We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks Earnings Trends Highlights: NKE, ORCL, ADBE, LEN and FDX
Read MoreHide Full Article
For Immediate Release
Chicago, IL – September 24, 2020 – Zacks Director of Research Sheraz Mian says, "Recent earnings releases suggest that the positive momentum we started seeing in the overall earnings picture in early July is still in place and reflects favorable trends in the U.S. economy."
Q3 Earnings Season Preview
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
Recent earnings releases suggest that the positive momentum we started seeing in the overall earnings picture in early July is still in place and reflects favorable trends in the U.S. economy.
For 2020 Q3, total S&P 500 earnings are expected to decline -23.1% on -2.9% lower revenues. This is an improvement from the -26.5% earnings decline expected at the start of July and follows the -32.1% earnings drop in Q2.
Sectors with the weakest Q3 growth outlook remain the social-distancing exposed spaces like Transportation (-122.8% earnings decline), Energy (-100.8%), and Consumer Discretionary (-86.7%).
Out of the total 16 Zacks sectors, 14 sectors are expected to experience earnings declines in Q3, with Construction and Medical as the only sectors expected to show earnings growth.
Utilities (-3.4%), Technology (-4.0%), and Retail (-6.1%) are the sectors with the lowest expected earnings declines in Q3.
Q3 earnings for the Finance, Industrial Products and Basic Materials sectors are expected to be down -25.8%, -26.0% and -28.5% from the year-earlier period, respectively.
For full-year 2020, total earnings for the S&P 500 index are currently expected to be down -20.8% on -4.6% lower revenues. As with Q3 estimates, full-year estimates have improved since early July.
Growth is expected to resume next year, thanks to easy comparisons, but the dollar level of earnings in 2021 will still be below the 2019 level.
The implied ‘EPS’ for the S&P 500 index, calculated using current 2020 P/E of 26.1X and index close, as of September 22nd, is $126.90, down from $160.14 in 2019. Using the same methodology, the index ‘EPS’ works out to $159.07 for 2021 (P/E of 20.8X). The multiples for 2020 and 2021 have been calculated using the index’s total market cap and aggregate bottom-up earnings for each year.
Please note that while full-year 2021 earnings for the S&P 500 index are currently expected to be up +25.3% from the 2020 level, the absolute dollar amount of 2021 earnings estimates remain below the 2019 level.
For the small-cap S&P 600 index, Q3 earnings are expected to be down -39.1% from the same period last year on -6.5% lower revenues, which would follow a -64.4% decline on -20.0% lower revenues in 2020 Q2.
For full-year 2020, the S&P 600 index is expected to experience a -38.9% decline in earnings on -6.9% lower revenues, with easy comps pushing earnings growth to +42.3% in 2021.
The Q3 earnings season will really get underway after the big banks come out with quarterly results on October 20th. But we will have counted almost two dozen companies to have reported Q3 results by that time, as we and other data vendors consider companies currently reporting their fiscal quarters ending in August as part of the Q3 tally.
Using that definition, we count the eight S&P 500 members that reported quarterly results in recent days, which includes the likes of Nike (NKE - Free Report) , Oracle (ORCL - Free Report) , Adobe (ADBE - Free Report) , Lennar (LEN - Free Report) and FedEx (FDX - Free Report) . And all eight of these reports have been very good, with FedEx’s blowout numbers and favorable commentary not only reconfirming the pandemic-driven momentum in online sales, but also pointing towards favorable trends in the U.S. economy.
It is premature to read too much into such a small number of reports, but these early reports nevertheless raise hopes that the Q3 reporting cycle will show an incrementally improving outlook for operators in a variety of sectors.
We saw some of these improvements in the last reporting cycle (2020 Q2) as well, which helped turn the estimate revisions around.
We are seeing a similar improvement in estimates for Q4 2020 and full-year 2021 as well.
The recent flow of economic readings has been broadly positive, suggesting that the hoped-for recovery is firmly in place. This is showing up in earnings estimates as well, as indicated earlier. The hope is that this improving trend can be sustained even as the underlying health issue remains unresolved.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks Earnings Trends Highlights: NKE, ORCL, ADBE, LEN and FDX
For Immediate Release
Chicago, IL – September 24, 2020 – Zacks Director of Research Sheraz Mian says, "Recent earnings releases suggest that the positive momentum we started seeing in the overall earnings picture in early July is still in place and reflects favorable trends in the U.S. economy."
Q3 Earnings Season Preview
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The Q3 earnings season will really get underway after the big banks come out with quarterly results on October 20th. But we will have counted almost two dozen companies to have reported Q3 results by that time, as we and other data vendors consider companies currently reporting their fiscal quarters ending in August as part of the Q3 tally.
Using that definition, we count the eight S&P 500 members that reported quarterly results in recent days, which includes the likes of Nike (NKE - Free Report) , Oracle (ORCL - Free Report) , Adobe (ADBE - Free Report) , Lennar (LEN - Free Report) and FedEx (FDX - Free Report) . And all eight of these reports have been very good, with FedEx’s blowout numbers and favorable commentary not only reconfirming the pandemic-driven momentum in online sales, but also pointing towards favorable trends in the U.S. economy.
It is premature to read too much into such a small number of reports, but these early reports nevertheless raise hopes that the Q3 reporting cycle will show an incrementally improving outlook for operators in a variety of sectors.
We saw some of these improvements in the last reporting cycle (2020 Q2) as well, which helped turn the estimate revisions around.
We are seeing a similar improvement in estimates for Q4 2020 and full-year 2021 as well.
The recent flow of economic readings has been broadly positive, suggesting that the hoped-for recovery is firmly in place. This is showing up in earnings estimates as well, as indicated earlier. The hope is that this improving trend can be sustained even as the underlying health issue remains unresolved.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.