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Top 5 Consumer Discretionary Stocks Set to Beat On Q1 Earnings

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First-quarter 2021 earnings are in full swing and market participants are watching the results closely as the last quarter was a strong one both in terms of economic data and stock market performance. Corporate profits in the first quarter and their guidance will be thoroughly scrutinized by financial experts and economists to gauge whether the U.S. economy will return to the pre-pandemic level by mid-2021.

Meanwhile, five Consumer Discretionary stocks with a favorable Zacks Rank are set to beat on earnings this month. Investment in these stocks should provide good returns going forward.

Consumer Discretionary Sector in Q1

The consumer discretionary sector comprises businesses that sell goods and services, which are considered non-essential by consumers. These are the products that consumers can avoid without any major consequences to their well-being. In fact, these goods are desirable only if the available income of an individual is sufficient to purchase them.

Several positive developments took place last quarter. First, the U.S. government ramped up nationwide COVID-19 vaccination on a priority basis. The speeding up of the process implies faster-than-expected reopening of the U.S. economy. This along with the easing of COVID-19 infections has boosted business activities.

Second, the two major fiscal stimuli, the $900 billion of the second-round of government aid package approved in late December and a fresh round of a massive $1.9 trillion coronavirus relief package approved by the Biden administration in February have significantly strengthened the U.S. economy.

The consumer discretionary sector has benefited due to these positives. Consequently, the Consumer Discretionary Select Sector SPDR (XLY), one of the 11 broad sectors of the market's benchmark the S&P 500 Index, was up 4.7% last quarter.

Our Top Picks

We have narrowed down our search to five consumer discretionary stocks slated to release earnings results this month. Each of these stocks carries a Zacks Rank # 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) 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 first quarter.

 

Whirlpool Corp. (WHR - Free Report) manufactures and markets home appliances and related products. It operates through four segments: North America; Europe, Middle East and Africa; Latin America; and Asia. The company has an Earnings ESP of +1.39%.

Whirlpool has an expected earnings growth rate of 9.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 30 days. It has a trailing four-quarter earnings surprise of 67.8%, on average. The company is set to release earnings results on Apr 21, after the closing bell.

Snap-on Inc. (SNA - Free Report) manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professional users worldwide. It operates through Commercial & Industrial Group, Snap-on Tools Group, Repair Systems & Information Group, and Financial Services segments. The company has an Earnings ESP of +5%.

Snap-on  has an expected earnings growth rate of 8.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 30 days. It has a trailing four-quarter earnings surprise of 18.8%, on average. The company is set to release earnings results on Apr 22, before the opening bell.

World Wrestling Entertainment Inc. (WWE - Free Report) is an integrated media and entertainment company, engaged in the sports entertainment business in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. It operates through three segments: Media, Live Events, and Consumer Products. The company has an Earnings ESP of +11.11%.

World Wrestling Entertainment has an expected earnings growth rate of 1.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.3% over the last 7 days. It has a trailing four-quarter earnings surprise of 81.6%, on average. The company is set to release earnings results on Apr 22, after the closing bell.

Sirius XM Holdings Inc. (SIRI - Free Report) is a radio broadcasting company that creates and broadcasts a variety of content such as commercial-free music, premier sports and live events, news and comedy and exclusive talk and entertainment shows.

The company has an Earnings ESP of +12.9%. Sirius XM has an expected earnings growth rate of 4% for the current year. It has a trailing four-quarter earnings surprise of 20%, on average. The company is set to release earnings results on Apr 28, before the opening bell.

Wyndham Hotels & Resorts Inc. (WH - Free Report) operates as a hotel franchisor primarily in Canada, Mexico, Colombia, Ecuador, Turkey, Germany, the UK, the Caribbean and Margarita Island in Venezuela. It operates through the Hotel Franchising and Hotel Management segments. The company has an Earnings ESP of +2.82%.

Wyndham Hotels & Resorts has an expected earnings growth rate of 96.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 7 days. It has a trailing four-quarter earnings surprise of 120.3%, on average. The company is set to release earnings results on Apr 28, after the closing bell.

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