We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the Q4 Earnings Season Outlook, Zacks Director of Research Sheraz Mian points out a number of compelling insights for the coming earnings season.
Most notably, Q4 earnings estimates have been trending lower since October of 2023, but have stabilized since then. Earnings for the S&P 500 are expected to be down (-0.4%) YoY, while revenues are forecast to grow 2.2% YoY.
Q4 earnings estimates have come down the most for the Transportation, Construction, Basic Materials, conglomerates, Aerospace, Consumer Discretionary, and Tech sectors. While Q4 earnings estimates have increased for 5 of the 16 Zacks sectors since the quarter began, including Utilities, Autos, Industrials, Energy, and Finance.
So which stocks are critical to watch this earning season?
Image Source: Zacks Investment Research
Microsoft
Just last week, Microsoft (MSFT - Free Report) edged out Apple as the world’s most valuable public company, very nearly approaching the $3 trillion mark. While Apple has experienced some selling since mid-December, Microsoft has been drawing in new buyers, and was pushed to new all-time highs last week.
Earnings from Microsoft are especially important because with its diverse technology businesses, I provide an important gauge on broad spending at technology businesses. From its Cloud computing products to Office 365 suite of software, and now burgeoning AI business, these results present deep insight into the economy.
Microsoft reports earnings Tuesday, January 23
The software giant currently has a Zacks Rank #3 (Hold) rating, reflecting mixed earnings estimates trend. Over the last two months, earnings estimates are essentially unchanged. It should also be noted that MSFT has missed analysts’ estimates only once in the last five years, but the Zacks Earnings ESP is predicting a (-1.47%) miss at the next weeks report.
Image Source: Zacks Investment Research
Microsoft is trading at a one year forward earnings multiple of 34.9x, which is well above its 10-year median of 25.5x, and above both the industry and broad market averages. It also pays a 0.8% dividend yield.
After such a strong run last year, and now a premium valuation, I think it is possible MSFT's earnings are a sell the news event.
Image Source: Zacks Investment Research
Visa
Visa(V - Free Report) , while one of the finest companies in the world, offers more insight than just its business fundamentals during earnings season; it also shares the total volume of transactions, which provides granular data on the consumer.
Visa announces earnings Thursday, January 25 after the market closes.
The earnings trend at Visa has been steadily flat to slightly higher over the past few years, at it currently has a Zacks Rank #3 (Hold) rating. The Zacks Earnings ESP projects Visa to beat earnings estimates by 0.32%.
Image Source: Zacks Investment Research
Although earnings revisions are mixed, I think Visa makes for a compelling investment at current levels. In the last year, management bought back $5 billion in shares and raised the dividend payment by 16%.
Additionally, the company is trading at a one year forward earnings multiple of 26.7x, which just below its 10-year median of 27.8x. And although it isn’t dramatically below its long-term median valuations, rarely do companies as secure as Visa go on sale at a deep discount.
Image Source: Zacks Investment Research
Exxon Mobil
Another industry I am keeping a keen eye on this year will be energy, and Exxon Mobil (XOM - Free Report) represents one of the best measures of the oil and gas industry broadly. For many reasons I recommend investors read Exxon Mobil’s earnings closely.
Firstly, the crude oil market offers a good temperature on global economic growth. So, the direction of Exxon Mobil’s profits do as well. Secondly, the oil market is in the early to middle stages of secular under supply, meaning that there will likely be less oil production than the economy needs.
And lastly, with the rising turmoil in the middle east and potential uncertainty that brings with it, oil companies can provide effective hedges, especially when they are at historically discounted valuations like they are today.
Exxon Mobil reports earnings Friday, February 2 before the market opens.
XOM currently has a Zacks Rank #3 (Hold) rating, reflecting mixed earnings revisions and is already pricing in steep YoY declines in earnings because of lower oil prices. Also worth noting is that the Zacks Earning ESP is forecasting an earnings beat of 1.93%.
Image Source: Zacks Investment Research
However, as noted Exxon Mobil is trading at a one year forward earnings multiple of 10.6x, and pays a generous dividend of 3.8%.
