These underowned stocks could surprise the market with upside this earnings season, BofA says

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Bank of America screened for underowned stocks its analysts think could top Wall Street's first-quarter earnings estimates.

As another earnings season picks up, Bank of America says investors may find upside opportunities in certain underowned stocks that could beat expectations. Several U.S. banks are releasing their first-quarter earnings on Friday, offering the first peek at performance since a series of bank failures in March. JPMorgan Chase , Wells Fargo , Citigroup , as well as regional name PNC Financial , are posting their quarterly results before the bell.

The stock is considered a defensive name with promising dividend growth, currently yielding 2.7%. On Thursday, Merck was upgraded by Citi, which said its drug pipeline was underappreciated by the market. More than 70% of analysts covering Merck are bullish on the stock, according to Refinitiv data. Shares are trading about 3.9% below its 12-month consensus price target of $118.96. Medical device maker Resmed also made the list, with a z-score of 0.8 and relative weight value of 0.1.

 

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