As the earnings season heats up, Bank of America thinks certain stocks could see big one-day swings on the back of their reports, creating opportunities for investors if they know where to look. Bank of America looked at stocks with the highest implied volatility going into their earnings releases. A stock’s implied volatility is calculated using the market price of its options. The metric reflects how much the market anticipates a stock’s price rising or falling. High volatility indicates a higher potential move. So far, more than 90 companies on the S & P 500 have reported their fourth quarter earnings. From these companies, 68% of them have posted stronger-than-expected results, according to FactSet. Tech giant Microsoft is among the latest to join this group, having announced on Tuesday better-than-expected earnings per share, despite posting slowing revenue growth. That beat rate, however, is below the historical average of 79%, according to Nick Raich of The Earnings Scout. Here are some stocks that, according to data from Bank of America, could see some large fluctuations. One stock that made the list is Tractor Supply , with Bank of America noting the options market is signaling at potential move of 4.7% in either direction after earnings. Analysts polled by Refinitiv expect double-digit earnings and revenue growth from the company. Tractor Supply is down more than 5% year to date, but it has jumped more than 9% over the past six months. It’s expected to report Thursday before the bell. Mastercard ‘s shares could also move sharply on the back of earnings, with the options market pricing in a 3.8% swing in either direction. The company’s stock has risen 9.03% year to date. KeyBanc upgraded Mastercard stocks earlier this month from sector weight to overweight, citing the company’s “growth durability.” Mastercard is slated to report earnings Thursday. Valero Energy , the second-largest U.S. refiner by capacity, is also scheduled to announce its earnings Thursday. Bank of America estimates the petroleum refineries’ shares could swing 4.2%. Analysts are mixed on the stock heading into earnings — J.P. Morgan and Morgan Stanley rate the stock a as a buy, while Goldman Sachs has a sell rating, according to TipRanks . Valero Energy’s shares have climbed 12.4% year to date, thanks to strong demand for gasoline and diesel. VLO YTD mountain VLO in 2023 Bank of America also expects Southwest Airlines shares to see big fluctuations, with the options market pricing in a move of 4.4%, in either direction, after the airline posts earnings Thursday. The airline company made headlines in recent weeks thanks to its holiday meltdown , during which it took a hit of up to $825 million. Intel could also see a big movement post-earnings. Bank of America noted the stock’s implied volatility reflects a swing of 7.6% when the company releases its quarterly report Thursday after the bell. — CNBC’s Michael Bloom contributed reporting.
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