Bank of America has identified key stocks — Spotify, IBM, IHG, Grab, and Deutsche Bank — as strong ‘buy’ opportunities heading into the upcoming earnings season. Analysts are bullish on Spotify’s streaming growth and IBM’s software synergies, while Deutsche Bank is seen as a compelling re-rating opportunity despite a projected softer quarter. IHG’s resilient asset-light model and Grab’s super-app strategy further underscore their potential for investors.
As the Q2 earnings season approaches, Bank of America has identified a select group of stocks poised for significant upside. The financial giant highlighted several companies, including tech stalwart IBM, as particularly attractive investments before their quarterly reports are released. Other 'buy-rated' stocks, initially flagged by CNBC Pro, include streaming giant Spotify, hospitality leader IHG, Southeast Asian super-app Grab, and European banking powerhouse Deutsche Bank.
Spotify: Bullish on Streaming Growth
Bank of America analyst Jessica Reif Ehrlich maintains a bullish outlook on Spotify ahead of its early August earnings announcement. Ehrlich anticipates robust 2Q26 results, citing "stable underlying trends across key [key performance indicators]" and an acceleration in reported revenue growth, mainly due to diminishing foreign exchange headwinds. Following Spotify's recent investor day, Bank of America expressed increased confidence, though it now seeks tangible execution. Ehrlich pointed to the "announced AI tier, broader monetization potential and multiple engagement levers" as key drivers for long-term growth. Spotify shares have already climbed 5% this month.
IBM: An Irresistible Tech Opportunity
IBM's stock is deemed "too attractive to ignore" by Bank of America analysts. Wamsi Mohan recently boosted his price target for IBM from $315 to $330 per share, anticipating its earnings report later this month. Mohan foresees software trends being significantly bolstered by IBM's acquisition of Confluent. He expects "faster Confluent synergies and stronger growth in software and power & storage infrastructure" to drive upside. With shares up 3.3% this month, Mohan reiterated a 'Buy' rating, emphasizing IBM's strategic shift towards higher-margin software (including M&A), strong free cash flow generation, and the long-term optionality from its quantum computing ventures.
Deutsche Bank: Long-Term Potential Despite Short-Term Softness
Analyst Tarik El Mejjad is holding firm on Deutsche Bank shares in anticipation of its earnings report this month. While a "softer quarter" is projected, with net profit potentially decreasing 2% year-over-year despite a 4% revenue increase due to strategic investments, Private Bank restructuring, and hiring costs, El Mejjad remains optimistic. He points to potential "revenue upside from the company's investment banking division" and strong deposit growth as positive indicators. Bank of America also raised Deutsche Bank's price target from $38 to $39 per share, labelling it "One of Europe's most compelling re-rating opportunities." The stock has gained 8% this year.
IHG: Resilient Model and Shareholder Returns
IHG's appeal stems from its "geographically diversified asset-light model," which Bank of America believes ensures resilience and consistent profits and cash flow. The firm highlights fee growth driven by net system expansion, a strategic shift towards the lucrative luxury segment, and margin improvements. Conversions are expected to further bolster net system growth. IHG is also noted for its commitment to strong shareholder returns through a progressive dividend and potential for recurring share buybacks.
Grab: A Super-App with a Strong Moat
Bank of America rates Grab as a 'Buy,' seeing it as well-positioned to achieve revenue growth alongside profitability in its mobility and deliveries segments. The company's "super-app" strategy allows for efficient cross-utilization and amortization of acquisition costs across various services. This integrated ecosystem creates a "super-app flywheel," providing Grab with a significant competitive moat and unlocking synergies across its diverse business segments.
