3 Stocks We’d Still Buy After Earnings
We like these undervalued stocks today.
Susan Dziubinski: Hi, I’m Susan Dziubinski, co-host of The Morning Filter podcast. On a recent episode, we talked about several stocks that Morningstar Chief US Market Strategist Dave Sekera continues to like as stock picks after earnings. Those stocks are Microsoft MSFT, Alphabet GOOGL, S&P Global SPGI, Charles Schwab SCHW, and Northrop Grumman NOC.
Today, we’re taking a look at a few of Dave’s other stock picks from earlier this year that continue to look attractive after earnings. We think these are undervalued stocks to buy today.
3 Stocks We’d Still Buy After Earnings
The first undervalued stock we still like after earnings is LPL Financial. LPL is the largest independent broker/dealer in the United States. We think the company has carved out a wide economic moat underpinned by switching costs and a durable cost advantage relative to smaller independent broker/dealers. We expect the firm to be a long-term winner in the lucrative US wealth management market. Over the next decade, we’re forecasting revenue to grow at an 11.5% compound annual growth rate, operating profit to grow 16.6% annually, and diluted earnings per share to grow at a compound annual growth rate of 21.1%. LPL stock trades well below our $543 fair value estimate.
Read Morningstar’s full report on LPL Financial.
The next stock we continue to pound the table on after earnings is CNH Industrial. CNH is the world’s second-largest manufacturer of agricultural machinery and a major player in construction equipment, too. We think the company maintains a narrow economic moat due to intangible assets and switching costs. A depressed agricultural cycle and a prolonged slump in heavy-machinery demand have weighed on results, but we expect a recovery in 2027 and beyond. For the core agriculture segment, we forecast approximately 15% average growth over the remainder of our five-year horizon, with margins expanding to an average of 16%. For the construction segment, we’re forecasting an average growth rate of almost 10% and a modest 5% expansion in operating margin. The stock looks significantly undervalued relative to our $21 fair value estimate.
Read Morningstar’s full report on CNH Industrial.
The final undervalued stock we’re still recommending after earnings is Omnicom Group. Omnicom is the largest traditional advertising holding company. We think Omnicom possesses a narrow economic moat that stems from intangible assets. Omnicom acquired IPG almost a year ago, and while it’s uncertain how much post-acquisition synergy will actually be captured over the next few years, we like the risk/reward balance here. In addition, we haven’t yet seen any meaningful AI disruption of the agency revenue model and view this potential headwind as overblown. We think Omnicom stock is worth $115, and shares trade well below that.
Read Morningstar’s full report on Omnicom Group.
For more stock ideas, be sure to tune in to The Morning Filter each week, wherever you get your podcasts. And visit Morningstar.com, too.
Morningstar director Sean Dunlop and analysts Mark Giarelli and George Maglares provided the research behind this segment.
Watch 2 Stocks to Buy for Growth Without Overpaying for more from Susan Dziubinski.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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