The major banks kicked off the fourth quarter earnings season Friday, and with inflation still at the highest in generations and a potential recession on the horizon, investors have been waiting for companies’ earnings expectations to come down. The financial sector typically sets the tone for what the next few weeks of earnings could look like and, on Friday morning, the CEOs of all four of the major US banks warned about “mild recessions” potentially coming their way in 2023. Nevertheless, several stocks are poised to see rapid earnings growth this year. CNBC Pro gathered the names of 20 companies that are poised to grow earnings at least 20% in 2023, with some set to post more than 90% earnings growth, using data from FactSet. Each stock on our list has implied upside of at least 20%, based on analysts’ consensus price target. Here are the stocks: Wells Fargo is the one financial stock in the group. It could grow earnings nearly 63% this year. In its financial update Friday morning the bank said net interest income could total about 10% more than the full year 2022 level. Southwest Airlines is still recovering from a systems outage in December that forced it to cancel more than 17,000 flights, leaving thousands of passengers stranded. Last week, Southwest said it expects to post a fourth-quarter loss. Nevertheless, it had the biggest earnings growth potential in the group we screened: 92% in 2023. Analysts estimate its stock price could jump 30%, based on average, 12-month price targets. Delta Air Lines and Alaska Air also turned up, with earnings growth expectations of almost 70% and 26%, respectively. Elsewhere in the travel group, Expedia is looking at 31% earnings growth. And despite the troubles surrounding CEO Elon Musk, and its 37% plunge in December, several Wall Street analysts see a buying opportunity in Tesla in 2023 and reiterated buy ratings in the past two weeks. If analysts are right, investors in the stock can expect roughly 30% earnings growth this year, and a 94% increase in the price of the shares.
