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Top 6 Mid-Cap Stocks Set to Beat Earnings Estimate This Week

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The fourth-quarter  earnings season of the coronavirus-stricken 2020 will gather pace this week. Although overall earnings estimation for this quarter is negative at the beginning of the reporting cycle, market participants will be more interested in knowing the actual figures and outlook given by the U.S. corporates.

Meanwhile, six mid-cap stocks with a favorable Zacks Rank are poised to beat on fourth-quarter earnings this week. Investment in these stocks should be fruitful going forward.

Fourth-Quarter Earnings Likely to Remain Negative

As of Jan 15, 26 S&P 500 companies reported their quarterly results. Total earnings of these companies were up 7.6% from the same period last year on 1.9% lower revenues, with 96.2% beating EPS estimates and 73.1% beating revenue estimates. Overall, the fourth-quarter earnings for the S&P 500 Index are projected to be down 7.8% year over year on 0.3% higher revenues.

Notably, first-quarter earnings were down 12.8% year over year on 1.6% higher revenues. Second-quarter earnings plunged 32.2% on 9.3% lower revenues. Third-quarter earnings dropped 7% year over year on 0.7% lower revenues. The fourth-quarter earnings estimates were steadily improving since July 2020. (Read More: Positive Start to Q4 Earnings Season)

Our Top Picks

We have narrowed down our search to five mid-cap stocks slated to release fourth-quarter results this week. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.

Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after the earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The chart below shows the price performnce of our six picks in the last quarter.

 

United Community Banks Inc. (UCBI - Free Report) operates as the bank holding company for United Community Bank that provides various banking products and services. The company has a Zacks Rank of #2 and an Earnings ESP of +12.38%.

United Community Banks has an expected earnings growth rate of 9.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 30 days. It has a trailing four-quarter earnings surprise of 11.7%, on average. The company is set to release earnings results on Jan 19, after the closing bell.

Fulton Financial Corp. (FULT - Free Report) operates as a multi-bank financial holding company that provides banking and financial services to businesses and consumers. The company has a Zacks Rank of #1 and an Earnings ESP of +8.97%.

The Zacks Consensus Estimate of Fulton Financial for current-year earnings has improved 12.6% over the last 30 days. It has a trailing four-quarter earnings surprise of 215.5%, on average. The company is set to release earnings results on Jan 19, after the closing bell.

Alcoa Corp. (AA - Free Report) produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Brazil, Canada, and internationally. It operates through three segments: Bauxite, Alumina, and Aluminum. The company has a Zacks Rank of #2 and an Earnings ESP of +16.94%.

Alcoa has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 45.5% over the last 7 days. It has a trailing four-quarter earnings surprise of 17.2%, on average. The company is set to release earnings results on Jan 20, after the closing bell.

Umpqua Holdings Corp. (UMPQ - Free Report) operates as the holding company of Umpqua Bank that provides commercial and retail banking, and retail brokerage services. It operates through four segments: Wholesale Bank, Wealth Management, Retail Bank, and Home Lending. The company has a Zacks Rank of #2 and an Earnings ESP of +0.40%.

Umpqua Holdings has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the last 7 days. The company is set to release earnings results on Jan 20, after the closing bell.

Webster Financial Corp. (WBS - Free Report) operates as the holding company for Webster Bank, National Association that provides a range of banking, investment, and financial services to individuals, families, and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank, and Community Banking. The company has a Zacks Rank of #2 and an Earnings ESP of +9.91%.

Webster Financial has an expected earnings growth rate of 36.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.5% over the last 30 days. It has a trailing four-quarter earnings surprise of 7.2%, on average. The company is set to release earnings results on Jan 21, before the opening bell.

Bank OZK. (OZK - Free Report) offers a wide range of retail and commercial banking services to businesses, individuals, and non-profit and governmental entities. The company has a Zacks Rank of #2 and an Earnings ESP of +3.49%.

Bank OZK has an expected earnings growth rate of 40.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days. The company is set to release earnings results on Jan 21, after the closing bell.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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