Stocks that have missed analysts’ expectations on each the highest and backside strains this earnings season could possibly be good candidates to promote, based on Wolfe Research. For probably the most half, the second-quarter earnings season has blown away Wall Street expectations. Approximately 94% of the S & P 500 has already reported, and 82% of corporations have delivered a optimistic earnings shock. About 79% of corporations have posted income exceeding analysts’ estimates. But a number of stocks have lagged their numbers. A latest report from Wolfe Research shared a listing of corporations that buyers may contemplate promoting — stocks that missed each income and earnings expectations this quarter, whereas additionally having damaging year-to-date earnings revisions for 2025. One title on Wolfe’s record was Southwest Airlines , down 8% this 12 months. Last month, Southwest reported adjusted earnings of 43 cents per share on income of $7.24 billion in its newest quarter, whereas analysts polled by FactSet had estimated earnings of 51 cents and income of $7.30 billion. Afterward, Evercore ISI downgraded the Dallas-based service to an in-line ranking from outperform. Still, analyst Duane Pfennigwerth’s $40 worth goal implies Southwest shares may soar 28% from the Wednesday shut. “Trading at 36x ’25E, 11x ’26E EPS, we believe shares are now much closer to fair value and are beginning to more fully price in clean execution of these initiatives into next year,” Pfennigwerth wrote. “We also wonder if the company’s aggressive pace of buyback (likely a big contributor to YTD outperformance) can be sustained at this rate.” Another inventory that Wolfe says buyers may keep away from is Align Technology . Shares of the maker of Invisalign orthodontics have tumbled 32% in 2025. In July, Align’s second-quarter earnings and income missed analysts’ estimates. The firm additionally guided for current-quarter income within the vary of $965 million to $985 million, beneath the FactSet consensus amongst analysts of $1.04 billion. In the wake of the report, Morgan Stanley downgraded Align to equal weight from chubby, slashing its 12-month worth goal to $154 per share from $249. The new forecast implies shares may add one other 7% from the Wednesday shut. “Our prior [overweight] thesis was based on ALGN’s leadership in a high growth category, but growth has been challenged for years, w/ limited clarity on [the] path from here,” wrote analyst Erin Wright. “We view a re-rate lower as warranted, closer to the Dental peer average.” Defense prime contractor Lockheed Martin is one other promote, based on Truist. The funding financial institution downgraded Lockheed to a maintain from purchase after second-quarter income on the maker of the F-35 fighter-bomber fell wanting Wall Street estimates, and it lowered its full-year steering beneath prior estimates. Truist additionally slashed its worth goal to $440 per share from $554, implying the inventory will not do a lot within the coming 12 months. “We are downgrading LMT shares now as we have little confidence that management will be able to execute on its multi-year growth framework, and we can not be certain that more charges will not materialize in the coming quarters,” wrote analyst Michael Ciarmoli. “We expect shares will trade flat for the balance of the year given a lack of catalysts and believe LMT shares will continue to trade at a discounted multiple vs its larger peers.” Shares of Lockheed Martin, which yields virtually 3%, are down 8% on the 12 months.