Image Source: Zacks Investment Research
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Key Stocks to Watch This Earnings Season
In the Q4 Earnings Season Outlook, Zacks Director of Research Sheraz Mian points out a number of compelling insights for the coming earnings season.
Most notably, Q4 earnings estimates have been trending lower since October of 2023, but have stabilized since then. Earnings for the S&P 500 are expected to be down (-0.4%) YoY, while revenues are forecast to grow 2.2% YoY.
Q4 earnings estimates have come down the most for the Transportation, Construction, Basic Materials, conglomerates, Aerospace, Consumer Discretionary, and Tech sectors. While Q4 earnings estimates have increased for 5 of the 16 Zacks sectors since the quarter began, including Utilities, Autos, Industrials, Energy, and Finance.
So which stocks are critical to watch this earning season?
Image Source: Zacks Investment Research
Microsoft
Just last week, Microsoft (MSFT - Free Report) edged out Apple as the world’s most valuable public company, very nearly approaching the $3 trillion mark. While Apple has experienced some selling since mid-December, Microsoft has been drawing in new buyers, and was pushed to new all-time highs last week.
Earnings from Microsoft are especially important because with its diverse technology businesses, I provide an important gauge on broad spending at technology businesses. From its Cloud computing products to Office 365 suite of software, and now burgeoning AI business, these results present deep insight into the economy.
Microsoft reports earnings Tuesday, January 23
The software giant currently has a Zacks Rank #3 (Hold) rating, reflecting mixed earnings estimates trend. Over the last two months, earnings estimates are essentially unchanged. It should also be noted that MSFT has missed analysts’ estimates only once in the last five years, but the Zacks Earnings ESP is predicting a (-1.47%) miss at the next weeks report.
Image Source: Zacks Investment Research
Microsoft is trading at a one year forward earnings multiple of 34.9x, which is well above its 10-year median of 25.5x, and above both the industry and broad market averages. It also pays a 0.8% dividend yield.
After such a strong run last year, and now a premium valuation, I think it is possible MSFT's earnings are a sell the news event.
Image Source: Zacks Investment Research
Visa
Visa (V - Free Report) , while one of the finest companies in the world, offers more insight than just its business fundamentals during earnings season; it also shares the total volume of transactions, which provides granular data on the consumer.
Visa announces earnings Thursday, January 25 after the market closes.
The earnings trend at Visa has been steadily flat to slightly higher over the past few years, at it currently has a Zacks Rank #3 (Hold) rating. The Zacks Earnings ESP projects Visa to beat earnings estimates by 0.32%.
Image Source: Zacks Investment Research
Although earnings revisions are mixed, I think Visa makes for a compelling investment at current levels. In the last year, management bought back $5 billion in shares and raised the dividend payment by 16%.
Additionally, the company is trading at a one year forward earnings multiple of 26.7x, which just below its 10-year median of 27.8x. And although it isn’t dramatically below its long-term median valuations, rarely do companies as secure as Visa go on sale at a deep discount.
Image Source: Zacks Investment Research
Exxon Mobil
Another industry I am keeping a keen eye on this year will be energy, and Exxon Mobil (XOM - Free Report) represents one of the best measures of the oil and gas industry broadly. For many reasons I recommend investors read Exxon Mobil’s earnings closely.
Firstly, the crude oil market offers a good temperature on global economic growth. So, the direction of Exxon Mobil’s profits do as well. Secondly, the oil market is in the early to middle stages of secular under supply, meaning that there will likely be less oil production than the economy needs.
And lastly, with the rising turmoil in the middle east and potential uncertainty that brings with it, oil companies can provide effective hedges, especially when they are at historically discounted valuations like they are today.
Exxon Mobil reports earnings Friday, February 2 before the market opens.
XOM currently has a Zacks Rank #3 (Hold) rating, reflecting mixed earnings revisions and is already pricing in steep YoY declines in earnings because of lower oil prices. Also worth noting is that the Zacks Earning ESP is forecasting an earnings beat of 1.93%.
Image Source: Zacks Investment Research
However, as noted Exxon Mobil is trading at a one year forward earnings multiple of 10.6x, and pays a generous dividend of 3.8%.
Image Source: Zacks Investment Research