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2 Top-Ranked "Defensive" Stocks to Buy After Earnings
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There have been quite a few stocks out of the Zacks Industrial Products and Oils & Energy sectors that have outperformed the broader market over the last few years amid inflationary concerns.
Many of these equities can benefit from higher commodity prices in correlation with rising inflation and act as a defensive hedge for investors.
Let’s take a look at two of these top-ranked stocks that are starting to stand out after their strong quarterly reports.
Sporting a Zacks Rank #1 (Strong Buy), Arch Resources stock continues to stand out after blasting its Q4 top and bottom line expectations.
Arch Resources impressively beat bottom-line expectations by 113% with EPS at $23.18, up 75% from $13.19 per share a year ago. On the top line, the coal producer topped estimates by 19% with sales at $859.46 million, up 6% YoY.
Image Source: Zacks Investment Research
As one of the largest coal producers in the world, operating nine mines across the major coal basins in the U.S., Arch Resources’ earnings estimates revisions for fiscal 2023 and fiscal 2024 have continued to rise. To that note, this could continue after Arch Resources more than doubled its Q4 profit expectations. The company attributed improved sales volume, unit costs, and cash margins to its stellar performance.
Fiscal 2023 earnings are expected to decline -28% to $46.10 per share after a very exceptional 2022 that saw EPS at $63.88. However, FY23 earnings estimates have continued to go up, climbing 12% over the last quarter. Furthermore, FY24 earnings estimates have gone up 11% over the last 90 days despite ARCH’s EPS expected to drop another -29% to $32.46 as higher coal prices start to settle.
Image Source: Zacks Investment Research
Plus, Arch Resources’ bottom line would still be well above historical levels. On the top line, sales would also remain above historic levels despite being forecasted to drop -15% in FY23 and fall another -14% in FY22 to $2.69 billion, based on Zacks estimates.
Shares of ARCH spiked 9% following its stellar quarterly results. Arch Resources stock is now up +11% year to date topping the S&P 500’s +6% and the Coal Markets’ -1% performance. Even better, over the last two years amid higher inflation, ARCH is up an outstanding +223% to crush the benchmark’s +3% and roughly match its Zacks Subindustry’s +226%.
Also standing out following its Q4 report is Reliance Steel & Aluminum with its stock sporting a Zacks Rank #1 (Strong Buy) as well. The metals service center operator continued to profit from higher commodity prices beating bottom-line expectations by 31% with Q4 EPS of $5.87, despite this being down -14% YoY following an exceptional prior-year quarter.
Image Source: Zacks Investment Research
Fourth quarter sales slightly missed expectations by -1% at $3.61 billion, down -9% YoY. Still, fiscal 2022 was a record year in annual net sales at $17.03 billion. Reliance also saw a record year for annual EPS at $30.03 along with record quarterly and annual cash flow following the fourth quarter at $808.7 million and $2.12 billion, respectively.
According to Zacks estimates, Reliance’s fiscal 2023 earnings are projected to decline -39% at $18.26 per share following its record year. With that being said, earnings estimates have gone up 11% throughout the quarter. Sales are forecasted to drop -17% in FY23 to $14 billion but Reliance’s’ top and bottom lines remain well above historical levels.
Image Source: Zacks Investment Research
More impressive, Reliance stock is now up 22% YTD to top the Metal Producer Markets +15% and outperform the rallies among the broader indexes. Furthermore, shares of RS are now up +95% over the last two years to also top its Zacks Subindustry’s +68% and the benchmark.
Image Source: Zacks Investment Research
Bottom Line
Both Arch Resources (ARCH - Free Report) and Reliance Steel & Aluminum (RS - Free Report) have been leaders in their respective industries and their stocks continue to look attractive following their Q4 results. These are two names investors will want to keep an eye on in 2023 as their strong performances looked poised to continue with earnings estimates revisions trending higher.
