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Best Buy, Dollar General and Ulta Beauty are part of Zacks Earnings Preview
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For Immediate Release
Chicago, IL – August 24, 2020 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Best Buy ((BBY - Free Report) ), Dollar General ((DG - Free Report) ) and Ulta Beauty ((ULTA - Free Report) ).
The improving trend in the overall earnings picture that we have identified since mid-July remains in place, though the pace of favorable estimate revisions has eased a bit in recent days as the Q2 earnings season has moved towards the finish line.
Earnings in the June quarter were down roughly a third from the same period last year as a result of the Covid-19 pandemic. But that’s actually modestly better than what was expected through early July. Importantly, estimates for the current period (2020 Q3) and beyond have been steadily going up, though they still represent big declines from the year-earlier periods.
All of this is consistent with what we are seeing in macroeconomic data that shows the U.S. economy steadily coming out of the pandemic-driven downturn. We saw this in Friday’s August PMI surveys that not only show that the recovery is gaining momentum despite the summer surge in infections, but also that the U.S. recovery appears to be outpacing Europe and other regions of the world.
It is this fundamental momentum that is driving the major stock indexes into record territory. That said, the recovery needs continued fiscal support, which has started waning in recent weeks. The hope is that Congress passes the next round of relief measures after it comes back from the summer recess. Any slip up on that front likely remains a risk factor for the economy and the market.
Beyond the macro issues, we discuss the overall earnings story that emerged out of the Q2 earnings season, now winding down, through the following charts.
Please note that through Friday, August 21st, we have seen Q2 results from 476 S&P 500 members or 95.2% of the index’s total membership. We have another 15 index members on deck to report results this week, including Best Buy, Dollar General, Ulta Beauty and others.
Analysts were totally in the dark as they set their Q2 EPS and revenue estimates. As we all know, most companies withdrew previously issued guidance given how difficult it was project business trends during the period because of the pandemic.
Total earnings (or aggregate net income) for the 476 S&P 500 members are down -33.4% on -9.7% lower revenues. To round out this scorecard, 80% of these 476 index members have beaten consensus EPS estimates and the corresponding revenue beats percentage is 63.4%, with a blended beats percentage of 56.5%.
Q3 earnings for the S&P 500 index are currently expected to decline -23.9% from the same period last year. But the growth picture has been steadily improving since the start of July. We see a similar trend in place for 2020 Q4 and full-year 2020 estimates as well.
This is a notable improvement in the overall earnings picture since the start of the pandemic and is in-line with high-frequency macroeconomic data that is showing a similar improvement in the economy’s growth drivers.
The question at this stage is the extent of damage to this improving trend as a result of Congress’ inability to extend the pandemic-related relief measures that played a critical role in stabilizing the economic picture.
2020 earnings and revenues are expected to be down -21.3% and -5%, respectively. As to be expected, 2020 estimates came down as the pandemic unfolded, with the current -21.1% decline down from +7.9% growth at the start of the year. But as mentioned earlier in the context of 2020 Q3 estimates, the revisions trend lately has been positive.
For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report >>>> Earnings Season Winding Down
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Best Buy, Dollar General and Ulta Beauty are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – August 24, 2020 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Best Buy ((BBY - Free Report) ), Dollar General ((DG - Free Report) ) and Ulta Beauty ((ULTA - Free Report) ).
Improving Economic Momentum Driving Earnings Gains
The improving trend in the overall earnings picture that we have identified since mid-July remains in place, though the pace of favorable estimate revisions has eased a bit in recent days as the Q2 earnings season has moved towards the finish line.
Earnings in the June quarter were down roughly a third from the same period last year as a result of the Covid-19 pandemic. But that’s actually modestly better than what was expected through early July. Importantly, estimates for the current period (2020 Q3) and beyond have been steadily going up, though they still represent big declines from the year-earlier periods.
All of this is consistent with what we are seeing in macroeconomic data that shows the U.S. economy steadily coming out of the pandemic-driven downturn. We saw this in Friday’s August PMI surveys that not only show that the recovery is gaining momentum despite the summer surge in infections, but also that the U.S. recovery appears to be outpacing Europe and other regions of the world.
It is this fundamental momentum that is driving the major stock indexes into record territory. That said, the recovery needs continued fiscal support, which has started waning in recent weeks. The hope is that Congress passes the next round of relief measures after it comes back from the summer recess. Any slip up on that front likely remains a risk factor for the economy and the market.
Beyond the macro issues, we discuss the overall earnings story that emerged out of the Q2 earnings season, now winding down, through the following charts.
Please note that through Friday, August 21st, we have seen Q2 results from 476 S&P 500 members or 95.2% of the index’s total membership. We have another 15 index members on deck to report results this week, including Best Buy, Dollar General, Ulta Beauty and others.
Analysts were totally in the dark as they set their Q2 EPS and revenue estimates. As we all know, most companies withdrew previously issued guidance given how difficult it was project business trends during the period because of the pandemic.
Total earnings (or aggregate net income) for the 476 S&P 500 members are down -33.4% on -9.7% lower revenues. To round out this scorecard, 80% of these 476 index members have beaten consensus EPS estimates and the corresponding revenue beats percentage is 63.4%, with a blended beats percentage of 56.5%.
Q3 earnings for the S&P 500 index are currently expected to decline -23.9% from the same period last year. But the growth picture has been steadily improving since the start of July. We see a similar trend in place for 2020 Q4 and full-year 2020 estimates as well.
This is a notable improvement in the overall earnings picture since the start of the pandemic and is in-line with high-frequency macroeconomic data that is showing a similar improvement in the economy’s growth drivers.
The question at this stage is the extent of damage to this improving trend as a result of Congress’ inability to extend the pandemic-related relief measures that played a critical role in stabilizing the economic picture.
2020 earnings and revenues are expected to be down -21.3% and -5%, respectively. As to be expected, 2020 estimates came down as the pandemic unfolded, with the current -21.1% decline down from +7.9% growth at the start of the year. But as mentioned earlier in the context of 2020 Q3 estimates, the revisions trend lately has been positive.
For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report >>>> Earnings Season Winding Down
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.