to execute properly, with latest worth will increase supporting stronger LVP outperformance in a tricky setting within the near-term, with wins in EV driving higher content material positive factors,”