Stocks to buy for Q1 earnings season's 'unprecedented moves': Goldman - Business Insider

Options traders are pricing in a record 13.3% post-earnings move for the average S&P 500 stock, according to Goldman Sachs data. The firm identified 18 stocks where their analysts expect outsized moves and hold the most out-of-consensus views on first-quarter profits.Click here for more BI Prime stories.

The coronavirus pandemic has upended analysts' forecasts for what companies will shortly report about their first-quarter results. This climate of uncertainty also gives investors the opportunity to profit from outsized moves in single stocks, according to derivatives strategists at Goldman Sachs. A team led by John Marshall found that options prices are unusually high ahead of earnings reports even when compared to previous recessionary periods. Options imply a record 13.3% move up or down in the average S&P 500 stock. For context, that's higher than the 2008 crisis peak and nearly triple the average move.Derivatives traders are demanding unprecedented premiums because forthcoming earnings reports will not soothe concerns about the broader macro economy, Marshall said in a recent note.His team compiled 18 stocks where Goldman Sachs' analysts expect outsized price moves and are the most bullish on earnings per share relative to the consensus.

The list below includes the percentage gap between Goldman and Wall Street's earnings-per-share estimate for each stock, as well as the implied upside move. It also includes Goldman's indicative strike prices and costs to buy call options that would profit from rallies after earnings.