Goldman says buy these bargain stocks before their earnings snap back to pre-pandemic levels

Published Tue, Jan 19 20219:04 AM ESTUpdated Tue, Jan 19 20219:10 AM EST

(This story is for CNBC Pro subscribers only.) As earnings season kicks off, Goldman Sachs is telling clients to buy a handful of beaten-down stocks with earnings that are set to top their pre-pandemic levels this year. Goldman is looking out for "laggards with strong earnings prospects," or the S & P 500 companies expected to report 2021 earnings above 2019 earnings. Yet, these stocks are trading below their prices when the market peaked in late February. Goldman equity analysts expect 69% of S & P 500 constituents will report 2021 earnings above 2019 earnings; however, the majority of equities that are expected to fully recoup their pandemic earnings losses by 2021 have also surpassed their prices at the previous market peak. The Wall Street firm's list is made up of stocks that have not surpassed its levels before the pandemic. Goldman also further limited the list to to stocks that have experienced positive earnings revisions since February 2020. Take a look at the list here. Despite Evergy , Atmos Energy and Sempra Energy being down 28%, 27% and 23%, respectively from the market peak in 2019, the companies are expected to grow earnings respectably from 2019 to 2021. Evergy is expected to grow earnings 8%, Atmos Energy is expected to grow earnings 7% and Sempra Energy is expected to grow earnings 16% from 2019 to 2021. Concho Resources is 15% off its peak from a year ago, with earning expected to grow 20% from 2019. Goldman also likes insurance companies Allstate and Aflac heading into earnings season. The pair are down 12% and 9% since the market peak last February with earnings expected to grow 10% and 5%, respectively. Homebuilder PulteGroup is down nearly 10% from its peak in February 2019, with earnings expected to grow a whopping 27% from 2019 to 2021. DISH Network is nearly 20% off its peak from a year ago, with earnings estimated to grow 9% since 2019. Kimberly-Clarke and Gilead Sciences are also on Goldman's earnings laggards list. Kimberly-Clarke is 8% off the market peak in 2020, with earnings expected to grow 6%. Gilead Sciences is expected to grow earnings about 1% from 2019 to 2021, but the stock is still down 7% from its price during the market peak last February. — with reporting from CNBC's Michael Bloom.

A contractor uses a hammer while working on townhouse under construction at the PulteGroup Metro housing development in Milpitas, California.

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(This story is for CNBC Pro subscribers only.)

As earnings season kicks off, Goldman Sachs is telling clients to buy a handful of beaten-down stocks with earnings that are set to top their pre-pandemic levels this year.