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The second-quarter 2023 earnings season will kick start this week as major banks are slated to report their quarterly financial numbers. The season is beginning with tepid expectations as the market’s benchmark — the S&P 500 Index — is likely to witness the third consecutive quarter of earnings decline. Estimates for second-quarter earnings have been declining since April.
Despite a tight labor market, stringent monetary control by the Fed in the last one and a half years and rigorous hiking of interest rate have resulted in the decline in several key economic data. However, Wall Street saw an impressive first-half buoyed by the Fed’s decision to reduce the magnitude of interest rate hike.
Several stocks surged in first-half 2023. Many of them are set to beat on earnings results. This may generate further upside for stocks.
Stocks in Focus
We have narrowed our search to five U.S. corporate behemoths that are poised to beat on second-quarter earnings results next week and provided more than 20% returns year to date. Each of these stocks carries a Zacks Rank #3 (Hold) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of five stocks mentioned below in the last quarter.
Image Source: Zacks Investment Research
Netflix Inc. (NFLX - Free Report) is expected to continue dominating the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content. NFLX’s efforts to attract viewers through investing in more regional programming have added significantly to its user base.
Netflix has an Earnings ESP of +2.89%. It has an expected earnings growth rate of 13.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 30 days. NFLX is set to release earnings results on Jul 19, after the closing bell.
Tesla Inc.’s (TSLA - Free Report) record second-quarter 2023 deliveries signal its growing dominance in the electric vehicle market as it continues to expand its production and sales globally. We expect deliveries to see an annualized growth of around 37% in 2023 for TSLA.
Production ramp-up at gigafactory 4 (in Berlin) and 5 (in Austin) and the introduction of new models, including Semi and Cybertruck, are set to support long-term deliveries growth. We anticipate TSLA’s automotive revenues to rise 19% this year.
Tesla has an Earnings ESP of +2.41%. The Zacks Consensus Estimate for current-year earnings has improved 2.9% over the last 30 days. TSLA recorded earnings surprises in three out of the last four reported quarters, with an average beat of 11.7%. The company is set to release earnings results on Jul 19, after the closing bell.
American Airlines Group Inc. (AAL - Free Report) has benefitted from Improved air-travel demand, particularly on the domestic front. Recently, AAL’s management lifted its earnings per share forecast for second-quarter 2023, driven primarily by the anticipation of a further surge in air travel demand in the summer season.
American Airlines has an Earnings ESP of +1.16%. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last seven days.
AAL recorded earnings surprises in three out of the last four reported quarters, with an average beat of 12.9%. The company is set to release earnings results on Jul 20, before the opening bell.
United Airlines Holdings Inc. (UAL - Free Report) is seeing steady recovery in domestic and international air-travel demand. Owing to robust air-travel demand, UAL expects revenues for the June quarter to grow 14-16% year-over-year. Our second-quarter total revenue estimate hints at a 14.7% year over year increase. For second-quarter 2023, UAL expects capacity to improve by almost 18.5% from the year-ago reported figure.
United Airlines has an Earnings ESP of +2.54%. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 10.2% over the last seven days.
UAL recorded earnings surprises in three out of the last four reported quarters, with an average beat of 9.1%. The company is set to release earnings results on Jul 19, after the closing bell.
Capital One Financial Corp. (COF - Free Report) is likely to benefit from decent consumer loan demand and higher interest rates. Our estimates for NII and non-interest income suggest a CAGR of 4.9% and 5.1%, respectively, by 2025. We project net loans to increase 4.6% in 2023.
Solid credit card and online banking operations and strategic acquisitions are likely to keep supporting COF’s financials. Recently, COF acquired Velocity Black, to supplement its offerings of customer experiences.
Capital One has an Earnings ESP of +1.32%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days. COF is set to release earnings results on Jul 20, after the closing bell.
Image: Bigstock
5 U.S. Bigwigs Likely to Win Big in Q2 Earnings
The second-quarter 2023 earnings season will kick start this week as major banks are slated to report their quarterly financial numbers. The season is beginning with tepid expectations as the market’s benchmark — the S&P 500 Index — is likely to witness the third consecutive quarter of earnings decline. Estimates for second-quarter earnings have been declining since April.
Despite a tight labor market, stringent monetary control by the Fed in the last one and a half years and rigorous hiking of interest rate have resulted in the decline in several key economic data. However, Wall Street saw an impressive first-half buoyed by the Fed’s decision to reduce the magnitude of interest rate hike.
Several stocks surged in first-half 2023. Many of them are set to beat on earnings results. This may generate further upside for stocks.
Stocks in Focus
We have narrowed our search to five U.S. corporate behemoths that are poised to beat on second-quarter earnings results next week and provided more than 20% returns year to date. Each of these stocks carries a Zacks Rank #3 (Hold) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of five stocks mentioned below in the last quarter.
Image Source: Zacks Investment Research
Netflix Inc. (NFLX - Free Report) is expected to continue dominating the streaming space, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content. NFLX’s efforts to attract viewers through investing in more regional programming have added significantly to its user base.
Netflix has an Earnings ESP of +2.89%. It has an expected earnings growth rate of 13.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the last 30 days. NFLX is set to release earnings results on Jul 19, after the closing bell.
Tesla Inc.’s (TSLA - Free Report) record second-quarter 2023 deliveries signal its growing dominance in the electric vehicle market as it continues to expand its production and sales globally. We expect deliveries to see an annualized growth of around 37% in 2023 for TSLA.
Production ramp-up at gigafactory 4 (in Berlin) and 5 (in Austin) and the introduction of new models, including Semi and Cybertruck, are set to support long-term deliveries growth. We anticipate TSLA’s automotive revenues to rise 19% this year.
Tesla has an Earnings ESP of +2.41%. The Zacks Consensus Estimate for current-year earnings has improved 2.9% over the last 30 days. TSLA recorded earnings surprises in three out of the last four reported quarters, with an average beat of 11.7%. The company is set to release earnings results on Jul 19, after the closing bell.
American Airlines Group Inc. (AAL - Free Report) has benefitted from Improved air-travel demand, particularly on the domestic front. Recently, AAL’s management lifted its earnings per share forecast for second-quarter 2023, driven primarily by the anticipation of a further surge in air travel demand in the summer season.
American Airlines has an Earnings ESP of +1.16%. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last seven days.
AAL recorded earnings surprises in three out of the last four reported quarters, with an average beat of 12.9%. The company is set to release earnings results on Jul 20, before the opening bell.
United Airlines Holdings Inc. (UAL - Free Report) is seeing steady recovery in domestic and international air-travel demand. Owing to robust air-travel demand, UAL expects revenues for the June quarter to grow 14-16% year-over-year. Our second-quarter total revenue estimate hints at a 14.7% year over year increase. For second-quarter 2023, UAL expects capacity to improve by almost 18.5% from the year-ago reported figure.
United Airlines has an Earnings ESP of +2.54%. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 10.2% over the last seven days.
UAL recorded earnings surprises in three out of the last four reported quarters, with an average beat of 9.1%. The company is set to release earnings results on Jul 19, after the closing bell.
Capital One Financial Corp. (COF - Free Report) is likely to benefit from decent consumer loan demand and higher interest rates. Our estimates for NII and non-interest income suggest a CAGR of 4.9% and 5.1%, respectively, by 2025. We project net loans to increase 4.6% in 2023.
Solid credit card and online banking operations and strategic acquisitions are likely to keep supporting COF’s financials. Recently, COF acquired Velocity Black, to supplement its offerings of customer experiences.
Capital One has an Earnings ESP of +1.32%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days. COF is set to release earnings results on Jul 20, after the closing bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.