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Top 5 Stocks Poised to Beat on Q4 Earnings This Week
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The major part of the fourth-quarter 2020 earnings season is already over. In contrast to the initial expectations of the fourth consecutive negative earnings quarter of this year for the broad-market S&P 500 Index, the last quarter of 2020 has turned out as positive so far.
Projections for fourth-quarter earnings for the S&P 500 as a whole have also become positive. The impressive earnings results have become a strong argument for the stock markets ongoing rally.
Meanwhile, in line with the ensuing fourth-quarter trends, five stocks with a favorable Zacks Rank are set to beat on earnings this week. Investment in these stocks should provide good returns to investors going forward.
Q4 Earnings Results Turn Positive
As of Feb 12, 372 S&P 500 companies reported their quarterly results. Total earnings of these companies were up 4.6% from the same period last year on 2.9% higher revenues, with 80.4% beating EPS estimates and 77.7% beating revenue estimates.
Overall, the fourth-quarter earnings for the S&P 500 Index are projected to be up 2.9% year over year on 2.6% higher revenues. This is in contrast to the projection of a 7.8% decline in earnings on 0.3% higher revenues at the beginning of the reporting cycle.
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 improving steadily since July 2020. (Read More: Earnings Estimates Keep Going Up)
Our Top Picks
We have narrowed down our search to five stocks slated to release fourth-quarter earnings 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 performance of our five picks in the last quarter.
Herc Holdings Inc. (HRI - Free Report) operates as an equipment rental supplier primarily in the United States and internationally. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment. The Zacks Rank #2 company has an Earnings ESP of +9.63%.
Herc Holdings has an expected earnings growth rate of 25.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the last 30 days. It has a trailing four-quarter earnings surprise of 102.7%, on average. The company is set to release earnings results on Feb 18, before the opening bell.
TRI Pointe Group Inc. (TPH - Free Report) is engaged in the design, construction and sale of single-family detached and attached homes in the United States. The Zacks Rank #2 company has an Earnings ESP of +2.34%.
TRI Pointe Group has an expected earnings growth rate of 31.2% for the current year. It has a trailing four-quarter earnings surprise of 51.6%, on average. The company is set to release earnings results on Feb 18, before the opening bell.
Reliance Steel & Aluminum Co. (RS - Free Report) is a leading metals service center company engaged in value-added materials management and metals processing services. It distributes over 100,000 metal products to more than 125,000 customers across a vast spectrum of industries. The Zacks Rank #2 company has an Earnings ESP of +27.71%.
Reliance Steel & Aluminum has an expected earnings growth rate of 10.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 30 days. It has a trailing four-quarter earnings surprise of 80.4%, on average. The company is set to release earnings results on Feb 18, before the opening bell.
Telephone and Data Systems Inc. (TDS - Free Report) is a telecommunications company that provides communications services in the United States. It operates through three segments: U.S. Cellular, Wireline, and Cable. The Zacks Rank #2 company has an Earnings ESP of +309.09%.
The Zacks Consensus Estimate of Telephone and Data Systems for current-year earnings has improved 11.5% over the last 30 days. It has a trailing four-quarter earnings surprise of 148.5%, on average. The company is set to release earnings results on Feb 18, after the closing bell.
United States Cellular Corp. (USM - Free Report) provides wireless telecommunications services in the United States. The company offers postpaid and prepaid service plans with voice, messaging, and data usage option services. The Zacks Rank #1 company has an Earnings ESP of +342.11%.
The Zacks Consensus Estimate of United States Cellular for current-year earnings has improved 17.7% over the last 30 days. It has a trailing four-quarter earnings surprise of 231.1%, on average. The company is set to release earnings results on Feb 18, after the closing bell.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Top 5 Stocks Poised to Beat on Q4 Earnings This Week
The major part of the fourth-quarter 2020 earnings season is already over. In contrast to the initial expectations of the fourth consecutive negative earnings quarter of this year for the broad-market S&P 500 Index, the last quarter of 2020 has turned out as positive so far.
Projections for fourth-quarter earnings for the S&P 500 as a whole have also become positive. The impressive earnings results have become a strong argument for the stock markets ongoing rally.
Meanwhile, in line with the ensuing fourth-quarter trends, five stocks with a favorable Zacks Rank are set to beat on earnings this week. Investment in these stocks should provide good returns to investors going forward.
Q4 Earnings Results Turn Positive
As of Feb 12, 372 S&P 500 companies reported their quarterly results. Total earnings of these companies were up 4.6% from the same period last year on 2.9% higher revenues, with 80.4% beating EPS estimates and 77.7% beating revenue estimates.
Overall, the fourth-quarter earnings for the S&P 500 Index are projected to be up 2.9% year over year on 2.6% higher revenues. This is in contrast to the projection of a 7.8% decline in earnings on 0.3% higher revenues at the beginning of the reporting cycle.
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 improving steadily since July 2020. (Read More: Earnings Estimates Keep Going Up)
Our Top Picks
We have narrowed down our search to five stocks slated to release fourth-quarter earnings 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 performance of our five picks in the last quarter.
Herc Holdings Inc. (HRI - Free Report) operates as an equipment rental supplier primarily in the United States and internationally. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment. The Zacks Rank #2 company has an Earnings ESP of +9.63%.
Herc Holdings has an expected earnings growth rate of 25.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the last 30 days. It has a trailing four-quarter earnings surprise of 102.7%, on average. The company is set to release earnings results on Feb 18, before the opening bell.
TRI Pointe Group Inc. (TPH - Free Report) is engaged in the design, construction and sale of single-family detached and attached homes in the United States. The Zacks Rank #2 company has an Earnings ESP of +2.34%.
TRI Pointe Group has an expected earnings growth rate of 31.2% for the current year. It has a trailing four-quarter earnings surprise of 51.6%, on average. The company is set to release earnings results on Feb 18, before the opening bell.
Reliance Steel & Aluminum Co. (RS - Free Report) is a leading metals service center company engaged in value-added materials management and metals processing services. It distributes over 100,000 metal products to more than 125,000 customers across a vast spectrum of industries. The Zacks Rank #2 company has an Earnings ESP of +27.71%.
Reliance Steel & Aluminum has an expected earnings growth rate of 10.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 30 days. It has a trailing four-quarter earnings surprise of 80.4%, on average. The company is set to release earnings results on Feb 18, before the opening bell.
Telephone and Data Systems Inc. (TDS - Free Report) is a telecommunications company that provides communications services in the United States. It operates through three segments: U.S. Cellular, Wireline, and Cable. The Zacks Rank #2 company has an Earnings ESP of +309.09%.
The Zacks Consensus Estimate of Telephone and Data Systems for current-year earnings has improved 11.5% over the last 30 days. It has a trailing four-quarter earnings surprise of 148.5%, on average. The company is set to release earnings results on Feb 18, after the closing bell.
United States Cellular Corp. (USM - Free Report) provides wireless telecommunications services in the United States. The company offers postpaid and prepaid service plans with voice, messaging, and data usage option services. The Zacks Rank #1 company has an Earnings ESP of +342.11%.
The Zacks Consensus Estimate of United States Cellular for current-year earnings has improved 17.7% over the last 30 days. It has a trailing four-quarter earnings surprise of 231.1%, on average. The company is set to release earnings results on Feb 18, after the closing bell.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>