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2 Top-Ranked "Defensive" Stocks to Buy After Earnings
There have been quite a few stocks out of the Zacks Industrial Products and Oils & Energy sectors that have outperformed the broader market over the last few years amid inflationary concerns.
Many of these equities can benefit from higher commodity prices in correlation with rising inflation and act as a defensive hedge for investors.
Let’s take a look at two of these top-ranked stocks that are starting to stand out after their strong quarterly reports.
Arch Resources (ARCH - Free Report) )
Sporting a Zacks Rank #1 (Strong Buy), Arch Resources stock continues to stand out after blasting its Q4 top and bottom line expectations.
Arch Resources impressively beat bottom-line expectations by 113% with EPS at $23.18, up 75% from $13.19 per share a year ago. On the top line, the coal producer topped estimates by 19% with sales at $859.46 million, up 6% YoY.
Image Source: Zacks Investment Research
As one of the largest coal producers in the world, operating nine mines across the major coal basins in the U.S., Arch Resources’ earnings estimates revisions for fiscal 2023 and fiscal 2024 have continued to rise. To that note, this could continue after Arch Resources more than doubled its Q4 profit expectations. The company attributed improved sales volume, unit costs, and cash margins to its stellar performance.
Fiscal 2023 earnings are expected to decline -28% to $46.10 per share after a very exceptional 2022 that saw EPS at $63.88. However, FY23 earnings estimates have continued to go up, climbing 12% over the last quarter. Furthermore, FY24 earnings estimates have gone up 11% over the last 90 days despite ARCH’s EPS expected to drop another -29% to $32.46 as higher coal prices start to settle.
Image Source: Zacks Investment Research
Plus, Arch Resources’ bottom line would still be well above historical levels. On the top line, sales would also remain above historic levels despite being forecasted to drop -15% in FY23 and fall another -14% in FY22 to $2.69 billion, based on Zacks estimates.
Shares of ARCH spiked 9% following its stellar quarterly results. Arch Resources stock is now up +11% year to date topping the S&P 500’s +6% and the Coal Markets’ -1% performance. Even better, over the last two years amid higher inflation, ARCH is up an outstanding +223% to crush the benchmark’s +3% and roughly match its Zacks Subindustry’s +226%.
Image Source: Zacks Investment Research
Reliance Steel & Aluminum Co. (RS - Free Report) )
Also standing out following its Q4 report is Reliance Steel & Aluminum with its stock sporting a Zacks Rank #1 (Strong Buy) as well. The metals service center operator continued to profit from higher commodity prices beating bottom-line expectations by 31% with Q4 EPS of $5.87, despite this being down -14% YoY following an exceptional prior-year quarter.
Image Source: Zacks Investment Research
Fourth quarter sales slightly missed expectations by -1% at $3.61 billion, down -9% YoY. Still, fiscal 2022 was a record year in annual net sales at $17.03 billion. Reliance also saw a record year for annual EPS at $30.03 along with record quarterly and annual cash flow following the fourth quarter at $808.7 million and $2.12 billion, respectively.
According to Zacks estimates, Reliance’s fiscal 2023 earnings are projected to decline -39% at $18.26 per share following its record year. With that being said, earnings estimates have gone up 11% throughout the quarter. Sales are forecasted to drop -17% in FY23 to $14 billion but Reliance’s’ top and bottom lines remain well above historical levels.
Image Source: Zacks Investment Research
More impressive, Reliance stock is now up 22% YTD to top the Metal Producer Markets +15% and outperform the rallies among the broader indexes. Furthermore, shares of RS are now up +95% over the last two years to also top its Zacks Subindustry’s +68% and the benchmark.
Image Source: Zacks Investment Research
Bottom Line
Both Arch Resources (ARCH - Free Report) and Reliance Steel & Aluminum (RS - Free Report) have been leaders in their respective industries and their stocks continue to look attractive following their Q4 results. These are two names investors will want to keep an eye on in 2023 as their strong performances looked poised to continue with earnings estimates revisions trending higher.