The Q3 earnings season is in full swing with 116 S&P 500 members, which account for almost 30% of the index’s total market capitalization, having reported their quarterly numbers so far. According to our latest Earnings Preview report, the market conditions raise optimism with the revenues and earnings expanding 1.8% and 3.3%, respectively, on a year-over-year basis. While 80.2% companies have outpaced the Zacks Consensus Estimate with respect to earnings, 62.9% have beaten expectations on the revenue front.
The report predicts that the bottom line (in the S&P 500 Index) will inch up 0.1% at the end of the Q3 earnings season. In the event of the prediction coming true, this would be the first quarter to show earnings growth after five consecutive quarters of bottom-line deterioration.
The current week will be a busy one with financial reports flowing in from all possible corners as 810 companies, including 171 S&P 500 members, are scheduled to release their quarterly results. Hence, we expect to get a clearer earnings picture for Q3 by the end of this week.
Despite the optimism, the transportation space (one of the 16 Zacks sectors) is expected to end Q3 on a disappointing note, thanks to the multiple headwinds confronting the sector. Earnings from the sector are projected to decline 14.3% as against the bottom-line decline of 12.4% in Q2.
Investors interested in the transportation sector eagerly await the Q3 earnings releases by major sector participants on Oct 25. Let’s take a look at some of these companies might fare.
Canadian National Railway (CNI - Free Report) is a Montreal-based railroad operator. It posted a positive earnings surprise of 3.61% in the last quarter. Moreover, the company’s bottom line surpassed the Zacks Consensus Estimate in each of the past four quarters, with an average beat of 6.50%.
According to our quantitative model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) – to increase the odds of an earnings beat. The company has an Earnings ESP of -2.17% a Zacks Rank # 3. The combination makes an earnings beat unlikely for Q3 (Read more: Canadian National Q3 Earnings: What's in the Cards?).
Based in Minnesota, C.H. Robinson Worldwide Inc. (CHRW - Free Report) is a third-party logistics company. It provides freight transportation services and logistic solutions to companies across a range of industries. The company has an Earnings ESP of -2.06% and a Zacks Rank #3. The combination makes an earnings beat unlikely for Q3 (Read more: Can C.H. Robinson Pull a Surprise in Q3 Earnings?).
Ryder System, Inc.(R - Free Report) , a Florida-based corporation founded in 1933, is recognized as one of the world's largest providers of integrated logistics and transportation solutions. The Earnings ESP for Ryder System is +0.61% as the Most Accurate estimate is higher than the Zacks Consensus Estimate of $1.65 per share by a penny. However, it has Zacks Rank # 4 (Sell). In fact, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions (Read more: Ryder System Q3 Earnings: Disappointment in Store?).
Westinghouse Air Brake Technologies Corporation (WAB - Free Report) , based in Wilmerding, PA, is a supplier of value-added, technology-based products and services for rail, transit and other global industries. The transportation company, which operates as Wabtec Corporation, carries a Zacks Rank # 3. However, its Earnings ESP of 0.00% (both the Most Accurate estimate and the Zacks Consensus Estimate stand at 99 cents per share) complicates our surprise prediction.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
The Q3 earnings season is in full swing with 116 S&P 500 members, which account for almost 30% of the index’s total market capitalization, having reported their quarterly numbers so far. According to our latest Earnings Preview report, the market conditions raise optimism with the revenues and earnings expanding 1.8% and 3.3%, respectively, on a year-over-year basis. While 80.2% companies have outpaced the Zacks Consensus Estimate with respect to earnings, 62.9% have beaten expectations on the revenue front.
The report predicts that the bottom line (in the S&P 500 Index) will inch up 0.1% at the end of the Q3 earnings season. In the event of the prediction coming true, this would be the first quarter to show earnings growth after five consecutive quarters of bottom-line deterioration.
The current week will be a busy one with financial reports flowing in from all possible corners as 810 companies, including 171 S&P 500 members, are scheduled to release their quarterly results. Hence, we expect to get a clearer earnings picture for Q3 by the end of this week.
Despite the optimism, the transportation space (one of the 16 Zacks sectors) is expected to end Q3 on a disappointing note, thanks to the multiple headwinds confronting the sector. Earnings from the sector are projected to decline 14.3% as against the bottom-line decline of 12.4% in Q2.
Investors interested in the transportation sector eagerly await the Q3 earnings releases by major sector participants on Oct 25. Let’s take a look at some of these companies might fare.
Canadian National Railway (CNI - Free Report) is a Montreal-based railroad operator. It posted a positive earnings surprise of 3.61% in the last quarter. Moreover, the company’s bottom line surpassed the Zacks Consensus Estimate in each of the past four quarters, with an average beat of 6.50%.
According to our quantitative model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) – to increase the odds of an earnings beat. The company has an Earnings ESP of -2.17% a Zacks Rank # 3. The combination makes an earnings beat unlikely for Q3 (Read more: Canadian National Q3 Earnings: What's in the Cards?).
Based in Minnesota, C.H. Robinson Worldwide Inc. (CHRW - Free Report) is a third-party logistics company. It provides freight transportation services and logistic solutions to companies across a range of industries. The company has an Earnings ESP of -2.06% and a Zacks Rank #3. The combination makes an earnings beat unlikely for Q3 (Read more: Can C.H. Robinson Pull a Surprise in Q3 Earnings?).
Ryder System, Inc.(R - Free Report) , a Florida-based corporation founded in 1933, is recognized as one of the world's largest providers of integrated logistics and transportation solutions. The Earnings ESP for Ryder System is +0.61% as the Most Accurate estimate is higher than the Zacks Consensus Estimate of $1.65 per share by a penny. However, it has Zacks Rank # 4 (Sell). In fact, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions (Read more: Ryder System Q3 Earnings: Disappointment in Store?).
Westinghouse Air Brake Technologies Corporation (WAB - Free Report) , based in Wilmerding, PA, is a supplier of value-added, technology-based products and services for rail, transit and other global industries. The transportation company, which operates as Wabtec Corporation, carries a Zacks Rank # 3. However, its Earnings ESP of 0.00% (both the Most Accurate estimate and the Zacks Consensus Estimate stand at 99 cents per share) complicates our surprise prediction.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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