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Out of the basic materials sector, Ecolab’s better-than-expected Q4 results and guidance stood out on Tuesday. Ecolab beat bottom-line expectations by 1.6% with EPS at $1.27, down -1% year over year. On the top line, the special chemicals company slightly topped estimates with sales at $3.67 billion and up 9% YoY.
Image Source: Zacks Investment Research
As a leading provider of water, hygiene, and energy technologies and services that protect people and vital resources Ecolab’s stock currently sports a Zacks Rank #2 (Buy). Fiscal 2023 earnings estimates had slightly gone up before Ecolab’s Q4 report and this could certainly continue after a strong quarter.
To that note, Ecolab’s guidance helped ignite the rally in ECL shares after reaffirming its growth outlook. Management expects sales growth to remain strong due to the company’s effective higher pricing action despite lower sales volume. Ecolab also anticipates double-digit growth in adjusted operating income in 2023.
Image Source: Zacks Investment Research
Fiscal 2023 earnings are expected to climb 13% to $5.07 per share compared to EPS of $4.49 in 2022 with sales projected to rise 5% at $14.85 billion, based on Zacks estimates. Even better, FY24 EPS is forecasted to jump another 10% with sales projected to rise another 3%.
Shares of ECL spiked 7% following its stellar results. Ecolab stock is now up +12% year to date topping the S&P 500’s +8% and the Chemical-Specialty Markets +5%.
Another company that benefited from its pricing action and displayed its strong pricing power during Q4 was Marriott. The iconic hotel operator was supported by its loyal customer base beating bottom-line expectations by 6.5% with Q4 EPS of $1.96, up 51% year over year.
Image Source: Zacks Investment Research
Sales for the fourth quarter also topped expectations by 5.5% at $5.92 billion, up 33% YoY. Management stated higher travel demand continues to give the company a boost despite many travelers and guests still being cautious of hotel interactions following the pandemic.
For now, Marriott stock lands a Zacks Rank #3 (Hold) as earnings estimate revisions are slightly down over the last quarter despite solid top and bottom line growth expected in fiscal 2023 and FY24. However, after a very strong fourth quarter, earnings estimates could start to go up again.
Image Source: Zacks Investment Research
According to Zacks estimates, Marriott’s fiscal 2023 earnings are projected to jump 11% at $7.45 per share compared to EPS of $6.99 in 2022. Sales are forecasted to be up 6% in FY23 to $22.02 billion. Furthermore, fiscal 2024 earnings are expected to rise another 10% with sales anticipated to be up another 4%.
Shares of MAR spiked 4% following its Q4 report. More impressive, Marriott stock is now up +21% YTD to match the performance of the Hotels & Motels Market and outperform the rallies among the broader indexes.
Bottom Line
Both Ecolab (ECL - Free Report) and Marriott (MAR - Free Report) stocks look more attractive following better-than-expected Q4 results and strong guidance. These are two names investors will want to keep an eye on in 2023 as they may be poised to continue outperforming the broader market.
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2 Stocks to Consider Buying After Strong Q4 Results
A few stocks among a variety of sectors had standout quarterly reports this week making them more intriguing as we progress through 2023.
Here are two of these stocks investors may want to consider buying after their strong fourth-quarter reports.
Ecolab (ECL - Free Report) )
Out of the basic materials sector, Ecolab’s better-than-expected Q4 results and guidance stood out on Tuesday. Ecolab beat bottom-line expectations by 1.6% with EPS at $1.27, down -1% year over year. On the top line, the special chemicals company slightly topped estimates with sales at $3.67 billion and up 9% YoY.
Image Source: Zacks Investment Research
As a leading provider of water, hygiene, and energy technologies and services that protect people and vital resources Ecolab’s stock currently sports a Zacks Rank #2 (Buy). Fiscal 2023 earnings estimates had slightly gone up before Ecolab’s Q4 report and this could certainly continue after a strong quarter.
To that note, Ecolab’s guidance helped ignite the rally in ECL shares after reaffirming its growth outlook. Management expects sales growth to remain strong due to the company’s effective higher pricing action despite lower sales volume. Ecolab also anticipates double-digit growth in adjusted operating income in 2023.
Image Source: Zacks Investment Research
Fiscal 2023 earnings are expected to climb 13% to $5.07 per share compared to EPS of $4.49 in 2022 with sales projected to rise 5% at $14.85 billion, based on Zacks estimates. Even better, FY24 EPS is forecasted to jump another 10% with sales projected to rise another 3%.
Shares of ECL spiked 7% following its stellar results. Ecolab stock is now up +12% year to date topping the S&P 500’s +8% and the Chemical-Specialty Markets +5%.
Marriott International (MAR - Free Report) )
Another company that benefited from its pricing action and displayed its strong pricing power during Q4 was Marriott. The iconic hotel operator was supported by its loyal customer base beating bottom-line expectations by 6.5% with Q4 EPS of $1.96, up 51% year over year.
Image Source: Zacks Investment Research
Sales for the fourth quarter also topped expectations by 5.5% at $5.92 billion, up 33% YoY. Management stated higher travel demand continues to give the company a boost despite many travelers and guests still being cautious of hotel interactions following the pandemic.
For now, Marriott stock lands a Zacks Rank #3 (Hold) as earnings estimate revisions are slightly down over the last quarter despite solid top and bottom line growth expected in fiscal 2023 and FY24. However, after a very strong fourth quarter, earnings estimates could start to go up again.
Image Source: Zacks Investment Research
According to Zacks estimates, Marriott’s fiscal 2023 earnings are projected to jump 11% at $7.45 per share compared to EPS of $6.99 in 2022. Sales are forecasted to be up 6% in FY23 to $22.02 billion. Furthermore, fiscal 2024 earnings are expected to rise another 10% with sales anticipated to be up another 4%.
Shares of MAR spiked 4% following its Q4 report. More impressive, Marriott stock is now up +21% YTD to match the performance of the Hotels & Motels Market and outperform the rallies among the broader indexes.
Bottom Line
Both Ecolab (ECL - Free Report) and Marriott (MAR - Free Report) stocks look more attractive following better-than-expected Q4 results and strong guidance. These are two names investors will want to keep an eye on in 2023 as they may be poised to continue outperforming the broader market.