Jefferies Has 4 Stocks to Buy That Could Beat the Street on Q3 Earnings

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One thing that always helps a stock get a solid boost is coming in and posting earnings and revenues that are better than the consensus numbers on Wall Street. That is especially if the company has either struggled some or is in a sector that is currently out of favor. A recent research note from Jefferies highlights four stocks that may very well have upside to current expectations.

Jefferies has circled four distinctively different companies that have the potential to beat the consensus views. With the third-quarter earnings season right around the corner, investors may want to rotate to one or all of these stocks. All are rated Buy at Jefferies.

AT&T

This company posted solid second-quarter numbers, and Jefferies thinks it could surprise next month as well. AT&T Inc. (NYSE: T) has to be one of the most ignored dividend plays on Wall Street. In fact, it is the third most underweighted security, and the most under-owned by active fund managers, according to Wall Street data. While growth has been admittedly slower over the past few years, the company continues to expand its user base, and strong product introductions from smartphone vendors has not only driven traffic, but increased device financing plans, an area that many on Wall Street believe could lead to some earnings weakness.

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Many analysts feel that the DirecTV deal was a positive addition to the AT&T family for content distribution and cross-selling, and it is a good bet that the synergies created by the deal are being underestimated by Wall Street. Many analysts see upside to wireless margins, which were a positive earnings driver in the second quarter and are expected to continue through the rest of the year. Jefferies analysts recently met with the CEO and came away feeling the giant carrier is close to hitting on all cylinders.

AT&T investors are paid an outstanding 5.83% dividend. The Jefferies price target for the stock is $40, and the Thomson/First Call consensus estimate is $37. Shares closed Wednesday at $32.20.