These 7 Stocks Are Analyst Favorites For Magnificent Earnings Growth; GE Aerospace Rebounds

After the stock market started 2026 with tempered gains, it’s important to watch the stocks that are most loved by equity analysts.

Lam Research (LRCX,) GE Aerospace (GE) and Arista Networks (ANET) are three of the seven best stocks where investors can find magnificent profit growth prospects. Also, Sterling Infrastructure (STRL) boasts strong profit growth as it closes in on a buy point.

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GE Aerospace Near New Highs

GE Aerospace is forming a flat base and is trading close to the 332.79 buy point, according to IBD MarketSurge. The relative strength line is making new highs, which is a bullish sign for a potential breakout.

The stock has bounced back from a 7% tumble on Jan. 22, when the company’s fourth-quarter results beat analysts’ expectations but investors seemed concerned about slowing growth.

Revenue growth in the commercial engines and services division and in its defense business slowed from the third quarter. For 2026, GE Aerospace forecast low double-digit adjusted revenue growth from the $42.3 billion in 2025.

Despite that, multiple analysts raised their price targets on GE Aerospace. The stock started to rebound.

The company makes jet engines and aerospace products. The bulk of the company’s revenue comes from its Commercial Engines & Services business, where sales increased 24% year over year in the fourth quarter.

Analysts believe the company has landed on a number of megatrends in commercial aerospace, defense, shipbuilding and space. GE Aerospace could reach a $1 trillion market cap within as early as five years, a Citi analyst said in December.

GE Aerospace has an EPS Rating of 96, following EPS gains of 82%, 38%, 44% and 19% the past four quarters.

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Of 22 analysts who cover the company, 19 have buy or outperform ratings. The consensus 2026 earnings estimate is for a 16.6% year-over-year increase, according to FactSet.

Arista Networks

Arista Networks (ANET) has the highest EPS Rating in the computer networking industry group, a perfect 99. That high score comes after the company posted earnings gains of 30%, 38%, 25% and 24% the past four quarters, including the most recent quarterly report issued last week.

Fourth-quarter earnings topped estimates and the company raised 2026 revenue guidance, with artificial intelligence-related sales expected to double. It raised its full-year revenue growth outlook from 20% to 25%.

Arista also raised its 2026 AI networking revenue outlook to $3.25 billion from $2.75 billion.

Arista sells computer network switches that speed up communications in internet data centers. It has a formidable rival in Nvidia (NVDA). Both companies are targeting an emerging market for networking technology that connects clusters of AI servers in cloud-computing data centers.

In January, UBS named Arista a top pick for 2026.

Arista is forming a cup base with an early entry at 151.80. The stock has a 91 Composite Rating. Of 28 analysts covering the company, 93% have buy or outperform ratings.

Sterling Infrastructure Earnings

Sterling stock broke out of a cup base and is back near the 419.14 buy point. The relative strength line is near new highs.

The heavy construction company has the highest EPS Rating (99) in its industry group, following accelerating earnings gains of 12%, 63%, 61% and 76% the past four quarters, according to MarketSurge.

While the company works on highways, bridges and other typical civil projects, its largest and highest-margin business is data centers and other tech-related construction. In the third quarter, revenue from the data center market grew more than 125% year over year. The company says its backlog and other expected work in tech infrastructure totals about $3 billion, much of it in data centers.

Analysts say rising power demand from data centers and manufacturing reshoring, combined with increasing utility capital spending, is driving record backlogs.

Sterling Infrastructure, the IBD Stock of the Day on Wednesday, has guided full-year adjusted EPS of $10.35-$10.52 vs. current analyst views of $10.33, an increase of 69% per FactSet.

The company will announce Q4 results Feb. 25 after the stock market closes. Analysts polled by FactSet expect fourth-quarter earnings of $2.62 a share, up 80%, for yet another quarter of accelerating growth.

Only seven analysts cover Sterling, and all have buy or outperform recommendations.

Lam Research Earnings

Lam Research increased earnings 64%, 44%, 40% the past three quarters. The company beat expectations with its most recent report last month.

That gives the stock a 93 EPS Rating. The Composite Rating is 91, backed not only by its earnings performance but also its share-price gains. The stock rose more than 145% last year and is already up 7% this year, despite AI-related volatility.

The chip-equipment company provides the expertise that enables the manufacturing of semiconductors, which keep growing in complexity and require precise controls at an atomic scale.

The company says demand from cloud computing, artificial intelligence, 5G communications, the Internet of Things and other markets is driving a need for increasingly powerful and cost-efficient semiconductors.

Executives guided much higher than views for the current period. CEO Tim Archer said in the earnings announcement that the acceleration in AI technology is causing Lam to ramp up execution to support customers’ growth.

