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3 Stocks Rising Into Their Reports

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Eat your heart out Christmastime. Here at Zacks, our favorite season is Earnings Season…and we get four of them each year! It’s just about time for the next one, and this more than 8-year long bull market has taught us not to fear companies that are rising into their report.

With that in mind, today we’re focused on the Zacks #1 Rank Uptrends screen. The stocks that pass these parameters are strong buys that are approaching or at their 52-week highs.

Below are three stocks that have passed this screen’s criteria. They are Strong buys that are outpacing the market….and they are all scheduled to report next month. Make sure to click on the screen above to learn about the parameters and see the full list of names.

NVIDIA Corporation (NVDA - Free Report)

Earnings estimates for NVIDIA Corporation (NVDA - Free Report) soared in the double digits following its fiscal third quarter report a couple of months ago, but haven’t moved much since then. Fortunately, we are just a little more than a month away from this chip-making giant’s fiscal fourth quarter numbers. Given this company’s penchant for beating quarterly EPS expectations (topping in 19 out of the last 20) and its ongoing innovations, there’s an excellent chance that NVDA will be outperforming again when it reports on February 8…leading to another round of rising estimates.

NVIDIA has always been a trailblazer, especially in developing high-performance graphics processing units (GPUs) for video games. As if that wasn’t cool enough, the company has also become a leader in other intriguing fields like self-driving cars and artificial intelligence. With such emerging technologies providing a solid foundation, NVDA soared by more than 85% in 2017. And with this hot start to 2018, the company has advanced another 10% in just the past few days.

In its fiscal third quarter, earnings per share of $1.33 crushed the Zacks Consensus Estimate of 94 cents by 41.5%. The company has now registered a positive surprise in 10 straight quarters, averaging 33.5% in the past four. Revenues jumped 31.5% to $2.64 billion thanks to growth across all of its platforms. The Zacks Consensus Estimate was only expected $2.36 billion. For example, its GPU business jumped 31% to $2.22 billion, while emerging fields like AI also gained strength.

Following the report, earnings estimates for this fiscal year (ending this month) jumped 16% to $4.19 per share from $3.61. The Zacks Consensus Estimate for next fiscal year (ending January 2019) increased 18.2% to $4.67 per share, which suggests year-over-year growth of 11.5%. And this is where the expectations remain to this day, having not moved in the past 30 days. But that’s likely to change when NVDA reports again early next month.

 

NVIDIA Corporation Price, Consensus and EPS Surprise

NVIDIA Corporation Price, Consensus and EPS Surprise | NVIDIA Corporation Quote


Deere & Company (DE - Free Report)

Take a look at that chart below. It’s not easy to find such a good-looking chart outside of technology these days. Deere & Company (DE - Free Report) hasn’t missed quarterly earnings expectations in years and its stock has zoomed higher by approximately 54% in the past 12 months. This agriculture and construction equipment company has been impressive for a long time, but it’s not resting on its laurels.

Last month, DE closed its more than $5 billion acquisition of Germany-based Wirtgen, the world’s leading road-construction equipment maker. The company is looking to become as much a household name globally as it already is here in the U.S.A. The move catapults DE into an industry leader in global road construction and is expected to contribute around $3.1 billion in net sales in fiscal 2018.

The next quarterly report drops on February 16 and currently has an Earnings ESP of nearly 16%, which can be attributed to a mixture of the acquisition, strong demand and its fantastic record of outperformance. In its fiscal fourth quarter, earnings per share of $1.57 topped the Zacks Consensus Estimate by 7.5%, completing a four-quarter average surprise of 19.5%. For all of fiscal 2017, earnings per share of $6.68 bettered our estimate of $6.51. Revenues also outpaced Zacks expectations for both the quarter and year.

Looking forward, DE expects net sales to be up about 19% year over year in fiscal 2018 with net income at around $2.6 billion. Total equipment sales are expected to increase 38% in the first quarter and 22% in fiscal 2018. In other words, the company expects demand to continue. Given the strong quarter and guidance, analysts raised estimates in the aftermath.

The Zacks Consensus Estimate for this fiscal year (ending October 2018) has gained 15% in the past two months to $7.95 per share. Most impressively though, earnings are then forecasted to rise another 20% next fiscal year (ending October 2019) to $9.55, which has advanced more than 21% in the past 60 days.

 

Deere & Company Price, Consensus and EPS Surprise

Deere & Company Price, Consensus and EPS Surprise | Deere & Company Quote


DXC Technology (DXC - Free Report)

DXC Technology (DXC - Free Report) ended the first week of 2018 by eclipsing $100 a share on Friday, which means this IT services company has now soared approximately 70% over the past 12 months. Earnings estimates have also been improving for this Zacks Rank #1 (Strong Buy) stock, especially since its fiscal second quarter report from early November. Now we are less than a month away from its next release on February 1.

DXC came together from the merger of Computer Sciences Corp. with the Enterprise Services Division of Hewlett Packard Enterprise. These days, it is the world’s second largest end-to-end IT services company. But it’s really just getting started. The merger opens up tons of possibilities for insurance, healthcare and financial services in spaces like transportation, pharma and technology, among others.

The company is on an epic streak of positive earnings surprises (see graph below). It has amassed an average beat of more than 25% in just the past four quarters. Most recently, it reported earnings per share of $1.93 for its fiscal second quarter, easily eclipsing the Zacks Consensus Estimate of $1.53 by more than 26%. Revenues of $6.163 billion was even more impressive as that skyrocketed by nearly 230% year over year, while still beating our expectations of $5.993 billion.

DXC raised its non-GAAP EPS outlook for fiscal 2018 to between $7.25 and $7.75, compared to the previous guidance of $6.50 to $7. Revenues are still expected at $24 billion to $24.5 billion. The Zacks Consensus Estimate for this fiscal year (ending March 2018) is at $7.51, which marks gains of 10% over the past 3 months and 4% in the past two. More importantly, earnings for next fiscal year (ending March 2019) are expected to soar from the previous year by more than 15% to $8.65 per share. This guidance is up 5.4% in 3 months and 2.6% in two.

 

DXC Technology Company. Price, Consensus and EPS Surprise

DXC Technology Company. Price, Consensus and EPS Surprise | DXC Technology Company. Quote


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NVIDIA Corporation (NVDA) - free report >>

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Deere & Company (DE) - free report >>

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