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Zacks Earnings Trends Highlights: Exxon Mobil, Chevron and Ford
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For Immediate Release
Chicago, IL – March 18, 2021 – Zacks Director of Research Sheraz Mian says, “Total 2021 Q1 earnings are currently expected to be up +19.3% from the same period last year on +5.3% higher revenues, with a combination of easy comparisons and strong gains in a number of sectors."
Looking Ahead to Q1 Earnings Season
Note: The following is an excerpt from this week's Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The overall earnings picture continues to improve, a trend that we strongly feel will accelerate as we move towards the Summer months and signs of a sharp economic rebound emerge.
Total 2021 Q1 earnings are currently expected to be up +19.3% from the same period last year on +5.3% higher revenues, with a combination of easy comparisons and strong gains in a number of sectors giving us the growth rebound.
Estimates for the current and coming quarters have steadily gone up, a trend that has been in place since last Summer. We expect this favorable revisions trend to accelerate in the coming months as we start looking past the pandemic.
The positive revisions trend is broad-based, with Q1 estimates for 10 of the 16 Zacks sectors going up over the last three months, with estimates for the Autos and Energy sectors more than doubling over that time period.
Other sectors experiencing positive estimate revisions include Basic Materials, Construction, Industrial Products, Technology and Finance.
On the negative side, estimates have come down the most for the Transportation sector, with the Consumer Discretionary and Aerospace sectors also suffering estimate cuts.
The sectors with positive earnings growth in Q1 include: Finance (+45.9% earnings growth), Technology (+21.8%), Autos (+200.6%), Retail (+40.1%), Medical (+16.2%), Basic Materials (+65.7%), Construction (+37%), and Industrial Products (+22.4%)
The weakest earnings growth in Q1 is expected to come from the Transportation (-161.9% earnings decline), Consumer Discretionary (-36%), and Energy (-7.9%).
For the Finance sector, Q1 earnings are expected to be up +45.9% on +1.1% higher revenues, as the group's year-earlier results were dragged down by big loan-loss reserves at the banks as the pandemic got underway.
For the Technology sector, Q1 earnings are expected to be up +21.8% from the same period last year on +17% higher revenues.
Looking at the calendar-year picture for the S&P 500 index, earnings are projected to climb +24.3% on +8.7% higher revenues in 2021 and increase +14.9% on +6.5% higher revenues in 2022. This would follow a decline of -13.2% in 2020 on -2.2% lower revenues.
The implied 'EPS' for the S&P 500 index, calculated using current 2021 P/E of 23.5X and index close, as of March 16th, is $168.98, up from $135.89 in 2020. Using the same methodology, the index 'EPS' works out to $194.11 for 2022 (P/E of 20.4X). The multiples have been calculated using the index's total market cap and aggregate bottom-up earnings for each year.
Favorable Revision Trend
Regular readers of our earnings commentary know that the revisions trend lately has been positive. In fact, we flagged the shift in the revisions trend effectively in real time in July 2020, as the economy started coming out of the pandemic-driven lockdowns.
This favorable trend continued with respect to estimates for the first quarter of 2021.
Estimates have gone up the most in the Energy and Autos sectors, with Q1 earnings estimates for these two sectors more than doubling over the last three months. You can see this pronounced positive revisions trend in estimates for Exxon (XOM - Free Report) , Chevron (CVX - Free Report) , Ford (F - Free Report) and others from these two sectors.
We expect the favorable revisions trend to gain pace as companies start reporting Q1 results in mid-April and share what they see as trends in underlying conditions.
We remain positive in our earnings outlook, as we see the full-year 2021 growth picture steadily improving through the first half of the year as more of the population gets vaccinated.
The flow of recent economic readings about the retail spending, housing starts, and the factory space suggest that activity levels moderated in February, likely reflecting unusual weather and the lingering effects on the pandemic. But with the extraordinary vaccination effort steadily gaining pace and new stimulus checks heading out, it is reasonable to expect the economic growth trend to turn around meaningfully in the coming days.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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 https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Earnings Trends Highlights: Exxon Mobil, Chevron and Ford
For Immediate Release
Chicago, IL – March 18, 2021 – Zacks Director of Research Sheraz Mian says, “Total 2021 Q1 earnings are currently expected to be up +19.3% from the same period last year on +5.3% higher revenues, with a combination of easy comparisons and strong gains in a number of sectors."
Looking Ahead to Q1 Earnings Season
Note: The following is an excerpt from this week's Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
Favorable Revision Trend
Regular readers of our earnings commentary know that the revisions trend lately has been positive. In fact, we flagged the shift in the revisions trend effectively in real time in July 2020, as the economy started coming out of the pandemic-driven lockdowns.
This favorable trend continued with respect to estimates for the first quarter of 2021.
Estimates have gone up the most in the Energy and Autos sectors, with Q1 earnings estimates for these two sectors more than doubling over the last three months. You can see this pronounced positive revisions trend in estimates for Exxon (XOM - Free Report) , Chevron (CVX - Free Report) , Ford (F - Free Report) and others from these two sectors.
We expect the favorable revisions trend to gain pace as companies start reporting Q1 results in mid-April and share what they see as trends in underlying conditions.
We remain positive in our earnings outlook, as we see the full-year 2021 growth picture steadily improving through the first half of the year as more of the population gets vaccinated.
The flow of recent economic readings about the retail spending, housing starts, and the factory space suggest that activity levels moderated in February, likely reflecting unusual weather and the lingering effects on the pandemic. But with the extraordinary vaccination effort steadily gaining pace and new stimulus checks heading out, it is reasonable to expect the economic growth trend to turn around meaningfully in the coming days.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
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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 https://www.zacks.com/performance for information about the performance numbers displayed in this press release.