In December, Oppenheimer analyst Edward Yang called Lam a “best-in-class franchise.” The company is benefiting from chipmakers needing the latest gear to make advanced products for AI computing.

The stock has gone up about 165% from a handle buy point of 86.04 it topped in June. The stock pulled back to its 10-week moving average and found support, enabling a follow-on entry around 150 in December. Shares are now extended, trading at record highs.

Of 35 analysts who cover Lam, 71% have buy or overweight ratings, and the rest have hold recommendations, per FactSet.

Comfort Systems Earnings

Comfort Systems (FIX) will report earnings Friday. For the fourth quarter, analysts’ consensus earnings estimate is $6.75 a share on a non-GAAP basis, up 65%, per FactSet.

The company’s outstanding growth comes as data center construction drives demand for the cooling and heating company. In its previous quarterly report, it cited “unprecedented demand” that made its backlog grow to over $9 billion for the first time, and $3.4 billion higher than when 2025 began.

The company has posted accelerating EPS gains of 49%, 60%, 67%, 75% and 102% the past five quarters, sending its EPS Rating to a pristine 99. That’s the highest in IBD’s air conditioning and heating products industry group. Comfort Systems also has one of the highest Composite Ratings in its industry group, at 98.

Of 10 analysts covering the company, eight have top recommendations and the rest have hold ratings.

The company specializes in heating, ventilation and air conditioning (HVAC) products, as well as electrical services for commercial and industrial buildings. Comfort Systems’ backlog is swelling thanks largely to demand for data centers, which require massive cooling.

Shares are now extended more than 19% above the most recent buy point at 1,020.26. Investors should wait for a new pattern to emerge before considering a purchase of shares.

Celestica Leads Industry Group

Celestica (CLS) is the No. 1 stock in the contract manufacturing industry group with a Composite Rating of 99 and an EPS Rating of 99.

The Toronto-based company reported Jan. 28 fourth-quarter earnings of $1.89 a share, a 70% increase, on sales of $3.654 billion, up 44%. The consensus EPS estimate was $1.68 on sales of $3.506 billion.

Shares sold off the next day as the company’s operating-margin forecast for 2026 was unchanged, despite that it raised its revenue and profit outlook. That alarmed some analysts. The stock is meeting resistance at the 50-day line but continues to form a base with a 363.40 buy point.

There’s heavy demand for Celestica’s rack integration services for data centers and the connectivity gear that handles AI workloads. The company is a key supplier for hyperscalers such as Alphabet (GOOGL) and Meta Platforms (META).

Celestica also has partnerships with Broadcom (AVGO), Advanced Micro Devices (AMD), Intel (INTC) and others for various products.

Twenty of the 23 analysts covering Celestica have buy or overweight ratings and the rest have hold ratings.

Construction Partners Stock

Construction Partners (ROAD) is a leader in the highflying heavy-construction industry. Its shares are near the 138.90 buy point from a cup-without-handle base.

The stock started rallying Feb. 5, when Construction Partners beat December-quarter sales and earnings expectations and raised its outlook for the fiscal year ending in September. As with many other heavy-construction companies, Construction Partners is enjoying high demand for factory, data center and civil construction work. Its backlog has swelled to more than $3 billion.

“Project demand throughout our footprint remains strong,” CEO Fred “Jule” Smith told analysts in the earnings conference call. “On the commercial side of the business, steady project bidding is supported by ongoing population migration to the Sunbelt.”

Reshoring trends, as more manufacturing and supply-chain capacity moves back to the U.S., and the buildout of AI infrastructure are also driving growth.

While data center work occupies much of the company’s business, executives say there’s plenty of activity building factories, distribution centers and other projects.

Construction Partners has a 99 EPS Rating after posting EPS gains of 520%, 38%, 89% and 88% the past four quarters. The stock also has a 99 Composite Rating.

Only six analysts cover the company, and four have buy or outperform ratings. Two have hold recommendations.

Universe of S&P 500, S&P 400 And S&P 600 Stocks

To select companies for this list, IBD used a combination of FactSet data and IBD ratings.

The screening began with the S&P Composite 1500 index, which aggregates the S&P 500, S&P MidCap 400 and S&P SmallCap 600 companies. This index is a good representation of the U.S. stock market while eliminating less-liquid and lower-quality names.

The next layer of screening flagged companies showing FactSet consensus ratings of overweight or buy, the most bullish views. To further refine the list, we screened for stocks with strong analyst consensus earnings growth estimates for the current fiscal year. In the final cut, we selected stocks with high Composite and Relative Strength Ratings.

The final seven best stocks for outstanding earnings growth and estimates overlap with some Magnificent Seven stocks.

To find other ideas for the best stocks to buy or watch, check out IBD Stock Lists and other IBD content.

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